The Government is setting up a small business commissioner to help firms tackle a problem that so many of them have told me about –and that is that so many are owed billions of pounds in late payments for goods and services.
I strongly support such moves because small businesses are the backbone of our economy and provide the jobs that allow people to enjoy life, liberty and the pursuit of happiness, to coin a phrase. The state must do its utmost to protect and promote their interests.
But I have another pressing item that the Government has previously neglected and that the commissioner should also take up. I am told that thousands of small construction businesses lose millions of pounds through the cash retention system.
Retentions of five to 10 per cent are withheld as security against failure to remedy defects, which is understandable. Half the retention should be paid back when the work is completed, but many wait for three or four years or never receive them if the payers go into insolvency.
The bitter truth is that good companies are going to the wall, and thousands of jobs are being lost.
My Labour colleague Debbie Abrahams tried to amend the law in the last Parliament but the Government would not play ball.
The new Government should think again. We need to make sure that construction companies are treated fairly. I hope for cross-party support for such reform.