Businesses: Late Payments

Debate between Kelly Tolhurst and Debbie Abrahams

Wednesday 19th June 2019 Commons Chamber

[Kelly Tolhurst]

The hon. Gentleman raises the issue of retentions. He says that this is not for industry, but for the Government. I have spoken to industry representatives and businesses about this issue, and it is clear that the industry has not come to a single way forward to deal with this. We hope that the measures that I have announced today on supply chain finance will make a big difference. With regard to cash retentions, I have been clear that if industry cannot come to a consensus on a way forward, the Government will step in and take action.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I welcome the Minister’s statement, and I thank her for meeting me after I introduced my Public Sector Supply Chains (Project Bank Accounts) Bill earlier this year. However, the measures she has introduced are actually recommendations from the 2013 inquiry that I led into late payments. Six years on, this is a little late, although I recognise her commitment. These measures will be no comfort to Neil Skinner, who owns a business in my constituency and lost £176,000 when Carillion collapsed. That was not a one-off; we know that there are other Carillions out there. Some 380 small businesses closed directly as a result of Carillion’s collapse. I cannot understand why she is so reticent after decades of this issue and why she will not act on project bank accounts.

[Kelly Tolhurst]

I recognise the hon. Lady’s passion and commitment. As I have said to her in previous meetings, I am happy to continue to work with her on this issue. Project bank accounts have value. I have announced the measures we are taking, following the call for evidence. I understand that she is disappointed in the time it has taken to bring these measures forward, but we are taking action. These bad practices have been happening not only in recent years but for decades, and this Government are finally taking action.

The hon. Lady is right to mention her constituent and the losses that his business suffered through the collapse of Carillion. Carillion’s debt was estimated to be £900 million at the end, which excluded £500 million of supply chain finance. That is why we will work with the Financial Reporting Council to find ways to bring transparency to companies’ accounts and reporting, which we hope will address any larger failures in the future.