(5 years, 1 month ago)
Commons ChamberThe implementation of strong customer authentication, which mandates two-factor authentication for some online payments, will introduce more secure payments for individuals and businesses. That was introduced by the second payment services directive. The Treasury published an impact assessment on the implementation of that EU directive in 2017.
I am staggered that the Government are not doing more about this ticking timebomb for online retail, which is on track to cause major disruption. The British Retail Consortium estimates that 75% of retailers are unaware that it is coming into effect in September. It is the same for consumers. The implementation is forecast to lead to the failure of nearly a third of e-commerce transactions from September, due to poor access to a proper phone signal or wi-fi. Will the Minister ensure that no enforcement action will be taken for at least 18 months, to give our retail sector breathing space to adapt to the new rules?
I point out that there was £309 million-worth of fraud in e-commerce in 2016 versus £13.6 million in 1998. The hon. Gentleman will know that the European Banking Authority published an opinion on readiness for implementation and the Financial Conduct Authority published a statement in June. They are working on mitigations past the September implementation date. They are working with industry and providers to make sure that the essence of the changes prevail, which is to make it safer for merchants and consumers.
(5 years, 2 months ago)
Commons ChamberI thank the right hon. Gentleman for raising that. I highlight his particular interest in this area and the fact that he was one of the Ministers responsible in Northern Ireland when project bank accounts were introduced there. He is right that there are absolutely some merits in such accounts; as he knows, I have taken a particular interest in the subject and I will continue to work on it. The Government are clear that where project bank accounts can be used with Government contracts, they will be, although they are not always a suitable measure in some large contracts.
Today, I have announced a suite of tools to tackle late payments. Am I going to stand here and say that in future we will not have to do anything more? Of course not. Part of government and what we need to do in a changing economy and business environment is to make sure that we keep looking at ways to make things easier for small businesses.
I thank the Minister for advance sight of her statement. She talked about the challenges facing small businesses. Brexit, of course, will cause huge disruption to small businesses’ supply chains, given the added bureaucracy and tariffs.
This statement on late payments is welcome, but may I ask the Minister again the specific question put by the Chair of the Business, Energy and Industrial Strategy Committee, the hon. Member for Leeds West (Rachel Reeves)? Why not make the prompt payment code mandatory—compulsory for large businesses? Why is there is further delay with consultations and what have you? She should make it mandatory, as we have been arguing for.
I thank the hon. Gentleman for welcoming the statement and the moves that the Government have made today. He is absolutely right about the prompt payment code: it is voluntary. As it stands, there are more than 2,000 signatories to it; they sign up and commit to paying 90% of their invoices within 60 days. As he will know, the Government initiated the new duty on companies to report biannually on payment practices. To date, we have had more than 15,000 reports for over 7,000 companies. That data has enabled the Chartered Institute of Credit Management to scrutinise the voluntary code payment data.
We have seen action. Five businesses have been removed from the code and 12 have been suspended. As I have outlined today, when people are not complying with the legislation, we will take action. We are continuing to move forward to strengthen the prompt payment code and close any holes and weaknesses that there are.