Small business minister pledges to work with Labour to end practice of withholding final payment to subcontractors

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The construction industry practice of holding back payments on jobs should not be necessary, small business minister Matthew Hancock has said.

Retentions payments to sub contractors are usually held by main contractors or clients until many months after a job is complete as a way of ensuring the subcontractor will return to fix any defects.

In a Parliament debate to discuss the forthcoming Small Business Bill yesterday, Hancock said he would work with the Labour party and the industry to clampdown on the use of retentions.

Hancock said: “We are working with industry to move to a position where retentions are no longer necessary, and I would be happy to work with the opposition members to push that further.”

The Specialist Engineering Contractors’ (SEC) Group, which has run a long-standing campaigning against retentions in construction, said this was the first time the practice had been debated in the House of Commons.

Hancock made his comments in response to a question from Labour MP Debbie Abahams, who is supporting the SEC Group campaign and is urging the government to force companies to publish their policies, practices and performance on retention monies in an effort to stop the practice.

SEC Group chief executive Rudi Klein said: “Debbie Abrahams has now obtained a commitment from the government to pursue this issue with the opposition.

“But we shall keep up the pressure. The best way to get rid of the unfair and outdated practice of retentions is to put them out of reach of those withholding them - by putting them into trust.”