Small and Medium-sized Enterprises

Debate between Lord Cotter and Lord Wallace of Saltaire

Tuesday 23rd October 2012 Lords Chamber

[Lord Cotter]

To ask Her Majesty’s Government what action they are taking to address the issue of late payments to small and medium-sized enterprises.

[Lord Wallace of Saltaire]

My Lords, central government policy is to pay undisputed invoices within five days and to pass 30-day payment terms down supply chains. Moreover, the Crown representative team in the Cabinet Office is encouraging prime contractors to pay more quickly than the 30-day commitment on a voluntary basis. We have tasked departments across Whitehall to manage their contracts to ensure that prime contractors pay their subcontractors within 30 days.

[Lord Cotter]

I thank the Minister for his Answer. Will he and his officials look at the important reports and surveys carried out by the Federation of Small Businesses and the British Chambers of Commerce and note their recommendations? There is a lot of very good information in there. I am glad that the Government have improved their record on payment, but it is still not satisfactory that local councils and other departments are not paying as promptly as they should. I am encouraged by the Minister saying that government departments are going to look at their suppliers. I ask him to ensure that they sign up to the prompt payment code.

[Lord Wallace of Saltaire]

My Lords, I have it in my notes that the Local Government Association, in the form of no less an important person than the noble Baroness, Lady Eaton, has agreed that local authorities will be encouraged similarly to follow best practice in this regard. The Cabinet Office has among other measures introduced a “mystery shopper” service through which small contractors who are dissatisfied with the service they are getting, either from a department or from a prime contractor, can anonymously feed this information through to the Cabinet Office.