Proposal to improve the construction contract payment regime will go to the House of Lords

A bill to improve the payment regime on construction contracts is to be introduced to the House of Lords on Friday.

The Local Democracy, Economic Development and Construction Bill, part of the government's legislative business for next year, will more firmly establish in law changes to the 1996 Construction Act.

Details, which are understood to have remained largely unchanged from those set out in the pre-Queen's Speech in May, will be announced on Friday. They will include measures to improve payment regimes and adjudications.

The government has also pledged to improve apprenticeships with an Apprenticeships Reform Bill.

The government's legislative pledges were set out by the Queen in her speech today marking the state opening of parliament.

The speech set out the government's legislative business for the year ahead, though this was mostly set out in Gordon Brown's “pre-Queen's speech” in May.

It included a banking reform bill, which will allow the Bank of England, the Treasury and the Financial Services Authority (FSA) to intervene sooner to prevent another banking crisis.

The announcement of a series of reforms in the financial sector to crack down on the banks has been welcomed by the Federation of Small Businesses.

The FSB described it as a “big step forward” which would aid SMEs in the economic downturn by strengthening the banking code and fining banks which break the rules.

Measures have also been announced to create a more level playing field for smaller businesses to take on construction projects.

However the Federation expressed disappointment over plans to charge a business levy on top of non-domestic rates that it said small businesses are currently struggling to pay, which it said was “a bill that is not of its time for a struggling economy in 2009.”

John Wright, National Chairman of the Federation of Small Businesses, commenting on both the Queen's Speech and accompanying Government announcements, described the Queen's speech as a “mixed bag for small businesses this year.”

“Reforms to the financial sector are very welcome, following a very difficult year for small businesses which have seen costs on overdrafts rise and loans being defaulted.”

But he added that the FSB was concerned small firms would struggle to pay extra business rate charges in what would be a very difficult year.