Dragons' Den presenter Sean Gallagher has lashed out at the Construction Industry Federation (CIF) and its director general Tom Parlon for "blatant and wholesale abuse of the smaller sub-contractor" in order to protect the interests of the large developers.
Thousands of real construction jobs have been lost because the construction business is stacked in favour of the large developers who control the CIF for their own purposes, Gallagher told the Sunday Tribune. "I think Tom Parlon is trying his best but you have to remember who is paying his salary."
The Cavan-born entrepreneur, who has left the home technology company, Smarthomes, which he set up with Derek Roddy in 2002, confirmed that Fianna Fáil had approached him to stand in the Louth constituency after justice minister Dermot Ahern announced he would not contest the next general election.
"I'm considering it" said Gallagher, who stressed he had been pursuing the issue of the small builders for years and said his outburst on the topic at a recent CIF meeting had nothing to do with whether he stands for election or not.
The Dragons' Den star explained that in the construction sector, developers who enter into a contract with sub-contractors do not have to have any money deposited in the bank to show they can honour their debts. In addition, Gallagher said, a subcontractor has no rights to get his materials back if he is left unpaid when the developer goes into liquidation.
Gallagher said a "grossly unfair" situation in which genuine builders are forced to carry the can for the collapse of developers had been a major factor in the property bubble over the past 10 years.
Gallagher said that when a development was finished, instead of paying off the builders the developer used the money from the sale of the houses to buy more land to start another development.
Gallagher has garnered the support of Senator Feargal Quinn to introduce legislation which will require developers to sign a bond which will ensure builders are paid in the event of a collapse.
"It is similar to that which operates in the travel business and will provide builders with security of payment. If this was in place 10 to 15 years ago we wouldn't be in the situation we're in now," said Gallagher.
He said that while the CIF has eventually got round to backing the bill, it wants to water down the provision requiring developers to take out a bond and instead merely wants them to show evidence of ability to pay their debts.
"This would be of little use to builders who need the certainty a bond would bring," he said.
A CIF spokesman dismissed "any suggestion of the kind made by Mr Gallagher. The CIF represents all sectors of the building industry including sub-contractors," he said.
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