Question

To ask the Secretary of State for Business, Innovation and Skills, what steps his Department is taking to tackle part payment in the construction industry; and if he will make a statement.

Late payment remains an important issue. The Government is taking significant steps to assist small businesses to recover late payment debts.

The Government promotes fair payment practices in construction through legislation (the “Construction Act”), the use of public procurement (promoting prompt payment to Tier 3 and the use of Project Bank Accounts), and by working with the industry through voluntary measures (such as the Prompt Payment Code and the Construction Leadership Council’s Payment Charter).

The Government has legislated for new transparency measures in the public and private sectors. This will allow full public scrutiny of payment performance.

The Payment Charter includes a commitment of zero retentions by 2025. To support this work, the Government recently announced a review of the practice of cash retentions under construction contracts in England.

Tackling late payment is about creating a responsible payment culture where larger companies recognise the benefit of having a sustainable and robust supply chain, and smaller businesses feel able to challenge poor behaviour.

The Government believes that taken together these measures will lead to significant changes in the UK’s payment culture.