Ministers have ‘betrayed’ small firms in the construction industry, by pressing forward with a new law that will penalise smaller contractors, according to the Liberal Democrats.
The Lib Dems claim the Local Democracy, Economic Development and Construction Bill, forced through Parliament this week, gives preference to large development companies over smaller firms where disputes arise between the two.
Local MPs Julia Goldsworthy and Dan Rogerson proposed amendments to shift power to small builders and tradesmen from their larger paymasters. They say their proposals would have ensured that small businesses are able to command a fair fee for their work, and demand that it be paid on time.
Liberal Democrats also supported moves to bring about fair payment adjudication where there are disputes and protection for small businesses when larger debtors become insolvent. The Party received strong backing for its stance from the Specialist Engineering Contractors’ Group (SEC), the Federation of Small Businesses (FSB) and Unite the union.
All three bodies are concerned that the Government’s proposals will have a detrimental effect on small businesses in the construction industry at a time when they are most vulnerable.
Goldsworthy MP commented: “I know first hand from talking to local construction companies how crippling red tape can be for them. The changes we proposed in the bill were focused on cutting out unnecessary complexity.
“Crucially they would have shifted the balance in favour of small businesses, whose cash flows are so vulnerable in these tough economic times. It’s nothing short of a betrayal that this Government – having left our economy in tatters – should then throw small firms to the lions at the very moment they most need protection.”
Rogerson added: “90% of the workforce employed in the construction sector are employees of businesses consisting of six of fewer people. Next year when the relevant requirements are implemented many small firms will have yet another struggle to survive.”
Rudi Klein, chief executive of the Specialist Engineering Contractors’ Group said: “The SEC represents thousands of SME’s across the construction industry.
“I was delighted that Julia and Dan were so supportive of the key issues affecting firms at this already difficult time and very appreciative of the way they got to grips with the complex nature of the problems that many are attempting to contend with such as cash flow and payment processes.
“I look forward to working with them and the Liberal Democrats on these and similar issues in the near future.”