Small Businesses: Late Payments
Debate between Baroness Browning and Lord Popat
Lord Popat
My Lords, 75% of the FTSE 100 companies have signed up to the prompt payment code; something like 1,500 companies are now signing up to it. With regard to the public organisations, including police authorities, we are taking every action possible. My colleague, the Minister Michael Fallon, has written to them, giving them 90 days to ensure that they sign up to the prompt payment code. With regard to funding, the Government have a number of schemes to help SMEs finance their existing cash flow, including funding for lending.
Baroness Browning
My Lords, what assessment have the Government made of the potential for early payment schemes for the cash flow of small businesses?
Lord Popat
My Lords, the Government fully support early payment schemes, which offer suppliers the option of early payment in return for a discount or a fee, as long as that is offered in conjunction with fair payment terms rather than as a substitute. The Government’s view is that all businesses should agree fair payment terms at the outset of the contract and that they should pay their suppliers on time, according to the agreed times.