Small Businesses: Late Payment
Debate between Baroness Sharples and Baroness Neville-Rolfe
Baroness Neville-Rolfe
My Lords, there are a lot of questions there. I have already outlined three important measures, but we have also strengthened the voluntary Prompt Payment Code to promote 30-day payment terms as the norm, and will enforce a maximum 60-day payment term for all its 16,000 signatories. We will also consult this summer on how to give representative bodies—such as the Federation of Small Businesses—wider powers to challenge grossly unfair payment practices. The recent changes to the code, led by my right honourable friend in the other place Matt Hancock, set new expectations on signatories to treat suppliers fairly and make payments in a reasonable amount of time. Alongside the other measures that we are taking, we are on the way to taking the first steps in changing the culture in this key area.
Baroness Sharples (Con)
Can my noble friend confirm that all government departments pay their small suppliers on time?
Baroness Neville-Rolfe
My Lords, in the public sector there are clear rules. Payment has to be made within 30 days, so in the BIS department, which I can speak for, 99.5% of invoices are paid within 30 days, and 80% within five days. We have been trying to move to a five-day practice across government. In addition, interest is payable on late payments and administrative costs. It would probably be difficult to confirm that every small business is always paid on time, but we do what we can, the direction of travel is clear and we are leading from the front in the public sector.