ELFYN LLYWD MP CALLS FOR STATUTORY PAYMENT PROTECTION FOR SMALL CONSTRUCTION FIRMS

With construction insolvencies in Wales rising at an alarming rate Plaid Cymru’s Westminster leader, Elfyn Llywd MP has called for statutory protection for small construction firms.

He has laid an amendment to the Local Democracy, Economic Development and Construction Bill allowing firms to ask for adequate security for payment such as bank guarantees and payment bonds. In the event that the security is not forthcoming a firm will be able to cease work and, thus, cease to offer further credit. This measure does not apply to householders.

Speaking after laying the amendment Elfyn Llywd MP commented:

“Representatives of small firms in the Welsh construction industry have told me that the increase in credit periods – now often up to 120 days and over – imposed upon SMEs mean that their payers may not be around to make payment.”

He added:

“Moreover there is very little that firms can do to protect themselves against the risk of payer insolvency. Once an electrical or air conditioning installation has been put in it cannot be taken out.”

Speaking on behalf of over 2000 firms in the Welsh construction industry Andrew Marchant of the Specialist Engineering Contractors’ Group welcomed the amendment:

“Construction is bedevilled by poor payment practices. Elfyn Llwyd’s amendment, if passed, will make a real difference to SMEs.”

The amendment will be debated at Report Stage in the House of Commons. In the meantime Elfyn Llwyd is calling on all Welsh Westminster MPs to support it in the debate.