I support the noble Lord, Lord Aberdare. As I mentioned at Second Reading, I have an interest in this area, which is on record. The question raised here is a good one and is evidence of the need for proper consideration of the broad range of problems that retentions imply. Certainly, it is well noted that when you have major construction projects, very often the people who are in at the very beginning—for example, those doing the foundations and the steelwork—do not get their payments until the car park is completed. I am not sure whether that would be covered by a completion certificate. Let us face it, the construction industry is not really the most litigious
of industries; indeed, people in it often cannot afford to have recourse to the law. Equally, they do not always have very detailed and specific contracts and, as we go down the supply side, the degree of vagueness becomes even more apparent.
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I return to the amendment and its request for a review of retentions. As the noble Lord, Lord Aberdare, said, there have already been a number of inquiries. I was engaged in a couple of them in the first decade of this century. These inquiries recognised that retentions occur. Indeed, it has been noted that there is an all-industry agreement that they should end by 2025. However, certainly the noble Lord, Lord Aberdare, and I believe that they should end as soon as is practicably possible. To do that, we should have a proper inquiry. If retentions occur on the scale that has been suggested, the 10-year process is far too slow and leaves too many businesses exposed to what is in effect malpractice.
Many allegations of payment abuse have been made. The substance of these allegations has been considered, as I said, and the view has been expressed that while retentions may take place, it is not a major problem. It is a bit like when you say, “We only have 2% unemployment”, but the people who are unemployed are 100% unemployed. The people who have not received payment are very often part of small businesses. We are talking here about almost micro-businesses, where families have mortgaged their house to set up in business and the owner’s wife probably does the books. They have probably put their homes on the line, as I say. For them to be put in a difficult position is intolerable and we should seek to end this as quickly as we can.
The amendment would require evidence of retention abuse to be gathered and to be assessed within nine months, and for the regulations to be brought in 18 months later. I realise that this will be our Achilles heel on this amendment, as Governments must never be dictated to. They must never be given timescales that would embarrass them if they were not able to meet them; that is too explicit and dictatorial. However, I say to the Minister that matters of that nature can be addressed by amendments and discussion between the people in this Committee. That is why we have Committee and Report stages. If there are deficiencies in the wording, I am sure that it is not beyond the wit and intelligence of the vast army of civil servants in Victoria Street to come up with a form of words on this issue that would be mutually acceptable.
As I said earlier, the real objective of the amendment is that the evidence should be gathered and the scale of the problem should be assessed. If the concerns are justified, waiting 10 years for them to end is wholly unreasonable, particularly if the problems could be resolved rather more quickly. A timescale is hinted at. Regardless of whether we have to be specific, it would be rather good if before this Government leave office in 2020 they could say, “Well at least we did one thing right and ended retentions”. The Minister may well find that that is her memorial when she leaves office: she was the Minister who ended retentions.
This is a moderate and modest amendment that could make a great deal of difference. At the heart of the retentions issue was the distrust that existed between the various tiers of contractual involvement in the construction industry. People never believed that the work was going to be done properly, so they would always screw them to make sure that the work was done. I have to say that my experience of construction is that we are now living in different times, and indeed there is evidence that a number of the major contractors do not carry on this process. However, I have to say that in the public sector—that is, the health service and local government—I am sure that a number of examples would come out in a review of this issue. We would find that it is not just the baddies in the private sector that I as a Labour man might wish to castigate; many local authorities, probably including some that are controlled by the Labour Party, are just as guilty of holding on to money for far too long before they make the payments.
The construction industry is rather rough and ready in a number of respects, and it requires specific and special treatment outwith the terms of reference of the Small Business Commissioner and his responsibility for payments. There is a degree of exceptionalism within the construction industry and this amendment will not resolve the problem, but I think that it would serve to provide the Government with the evidence that hitherto they have not been prepared to collect properly—or, if they have had sight of it, to deal with properly. We know that the Minister is concerned about the issue of payment abuse. In my view this is a classic example of payment abuse for a specific industry in which it is more widespread than it needs to be or that it should be. It should be made a far greater priority than saying that we will try to have it all done by 2025. We could in fact resolve the matter by the end of this Parliament if we just took out the rather specific timescale.
The Government have a responsibility to address this issue with a degree of speed and consideration for a large number of people who I have to say are more likely to support parties other than the Labour Party; some of them may even be supporters of UKIP who the Government are trying to pull back. The fact is, though, that these are people who have made great sacrifices to start up new businesses. They are very vulnerable so they need a degree of protection and support, and they need it quickly.