Oral Answers to Questions

Toby Perkins Excerpts

Tuesday 27th June 2017 Commons Chamber

[Margot James]

There is, indeed, far too much abuse of the system of cash retention, and it has been going on for too long. The burden of administrative time spent securing payments and the drain on working capital weigh far too heavily on smaller firms in the supply chain, and I can assure the hon. Gentleman that we will be taking action.

[Toby Perkins (Chesterfield) (Lab)]

If the Government had only listened in 2015 to the amendments the Labour party tabled to the Small Business, Enterprise and Employment Bill, we would already have a solution. We were told then that the Government were going to take action. We were told again a few months ago that they were taking action with their proposals about naming and shaming businesses that did not publish their late payments. We now have yet another consultation. Research from Crossflow Payments shows that 74% of small businesses do not believe that the Government’s recent changes will make any difference. Can we have a policy that actually enforces action on late payments, rather than the series of consultations that we have had?

[Margot James]

I agree that action is needed, but it is important that we take the right action. We have undertaken a consultation, the results of which will be published shortly. That will be followed by a consultation on the 2011 changes to the Housing Grants, Construction and Regeneration Act 1996, which will consider the merits of ring-fencing retentions and the extent to which contractors are making the payment of retentions conditional on the performance of obligations under other, completely separate contracts.