Waveney MP Peter Aldous yesterday introduced his ten minute rule bill to the House of Commons concerning the ring fencing of cash retentions for Small and Medium Enterprises (SMEs) in the construction industry.
Research commissioned by the Department for Business, Energy & Industrial Strategy (BEIS) revealed that over a 3-year period £7.8bn worth of retentions was outstanding for small businesses. Cash retentions are withheld as security in case a firm fails to return to rectify non-compliant work. However the monies are primarily withheld to bolster the working capital of the party withholding them. Furthermore the practice gives rise to widespread abuse with the monies being withheld for three and more years.
This prompted Peter to act by introducing a bill which would secure and release on time these retentions by way of a deposit scheme. He said,
“SMEs are the backbone of the UK economy, which is why they need support and protection.
There is a clear need to build more houses, and with construction being a tough industry and uncertainty surrounding many aspects of the economy, small businesses need as much support as possible. We therefore need action taken to protect these monies before more millions are lost, and this bill is about making sure that people’s money is safe so that businesses can grow and invest in their future.
I was pleased to be able to explain to the House why the issue of lost revenue due to upstream insolvencies has caused such damage to SMEs not only in my constituency but also nationwide, and to offer a workable solution to the problem.”
The bill passed its first reading stage and will have its second reading on Friday 27th April 2018.
