Tuesday, January 28, 2020

Lord’s Bill shines light on poor payment practices in construction

Engineering services trade bodies BESA and ECA have welcomed the new private members’ bill that Lord Mendelsohn introduced recently in the House of Lords, which contains a number of measures aimed at tackling late payment. 

BESA Director of Legal & Commercial Debbie Petford and ECA Director of Business & Legal Rob Driscoll said:

“We welcome the increased attention that Lord Mendelsohn’s Bill will bring to the issue of poor payment practices. The Bill would specifically deliver on two key policies that BESA and ECA have consistently called for in the lead up to the 2019 general election.

“Specifically, this includes greater transparency around payment performance and expanding the abilities of the Small Business Commissioner to include powers to investigate and fine persistent late payers, and confirmation that the construction industry is included within its remit.” 

Both associations reiterated that their number one policy priority remains securing the re-introduction of the Aldous Bill, which lapsed in the previous Parliament despite widespread political and industry support. A previous Construction Minister committed to legislative reform and the Bill advocated safeguarding cash retentions by holding them in third party bank accounts.

Integrating the various key payment initiatives from Government remains a priority. However, in the case of retentions - where there is no current protection - a retentions deposit scheme remains essential. This is the most credible solution to prevent abuse of cash retentions and shield SMEs from the risks of payment abuse and upstream insolvencies”, added Ms Petford and Mr. Driscoll.

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