Small Businesses: Late Payments

Debate between Lord Leigh of Hurley and Lord Prior of Brampton

Monday 11th September 2017 Lords Chamber

[Lord Prior of Brampton]

My Lords, there is a natural reluctance for any Government to get in between supplier and customer in commercial relationships. If there is a problem, it is much better if it can be sorted out. As my noble friend Lord Hamilton pointed out, there are ways of getting redress. I am not sure what the figures are, but I imagine that, going back 30 years, you would find that the average number of days outstanding for commercial debts has come down considerably.

[Lord Leigh of Hurley (Con)]

Does the Minister agree that part of the problem is that the SME community is underbanked? Nearly half are permanent non-borrowers and 90% of the SMEs which do borrow do so from the big four banks. Surely the answer to the credit problem is further steps like those that the Government have taken in establishing the British Business Bank and encouraging the growth of alternative finance. I declare my interests to your Lordships’ House.

[Lord Prior of Brampton]

My Lords, the British Business Bank is not a commercial lender in the way that Barclays or NatWest is. Alternative sources of finance, be it equity or quasi-equity, and making smaller companies’ balance sheets stronger are clearly a good way forward.