Browning urges Sharma to protect sub-contractors
The business secretary Alok Sharma has been urged by the managing director of Global Tunnelling Experts to adopt G Accounts to ensure that contractors and employees are paid on time as the government embarks on its infrastructure programme.
In an open letter to the business secretary, Kevin Browning stressed the importance of ensuring that main contractors are not able to take advantage of sub-contractors. He pointed out that when this happens it is not just bad for the sub-contractor and their employees but it is bad for the government too.
Global Tunnelling Experts has offices around the world and has worked on projects of critical importance, such as the Hinkley Point C nuclear power station.
The full text of his open letter is copied below:
"Dear Secretary of State,
I welcome the fact that, as promised in the Conservative election manifesto, the United Kingdom is now embarking some of the largest infrastructure developments in its history. I am also well aware, as no doubt you are, that it is doing so in the midst of an unprecedented global pandemic and at time when national debt has now exceeded GDP.
It is therefore of critical importance that we hold tightly to the wheel that steers us.
With this in mind, I believe it is essential that the employees and contractors who are undertaking this work get paid in a timely fashion and that we avoid the sorry situation of recent years whereby a main contractor has won a major project and has unfairly taken advantage of a sub-contractor, in effect using them as a bank.
There is a very simple way of combating this and we can see it in action in the Netherlands. Under their rules, the main contractor must place an agreed amount of money owed to the sub-contractor in what is known as a G Account.
The money placed in a G Account can only be accessed with the signatures of both contractor and sub-contactor and the funds are only released once there is proof of compliance in regards to Tax and National Insurance deductions and payments.
It has the dual benefit of ensuring the sub-contactor and their employees are paid on time and that the government does not lose out on revenue. At a time of economic difficulty, both of these things are uncommonly important.
I therefore strongly urge you to look at implementing G Accounts as a simple and proven means of benefiting contractors, employees, the treasury and the country at large.
With best regards,