Small Businesses: Late Payments

Lord Harrison Excerpts

Wednesday 28th October 2015 Lords Chamber

Asked by

[Lord Harrison]

To ask Her Majesty’s Government what has been the outcome of their consultation about giving bodies representing small businesses wider powers to challenge unfair payment practices, and what progress has been made in improving small businesses’ access to short-term finance to mitigate the late payment of debts owing to them.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills and Department for Culture, Media and Sport (Baroness Neville-Rolfe) (Con)]

My Lords, our consultations on proposals to give representative bodies wider powers to challenge grossly unfair payment practices closes on 27 November. It is a part of a package of measures to tackle late payment. We will also improve small businesses’ access to short-term finance and will soon lay regulations to nullify bans on invoice assignment. This is a new measure to enhance small businesses’ access to working capital.

[Lord Harrison (Lab)]

My Lords, given that according to the British Chambers of Commerce the new small business commissioner will only marginally help small businesses, which are deprived of £55 billion at any one time because of late payment by big businesses and government, and given that this commissioner will anyway be absented from answering disputes in the construction industry, where this problem is at its most intense, will the Government finally respond to the Federation of Small Businesses’ request for an in-depth inquiry into late payment on commercial debt or will this Government remain all talk-talk and no action?

[Baroness Neville-Rolfe]

My Lords, we are full of action. If the noble Lord comes to the Moses Room this afternoon, he will find that we are discussing the Small Business Commissioner and the question he mentioned about payments in the construction industry.

--- Later in debate ---

[Baroness Neville-Rolfe]

My Lords, I look forward to talking to the noble Lord about that idea.

[Lord Harrison]

Can the Minister not understand, further to the point made by the noble Lord, Lord Elton, that small businesses, especially if they are suppliers, are in fear of losing those they supply if they insist upon being paid on time?

[Baroness Neville-Rolfe]

My Lords, that is indeed the problem, which is why we are establishing a Small Business Commissioner who can help them and change the culture, and bringing in payment transparency which will show the payment track record of bigger companies. Not everything is bad. Some practice is good. Some companies pay small businesses quickly because they understand their brilliant contribution to the economy and to innovation.