As part of their election manifesto, the Liberal Democrats and the Labour Party have promised to combat the multi-billion pound late payment problem crippling the construction industry
Labour Party leader, Jeremy Corbyn, and Liberal Democrat leader, Jo Swinson, have pledged to tackle the issue of late payments.
Almost a quarter of insolvencies (23%) are caused by late payment issues. SMEs face particularly unfavourable terms and are “placed in a stranglehold by larger companies deliberately paying late’.
The payment and mental health survey by ECA and BESA has also been launched to understand how poor payment practices are impacting mental health.
Swinson has promised to make the prompt payment code enforceable, meaning that all government agencies, contractors and companies with more than 250 employees must sign up.
Speaking to the CBI earlier this week, Jeremy Corbyn also acknowledged the need to take action when he said: “Small businesses will see late payments tackled, whether those late payers are larger companies or government.”
Phil Hall, AAT head of public affairs & public policy, commented: “Late payments have an incredibly negative impact on British business, especially the SME community, and so after years of minor tweaks, voluntarism and ineffective tinkering, it’s encouraging to see the Liberal Democrats and Labour recognise the need for legislative reform.
“We very much hope that the Conservatives will now take note and commit to the meaningful changes proposed by AAT rather than sticking with the inadequate measures they announced earlier this year.”
Ifan Glyn, FMB senior hub director, added: “On a positive note, I strongly welcome the Lib Dems’ pledge to enforce big businesses and government agencies to adhere to the prompt payment code.
“Smaller building firms are being held back by the abuse of retentions and late payment practices that are rife. Getting tough on serial offenders will help small businesses get back to doing what they do best, which is delivering quality work and training the next generation of builders.”