Construction Industry: Retention Payments

Lord German Excerpts

Thursday 14th January 2021 Lords Chamber

[Lord Callanan (Con)]

I join with the noble Lord in paying tribute to the work of the late Lord O’Neill: as the president of the Specialist Engineering Contractors’ Group, he was active on this issue for many years and instigated an inquiry on it in 2002. As I have said, given the complexity of the policy issues, there remains no consensus on the way forward, but we will continue to examine the issues, to work with industry and to seek a solution to this problem.

[Lord German (LD)]

The last two paragraphs of the Government’s responses paper lay out only two policy options: the retention deposit scheme or phasing out retentions completely. May I follow the noble Lord, Lord Aberdare, in pressing the Minister? He already has the responses and knows the two options before him. Can he tell us when the legislation will come forward to make this happen? It is much needed and will avoid late payments, non-payments and insolvencies.

[Lord Callanan (Con)]

Those are two of the alternatives that have been suggested as a policy response. Changes in this area would require primary legislation, and there is always pressure on the Government’s legislative timetable. We think that working with the industry to seek a consensus is a good way forward, but there is not yet a consensus: some notable companies are against a deposit retention scheme or the other policy option the noble Lord mentioned.