Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, if he will make an assessment of the potential merits of bringing forward legislative proposals to require large companies to pay smaller firms on time.

The Government is committed to delivering on our manifesto commitment to clamp down on late payment and strengthen the powers of the Small Business Commissioner (SBC) to support small businesses who are least able to cover financial shortfalls and find temporary finance more difficult and more expensive to obtain.

Legislation already exists under the Late Payment of Commercial Debts (Interest) Act 1998, which sets out that payment terms between two businesses should not exceed 60 days, unless they are fair to both parties.

Suppliers can also claim statutory interest, and debt recovery costs, on invoices not paid within the agreed period or (if no period is agreed) within 30 days. It also establishes maximum 30 day payment terms for transactions with public authorities.

We will shortly be consulting on the merits of extending the powers of the Office of the Small Business Commissioner to intervene and advocate for small businesses, with less than 50 employees, in payment disputes with a larger business (50 or more employees).