Small Business Commissioner: Late Payments

Lord Cunningham of Felling Excerpts

Tuesday 7th December 2021 Lords Chamber

[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.

[Lord Cunningham of Felling (Lab)]

My Lords, I have been in Parliament for a long time—perhaps people would say for too long. For all that time, late payment has been a problem under Governments of both major parties and the coalition Government. Why is it such an elusive problem? Why is it so difficult to find a solution to what is damaging to small and medium-sized businesses?

[Lord Callanan (Con)]

I would never say that the noble Lord has been in Parliament too long. We need more representatives from the north-east in Parliament, for as long as possible—says he in a self-congratulatory way. The noble Lord is right. It is a difficult and complicated problem which Governments of all persuasions have grappled with. It is different in different industries, with different suppliers for small businesses and large businesses, but there was a commitment in the Conservative manifesto to crack down on late payment. That is why we launched the consultation. We are currently working through the responses. We will need primary legislation to implement it. The noble Lord will know, from his time in government, how tricky it is to work through those problems.