Small Business, Enterprise and Employment Bill

Lord Mendelsohn Excerpts

Tuesday 17th March 2015 Lords Chamber

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

My Lords, I thank the noble Lord, Lord Mendelsohn, for his diligent scrutiny of the late payment provisions in the Bill. We covered a wide range of areas during the debates. I hope noble Lords are now certain of the Government’s unwavering commitment to tackle late payment and are satisfied with the way that I have tried to address the concerns raised. We are all united in the belief that suppliers should be fairly compensated when they suffer from late payment. I was persuaded by the noble Lord’s arguments and made a commitment to bring forward amendments to specify in the Bill how we intend to use the reporting power in relation to payment performance and interest owed and paid. These amendments deliver on that commitment.

Amendment 1 inserts a reference to “performance” in the Bill. This amendment makes clear that payment performance is a vital component of the new mandatory reporting requirement and that we are committed to include it in regulations. Greater transparency will bring to the fore poor payment performance. Amendments 2 and 3 make express reference to late payment interest as an example of the type of information that may be included in the new reporting requirement. We are committed to using this power in the Bill to require companies to report on the amount of interest owed or paid because of late payment. This new reporting requirement will bring increased transparency to payment performance.

Together with the wider package of measures we are driving forward—to improve public sector prompt payment and strengthen the Prompt Payment Code—this will encourage a change in corporate behaviour. For far too long, large companies in the UK have used their economic power to make gains at supplier expense. The commitment I have made today will help to ensure that suppliers are fairly compensated. I hope noble Lords will feel able to support these amendments. I beg to move.

[Lord Mendelsohn (Lab)]

My Lords, I thank the Minister for introducing these amendments and for her unfailing courtesy throughout the passage of the Bill. We share a deep concern that the scope of late payments and poor payment practices is not only unfair, unjust and damaging to small businesses but is a brake on the entire economic potential of our country. With the sum outstanding approaching £60 billion, the Bill is an important step in trying not just to stop it rising any further but to create the ability to reverse that number as strongly and rapidly as we can.

While we favour additional measures—some of which could be considered in secondary legislation—we are grateful to the Government for recognising the need to add strength to their approach by ensuring that the payment report goes beyond intentions and reports on actual performance. In addition, the interest figure in payments highlights existing late payment legislation. These measures have our strong support and we are grateful to the Minister and the Government for listening and for their positive response and detailed scrutiny of our suggestions.

It may be for the convenience of the House for me to thank the Minister for the letter she sent to my noble friend Lord Stevenson and myself helping to tidy up some of the points of contention raised on Report relating to the co-protections when a pub is sold, the role of the adjudicator in these matters, investment by pub companies and the market rent only option, and the consultation on the code itself and on secondary legislation. We are very grateful for what the Minister has written and believe that it resolves almost all of the outstanding issues at this stage. Again, we offer our strong support for that.

We have good reason to be very proud and supportive of small businesses. One has only to look at the annual reports on European SMEs, published by the European Commission, to know how strong we could be with more focused public policy support. Let us hope that this Bill is a strong step in the way forward in dealing with late payments and prompt payments and ensuring that our small businesses take full advantage of the position that they are in. They are, of course, the backbone of our economy.