Covid-19: Economy

Lord Risby Excerpts

Thursday 4th June 2020 Lords Chamber

[Lord Risby (Con)]

My Lords, for a number of years I have been chairman of the Small Business Bureau, which works closely with the cross-party Genesis Initiative, supported by 115 trade associations. This afternoon, I will look at the SME sector specifically, which, pre-coronavirus, provided 60% of employment in the UK in 5.82 million businesses, with a turnover of £2.2 trillion.

I bring to your Lordships’ attention one clear measure to boost SME recovery: clamping down on late payment, which remains a scourge inhibiting cash flow. Pay UK has reported that late payment to SMEs before Covid-19 had risen steeply to £23.4 billion—up £10.4 billion from £13 billion owed in 2018. According to the Government’s payment practices website, 59% of the UK’s largest businesses pay their suppliers more than 30 days after invoices have been submitted. Nearly half report that 25% or more of the invoices they receive are not paid according to the terms agreed. If invoice payments are speeded up, the injection of cash flow into the economy will be a great boost.

I am fully aware that successive Governments have genuinely tried to deal with this problem and to ensure that government departments follow good practice. Indeed, before the onset of Covid-19, the Small Business Commissioner had begun to name and shame late-payers. However, can my noble friend urgently pick up the cudgels on this and make it a clear objective of government policy, as we all try to encourage necessary liquidity to get ourselves out of this economic crisis?