Government Sets Out Priorities

At the State Opening of Parliament last week, the King outlined the programme of legislation that the Government intends to pursue in this parliamentary session. Highlighting that the UK’s ‘economic security depends upon world class infrastructure’, this year’s King's Speech covered 35 bills, and the key ones for businesses in construction include: 

• Commercial Payments Bill – Tackling late payments by introducing new measures such as maximum payment terms of 60 days, mandatory interest on late payments, and prohibiting the withholding of retentions.
• Steel Industry (Nationalisation) Bill – Bringing British Steel into public ownership, subject to a public interest test, to safeguard UK steelmaking capacity.
• Northern Powerhouse Rail Bill – Improving services between the North of England’s key cities by providing the necessary powers to take forward delivery of Northern Powerhouse Rail when the design has been completed.
• Highways (Financing) Bill – Unlocking greater levels of private capital investment in road infrastructure, such as the Lower Thames Crossing, through the introduction of a new Regulated Asset Base funding model.
• Remediation Bill – Speeding up the removal of unsafe cladding by introducing a new legal duty to remediate, making product manufacturers pay towards remediation, and mandating how external wall assessments are carried out.
• Social Housing Renewal Bill – Increasing long-term investment in social housing by incentivising the building of new social rented homes and protecting existing stock.

The Commercial Payments Bill was introduced to Parliament this week with its first reading in the House of Lords. It sets out how existing legislation will be amended to introduce the new payment measures, including the ban on retentions. Once the section of the Bill relating to retentions comes into force, there will be a two-year transition period, during which time retentions can still be used. There will then be a ‘last retention day’ one year after that when all retention monies will become due and must be paid. The Bill is expected to receive Royal Assent in early 2027 and the Government has confirmed that it will consult on the timing for the section on retentions to come into force.