Small Business Commissioner: Late Payments

Earl of Clancarty Excerpts

Tuesday 7th December 2021 Lords Chamber

[Lord Callanan (Con)]

These things are all extremely important. I do not know whether there are any specific provisions in trade agreements on prompt payment, but I shall certainly have a look and write to the noble Lord about it.

[The Earl of Clancarty (CB)]

My Lords, does the Minister agree that the key problem for many freelancers, including creative professionals, is that they are caught between what sometimes feels like an ingrained culture of late payment and not being able to challenge for fear of losing work? Ultimately, we need a system that automatically penalises late payers without the aggrieved party having to raise its hand.

[Lord Callanan (Con)]

The noble Earl makes a good point. I remind him that UK legislation already establishes a 60-day maximum payment term for contracts for the supply of goods and services between businesses, although those terms can be varied if they are not grossly unfair to the supplier. We also have the prompt payment code. We have received more than 50,000 reports from businesses that they are abiding by the prompt payment code, but there is always more to do on this.