Small Businesses: Late Payments

Debate between Lord Prior of Brampton and Lord Harrison

Monday 11th September 2017 Lords Chamber

[Lord Harrison]

To ask Her Majesty’s Government what action they have taken to assist small businesses in accessing finance by tackling the issue of late payment of commercial debt.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Prior of Brampton) (Con)]

My Lords, we know how important tackling late payment is, especially for smaller businesses. We are taking forward a number of measures to improve payment practices across the public and private sector, including establishing the Small Business Commissioner and introducing transparency reporting in both public and private sectors.

[Lord Harrison (Lab)]

My Lords, there is an abject and continuing failure from this Government to outlaw late payment on commercial debt. The Federation of Small Businesses says that we lose 50,000 viable businesses every year, and we lose some £2.5 billion to the Exchequer, because of the failure to act on that effectively. Would the Minister write me a short but elegant essay on the question of how, given tonight’s vote in the other place, we might transport and import European legislation on this issue into UK law?

[Lord Prior of Brampton]

My Lords, of course I understand that late payment is very serious for many small businesses and cash is very important to them, but we have made very significant progress in this area. In central government, for example, 95% of all commercial debt is settled within seven days and 99% is settled within 30 days. It is true that in some parts of the economy—in construction, for example—payment terms are later. We believe that by bringing forward the Small Business Commissioner and bringing greater transparency to this area, it will get better.