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John Lewis poised to launch direct payment contracts

Retailer John Lewis is set to launch new contracts this month allowing it to pay subcontractors directly if main contractors withhold money unreasonably.

The chain, which owns Waitrose supermarkets as well as the eponymous department stores, will insert clauses into its contracts giving it the option of paying subcontractors directly if payment problems are not resolved through discussion.

John Lewis’s head of construction, engineering and environment Tony Jacobs said: “I expect us to have something to announce and in place in September.

“We want to be able to get more involved if necessary and have clauses we can use if we are not satisfied with the answers we get.”

He said John Lewis was “increasingly concerned” that some main contractors were “misusing subcontractors’ funding as a means of performance managing the supply chain” which could put subcontractors at risk.

He said John Lewis had discussed the proposals for the clauses with its contractors and were working on the final details. He said: “We have had good discussions with contractors to understand what behaviours we are trying to drive. We want people to pay on time and we do not want businesses put at undue risk. We are prompt payers and we expect that prompt payment to go through the system.”

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