HC Deb 22 July 1986 vol 102 cc171-2
8. Mr. Ottaway

asked the Paymaster General what response he has received to the guidance booklet on payment of bills published on 20 May.

Mr. Trippier

I have received a considerable volume of correspondence from public bodies, large and small firms and small business organisations welcoming this initiative. Many small businesses continue to emphasise the problems that late payment causes them.

Mr. Ottaway

My hon. Friend is on record as having said that if the voluntary code does not work he will introduce legislation, and some of us would like to see that sooner rather than later. How does he intend to monitor the success of the voluntary code, and for how long?

Mr. Trippier

I have one effective way of monitoring the success of the code, which is that 130,000 copies were printed and I have recently authorised the reprinting of it, so demand is considerable. I am sure that my hon. Friend would welcome that. I have said that we may have to consider legislation if the pilot scheme does not work, but that could be hazardous. Many people in various small firms organisations have made representations to me that on some occasions small firms do not pay the bills of other small firms on time and that sometimes small firms do not pay the bills of large firms on time. If legislation were introduced some small firms—[Interruption.]

Mr. Speaker

Order. I am trying to hear what is being

Mr. Skinner

Does the Minister recall that more than seven years ago the Government were elected on the basis of relieving small firms of all the difficulties which the Tories believed surrounded them? It is now seven years later and the Tory Government have hammered small businesses to such an extent that the Government must now give them advice on how to pay their bills What happened to the entrepreneurial society that was to produce all the wonderful profits with the help of the Government's policies? Would it not be nice for the 150,000 firms that have gone bankrupt during the past seven years to have even a letterbox through which to receive the code of conduct?

Mr. Trippier

That shows how much the hon. Gentleman is out of touch with what is going on in the small business community. The figures on the small firms front show a higher net increase in small businesses than has ever been recorded. We are involved in a code of practice for late payment of bills because we know that there is a cash problem when large firms delay the payment of bills to small firms.

Mr. Bellingham

While my hon. Friend is reluctant to introduce legislation at this stage, is he aware that many small firms feel strongly about the matter, and will he keep it under review? What extra pressures could be put on some of the biggest firms in the land, which pay bills only twice or three times a year?

Mr. Trippier

When I sent the code of practice to the 100 largest firms in the country—as my hon. Friend is suggesting, a number of them are guilty of delaying payments of bills — I found the response to be comforting. I am sure that the combination of the code of practice and the Finance Act 1982, which allows interest to be charged as long as the matter has been taken to court, will be effective.