Labour leader: 30-day payment terms should be standard
The Labour party leader Jeremy Corbyn has said that he supports a minimum payment period of 30 days for invoices issued by builders in the construction industry and that this should be enshrined in law.
Speaking to Construction News, Corbyn said that the Prompt Payment Code which is currently voluntary could be toughened up to protect small and medium-sized construction firms. He pointed out that the 120-day payment terms of companies like Carillion are devastating for smaller contractors. He says that clients in the public sector should be the ones to change this culture of late payment.
Sarah McMonagle from the Federation of Master Builders agrees that the industry should be moving towards supporting smaller contractors, but that any move towards a 30-day invoicing scheme would need to be carefully thought through. In particular, she would want to ensure that larger contractors were given time to adjust to any change in legislation.
This view was shared by the Chief Executive of the Civil Engineering Contractors Association who said that any additional legislation would need to take account of that which is already in place under the Late Commercial Payments Act. Although he agreed that it is time to find a better way to do things.
Corbyn also acknowledged the issues of skills shortages and a lack of building capacity that are plaguing the industry at the moment. He believes that more workers would help to deliver the housing and infrastructure needed and this requires good training.