Small Businesses: Late Payment

Lord Palmer of Childs Hill Excerpts

Thursday 11th June 2015 Lords Chamber

[Baroness Neville-Rolfe]

My Lords, in the public sector there are clear rules. Payment has to be made within 30 days, so in the BIS department, which I can speak for, 99.5% of invoices are paid within 30 days, and 80% within five days. We have been trying to move to a five-day practice across government. In addition, interest is payable on late payments and administrative costs. It would probably be difficult to confirm that every small business is always paid on time, but we do what we can, the direction of travel is clear and we are leading from the front in the public sector.

[Lord Palmer of Childs Hill (LD)]

My Lords, while I welcome the actions of the noble Baroness and the Government, the mistreatment of small firms goes much wider than late payment. As an example, there is a new practice in some large firms requiring small firms to pay an upfront, flat fee to be considered for further contracts, which puts great stress on small firms. Can the Government include that in their deliberations?

[Baroness Neville-Rolfe]

My Lords, we can. The small business conciliation service is designed to help small businesses resolve business-to-business disputes while avoiding expensive legal costs. We will consult shortly on what exactly should be done to make sure that the new service has a real impact on the ground.