Small Businesses: Late Payments

Lord Young of Norwood Green Excerpts

Wednesday 18th December 2013 Lords Chamber

[Viscount Younger of Leckie]

My noble friend makes a good point, of which the House will certainly now be aware—as am I.

[Lord Young of Norwood Green (Lab)]

My Lords, in January the Minister of State said that he would name and shame FTSE 100 firms that failed to sign up to the prompt payment code. However, companies that pay their small suppliers in 90 or 120 days could still be signatories to the code. In fact, at least one FTSE 100 company extended its payment terms and then signed up to the code. The Government know that 2,000 firms went bust last year due to late payments. Is it not time that they implemented minimum standards for all signatories to the prompt payment code? That is not really a lesson, but a strong recommendation for practical action.

[Viscount Younger of Leckie]

There are two points there. First, on the example to which the noble Lord alluded, my honourable friend the Minister of State in the other place followed up quickly on that particular issue. That major company spoke to its suppliers, which were content that there was no particular issue. As far as we are aware, none of the suppliers has complained to the Institute of Credit Management, which they are entitled to do, so it is not possible to judge the merits of that particular case. However, the noble Lord makes a good point.