Small and Medium-sized Enterprises

Lord Borrie Excerpts

Tuesday 23rd October 2012 Lords Chamber

[Lord Wallace of Saltaire]

Thank you. It is an aspiration of this Government to increase the proportion of government contracts which go to small and medium-sized enterprises. When we entered government, the proportion of government contracts going to SMEs was 6.5%. Our aspiration is to reach 25% by 2015. The latest figures we have are that we are almost at 10.5%, so we have some way to go but are going in the right direction.

[Lord Borrie]

The Minister has confined his answers so far to government or governmental bodies which owe debts to small and medium-sized firms. What about simply the failure of large firms to pay small firms the money they owe them? So far, it is left to the initiative of the SMEs. Since there is a significant Bill going through Parliament at the moment dealing with financial services, I wonder whether one might get more results if the public officials of those bodies that are to take over from the Financial Services Authority under the new Financial Services Bill had a responsibility to ensure that debts were paid.

[Lord Wallace of Saltaire]

My Lords, the Government are not yet convinced that we need to take legislative action, but we are thoroughly in favour of all pressure possible to encourage large corporations to pay their small contractors as fast as possible. There is indeed a new booklet produced by the Association of Chartered Certified Accountants, Experian, the Forum of Private Business and the Institute of Credit Management which is a guide on how to ensure prompt payment and has been produced in co-operation with the Government. I must say that a number of newspapers, including in particular the Telegraph, have been very helpful in exposing the tendency of some large corporations deliberately to delay payment to their subcontractors. We all know that transparency and reputational damage are things which multinational companies are well aware of, supermarkets included.