Small Businesses: Late Payments

Baroness Maddock Excerpts

Wednesday 18th December 2013 Lords Chamber

[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.

[Baroness Maddock (LD)]

My Lords, I welcome the Government’s consultation, but I am sure that the Minister is aware that huge quantities of money are held up through retentions and that many small businesses never get complete payments at the end of their contract. As I understand it—I would be grateful if he could confirm this, and, if it is the case, do something about it—neither of these issues is part of the consultation that the Government have put forward. I hope he can assure me that they will be included.

[Viscount Younger of Leckie]

I cannot reassure my noble friend on that particular point, but I can reassure her that the discussion paper, Building a Responsible Payment Culture—from my department, BIS—seeks views on changing the business culture by increasing accountability and transparency, on encouraging small businesses to make better use of the statutory rights that they already have, on whether there is a case to enhance those rights and on how we can empower small businesses to help themselves reduce the risk of late payment.