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Reform of retentions

Who backs reform of retentions?

  • Reform of cash retentions in construction is supported by a broad range of politicians, business bodies, construction trade associations, and professional bodies.
  • Business bodies in support include the Federation of Small Businesses, the Institute of Directors and British Chambers of Commerce.
  • There is broad cross-party support for reform, with supporters from Conservatives, Labour, Liberal Democrats, SNP, DUP, Plaid Cymru and the Green Party. Supporting MPs represent 18 million people in constituencies covering the whole of the UK.
  • Some of the senior MPs supporting retentions reform include: Ken Clarke, Vince Cable, John McDonnell and 15 select committee chairs.
  • The BEIS select committee published a report on ‘Small businesses and Productivity’ in December 2018, calling for cash retentions to be held in independent accounts.

What is the Aldous Bill?

  • The ‘Aldous Bill’ is a ten-minute rule bill introduced in the House of Commons by Peter Aldous MP. Its full title is the ‘Construction (Retention Deposit Schemes) Bill’.
  • The first reading of the Aldous Bill went unopposed on 9 January 2018, just 6 days before the collapse of Carillion. The second reading is scheduled for 22 March 2019.
  • The Bill aims to change retentions practice and protect monies from insolvency, by holding the retentions in third party bank accounts.
  • BESA and ECA are in regular discussion with Government and the Construction Leadership Council and have raised the Bill directly with Business Secretary Greg Clark.
  • Abuse of retentions has already been legislated against in countries including the USA, Germany, France, New Zealand, Australia and Canada.

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