VIEW FROM THE LOBBY
by Carol Wrench, head of Communications
Statement of intent
Rest assured, the ECA will continue to keep up the pressure on government
cent of the time. As such, we want this commitment to be passed into legislation and for it to feature prominently in the Chancellor’s statement. As further proof that government seems to be taking the whole issue of payment seriously, a general consultation into payment practices closed in January. We also hope that some of the outcomes from this consultation are included in the Budget statement – particularly legislation in respect of payment terms in the private sector. Currently, the law is flexible. Without rigid legislation, it is simply not feasible to expect contractors in the supply chain to demand favourable terms without fear of losing out on work, and we have made this clear in our submission.
A
lthough Chancellor of the Exchequer George Osborne is keeping his cards close to his chest, we can speculate on one
or two measures we expect to see in the Budget statement this month – and outline some we’d like to see from our own wish list. There has been much talk recently of an increase in the minimum wage. If this happens, we hope that, given the tentativeness of the recovery, any increase in employer costs will be offset by a decrease in business rates or a reduction in tax on profits, to help soften the blow. By the same token, we also know that house building is picking up, so we are not expecting to see many, if any, new breaks to encourage new build construction.
Fair payment Fair payment continues to dominate the
lives of many electrical contractors, and thanks to the efforts of ECA and others, government finally seems to be really taking genuine notice of the effect that
poor payment practices have on our sector. We hope that payment is not only included in the Budget statement, but that it gets more than a passing nod. Last year, following an ECA meeting
with construction minister Michael Fallon, government introduced the Fair Payment Charter for Construction. Earlier this year, the ECA again raised this very important issue with minister for the Cabinet Office, Francis Maude. At this meeting, Mr Maude expressed his support for rolling out solutions such as project bank accounts, and suggested that government was considering legislating for prompt payment terms to be passed down the supply chain where a public body such as a school, hospital or council is the client. Those at the top of the supply chain
continue to enjoy favourable terms, as evidenced by our payment survey this January, in which 67 per cent of ECA contractors told us they received 30-day payment terms from the main contractor on public sector projects less than 20 per
Energy efficiency Energy efficiency is another area of
concern for ECA members, and one that we would hope to appear in the March statement. One year on, and the Green Deal still fails to live up to expectations; if government seriously wants this initiative to succeed, it needs to look at reducing interest rates on Green Deal loans, as these are simply not competitive. Alternatively, they could better link small-scale renewable energy generation with the Green Deal so that householders would not have to pay up-front costs to install these measures. If the UK hopes to meet its ambitious carbon reduction targets, initiatives such as the Green Deal need to be properly promoted and the proposition made more compelling. There are bound to be some disappointments as well as some surprises in the Budget statement – but rest assured, we will continue to keep up the pressure on government, particularly where fair payment is concerned.
16 ECA Today March 2014
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