Construction Industry: Retention Payments

Lord Stevenson of Balmacara Excerpts

Thursday 14th January 2021 Lords Chamber

[Lord Callanan (Con)]

I do not have figures for the public sector, but not withholding retentions is government policy—although I am aware that some departments and agencies do. Unfortunately, we do not have the power to instruct local authorities in this matter. If there are any figures available, I will of course let her have them.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, I declare an interest as my wife is a construction lawyer. This issue was raised regularly by the late Lord O’Neill of Clackmannan, and I am sure I speak for the whole House when I say that we miss him. The consultation referred to by the noble Lord, Lord Aberdare, is highly critical of current practice. It also stresses that the pandemic raises major insolvency worries. Why do the Government not use their Covid-19 emergency powers either to introduce an RDS or to abolish retention payments and try out this new policy?

[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.