Businesses: Contracts and Payments

Lord Steel of Aikwood Excerpts

Wednesday 3rd November 2010 Lords Chamber

Asked By

[Lord Steel of Aikwood]

To ask Her Majesty’s Government what steps they are taking to encourage large companies, with regard to contracts and payments, to act considerately towards small and medium-sized enterprises with which they deal.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)]

The Government support the Institute of Credit Management’s prompt payment code, which requires signatories to pay according to agreed terms and to give clear guidance to suppliers. The code is working—Experian analysis suggests that signatories represent around two-thirds of total UK supply chain value. We are also helping suppliers to help themselves through the managing cash-flow guides, which help suppliers to manage their customer relationships, payment terms and invoicing arrangements.

--- Later in debate ---

[Lord Steel of Aikwood]

My Lords, that is a most welcome and encouraging reply, following as it does on the policy of the previous Administration and the CBI and the Institute of Directors. Will the Government go a little bit further and consider establishing a blacklist of companies which fail to observe these exhortations when it comes to giving public sector contracts?

[Baroness Wilcox]

My Lords, the question was whether the Government will create a blacklist of firms which consistently act in an inappropriate manner. I do not think the previous Government did that and I do not think we will. The Government are working with the UK’s main business organisations and UK business to promote and encourage good practice. If the noble Lord knows of a practice that has been brought to his attention which is not being sorted, I hope that he will contact me to see whether my department can help in any way.