Small and Medium-sized Enterprises: Late Payments
Debate between Viscount Younger of Leckie and Lord Harrison
Lord Harrison
To ask Her Majesty’s Government what progress has been made on the late payment of debt for small and medium-sized enterprises.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie) (Con)
Late payment has a damaging effect on the best-run companies, which is why the Government are taking firm action. Through the small business, enterprise and employment Bill, large firms will be required to publish their payment practices, which will hold poor payers to account and help small businesses to be paid on time. Further reforms will ensure that public authorities run timely and efficient procurements and give Ministers greater powers to investigate procurement complaints.
Lord Harrison (Lab)
My Lords, given that the Federation of Small Businesses finds that five out of 10 of its members are experiencing difficulties with late payment and that members of the Forum of Private Business have experienced a 23% rise in the problem, along with the NSCC discovering that only 3% of small firms are paid within the agreed 30-day period, is it not time to enforce the labour legislation permitting charging of commercial debt against both big businesses and big government?
Automotive Industry
Debate between Viscount Younger of Leckie and Lord Harrison
Viscount Younger of Leckie
Yes, indeed we do. That gives me a chance to applaud the Formula 1 and car industry in this country, where we are number one in the world.
Lord Harrison (Lab)
Does the Minister recognise that the automotive industry now is classically an industry of the European Union? Does he celebrate with me the German investment through BMW and VW at Crewe with Bentley Motors and with Rolls-Royce Motor Cars, the enormous improvement of the product and the increase in the number of jobs?
Viscount Younger of Leckie
I very much welcome the news that came through today that Bentley will consolidate its W12 engine production in Crewe. This will secure 100 new jobs, which will help families and give them greater security to look ahead to their future.
Small Businesses: Late Payments
Debate between Viscount Younger of Leckie and Lord Harrison
Lord Harrison
To ask Her Majesty’s Government what progress has been made in ensuring that small businesses are not penalised by the late payment of bills.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie) (Con)
The Government take the problem of late payment very seriously and have taken a number of steps to support small businesses. We have strengthened the UK’s legislative framework on late payment; we have put pressure on large companies to commit to good payment practices, resulting in the majority of FTSE 100 companies signing up to the prompt payment code; and we have helped small businesses help themselves by improving their access to working capital.
Lord Harrison (Lab)
My Lords, given that the Forum of Private Business says that action is now long overdue on this issue, and given that 94% of the firms in the British Chambers of Commerce are habitually paid late, when will this quixotic Government, forever tilting at the wrong windmills of public policy, implement the late payment on commercial debt legislation so that government departments pay on time and big businesses do not use small businesses and suppliers as shadow banks? Will the Minister institute a kitemark for those good firms that do pay on time and that are currently unprotected by this idle Government?
Viscount Younger of Leckie
My Lords, we need no lessons from the former Government opposite on how this matter is handled. The fact is that tackling late payment requires a change in business culture and that the Government alone cannot solve the problem without interfering in the freedom of businesses to contract with each other. However, the noble Lord makes an important point about a kitemark and, in effect, an accreditation system. The Prime Minister decided to consult on this issue and on 7 December we published a discussion paper on building a responsible payment culture in the UK. We are working with business organisations to ensure that we get views from a wide range of businesses, and we will decide what further legislative or non-legislative action to take based on responses to this paper.