Commercial Debt: Late Payments

Baroness Sharples Excerpts

Tuesday 2nd February 2016 Lords Chamber

[The Earl of Courtown]

My Lords, the noble Lord is quite right in what he says about late payment to SMEs. From my own experience in that area, having jointly run an SME, I know how difficult it is for a profitable and competitive SME if you get late payment from your customers and have to pay early to your suppliers. I should also make the noble Lord aware that the Government are taking significant steps to tackle late payment. In addition to the measures I have already outlined, we have strengthened the Prompt Payment Code to promote 30-day payment terms as a norm. The code will also enforce maximum 60-day payment terms for all signatories. At the moment, there are over 1,700 signatories to the Prompt Payment Code, many of which are some of our largest companies.

[Baroness Sharples (Con)]

Will the Minister tell us whether all government departments are paying their debts on time?

[The Earl of Courtown]

My Lords, as far as the public sector prompt payment measures are concerned—to pay 80% of undisputed invoices within five days and all within 30 days—my department, BIS, exceeded this target and paid 99.5% of its invoices on time in 2014-15.