Government Building Contracts

Oral Answers to Questions — Environment – in the House of Commons at 12:00 am on 30th June 1993.

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Photo of Mr David Evans Mr David Evans , Welwyn Hatfield 12:00 am, 30th June 1993

To ask the Secretary of State for the Environment what decisions he has reached on the need for a pay-when-paid clause in Government building contracts.

Photo of Tony Baldry Tony Baldry Parliamentary Under-Secretary (Department of Environment)

I am not considering any such clause. Government contracts are required to contain a clause committing the supplier or contractor to pay his subcontractors promptly.

Photo of Mr David Evans Mr David Evans , Welwyn Hatfield

Is the Minister aware that many companies across the country have full order books and are profitable but that they unfortunately cannot get paid? Will he assure me that the Government will set an example by paying their bills on time? Does he agree that the lot opposite know nothing about paying bills as their bills are paid by the National Union of Public Employees, the Confederation of Health Service Employees and the National and Local Government Officers Association, among others? Does he agree that the label "No say, no pay" hangs very well around their necks?

Photo of Tony Baldry Tony Baldry Parliamentary Under-Secretary (Department of Environment)

My hon. Friend is absolutely right. Those who do good work deserve to be paid promptly. All Government contracts include provision for the prompt payment by main contractors of their subcontractors, usually within 30 days of receipt.

Photo of Doug Henderson Doug Henderson , Newcastle upon Tyne North

The Minister will be aware that there is a great deal of concern among many subcontracting companies, including small companies in the building industry, that they are not getting a fair deal as subcontractors to main contractors for Government contracts. Will the Minister be honest with the House and acknowledge that the reason for contractual arrangements not being sufficiently tough is that main contractors, such as Tarmac, have received favours from the Government in their attempts to privatise the Property Services Agency?

Photo of Tony Baldry Tony Baldry Parliamentary Under-Secretary (Department of Environment)

That is a ludicrous suggestion. As a Minister who sponsors the construction industry, my only ambition is to see the healthiest possible construction industry. That aim is something which the Labour party would not understand, however, because when it was last in government, it introduced a moratorium on many infrastructure contracts. We have clear Government contracts that stipulate that subcontractors should be paid within 30 days of their bills being presented.