Small Businesses: Late Payments

Lord Elton Excerpts

Wednesday 28th October 2015 Lords Chamber

[Baroness Neville-Rolfe]

I commend the work that the noble Baroness has done as digital champion and agree with her about the importance of digital to small businesses. As she will know from our productivity plan, we are producing a digital transformation plan because we need digital skills across the economy, government and small businesses if they are to take advantage of the opportunities the digital revolution brings.

[Lord Elton (Con)]

My Lords, when small businesses are late paying big businesses, the big businesses tend to charge interest on the outstanding amount. Why cannot this arrangement be made conventionally reciprocal?

[Baroness Neville-Rolfe]

My Lords, there are arrangements, particularly stemming from EU directives, about the payment of interest on late payments. The difficulty is that they are not always pushed, especially by smaller companies. We need to change the payment culture in this country, which is what the Small Business Commissioner is about and what the regulations that we will be bringing in early next year, bringing transparency to payment terms, are about as well. The small will know what the big are doing and whether they are up to scratch.