Small and Medium-sized Enterprises: Late Payments

Lord Stevenson of Balmacara Excerpts

Thursday 19th June 2014 Lords Chamber

[Viscount Younger of Leckie]

The noble Lord raises an important point. This is very much a question for the companies and the contracts that they enter into. The Government can certainly produce a framework and, indeed, from the UK angle, the small business Bill will take matters forward to give greater clarity and transparency.

[Lord Stevenson of Balmacara (Lab)]

My Lords, in August last year the Daily Telegraph reported that Vince Cable was considering a late payment levy. In October it reported that Michael Fallon was “going to war” on the issue in the context of a report that outstanding bills to small businesses had reached a record £37 billion. The Minister mentioned the small business Bill but was a bit light on detail. Why does it not include a late payment levy? Further, why does it not consider representations made from this side, including banning bad payers receiving public sector contracts?

[Viscount Younger of Leckie]

I have already commented that we do not think that it is right to legislate on that at the moment. However, we are taking a number of important actions, including incentivising fair and transparent payment practices by requiring large companies to report, which I have mentioned, strengthening the Prompt Payment Code, working with industry to establish codes of best practice on fair payment, making further reforms to increase prompt payment in the public sector and increasing access to alternative finance options.