HC Deb 24 July 1986 vol 102 cc782-92 4.30 am
Mr. Richard Ottaway (Nottingham, North)

Like most things in life there is some good news and some bad. The good news is that we are able to have this debate. The bad news is that it is taking place at half past four in the morning.

I wish to congratulate my hon. Friend the Parliamentary Under-Secretary of State for Employment on his efforts in producing the booklet "Payment on time, Guidance for Suppliers and Buyers". I also congratulate him on the fact that the booklet has received the endorsement of the Association of British Chambers of Commerce, the Institute of Directors, the Confederation of British Industry and the Institute of Purchasing and Supply. It is a well-written booklet and, indeed, I have no criticism of the booklet except that it does not go far enough. The Minister and I have had differences of opinion on this matter in the past, but I do not, in any sense, criticise his efforts. I simply believe that more can be done.

The guide formally recognises, for the first time, what many of us have identified as a growing problem—that people are not paying their bills on time. This problem was recognised long before the Minister or myself studied it. In 1978, the Law Commission report on interest identified the problem of the bad payer who uses the system to his personal advantage. The commission concluded that: The existing laws do not provide adequate means of redress for the creditor who is kept out of his money by his debtor The Law Commission responded, as did my hon. Friend the Minister this summer, to the cries of business men who complained about their cash flows and the difficulty they have in getting bills paid.

When I visit business men in Nottingham I am repeatedly told that their order books are full but that they are crippled by their cash flow because they cannot get their debtors to pay. A recent survey in the east midlands asked firms to state the four factors which most limited their business prospects. Top of the list was interest rates, and cash flow was second. Coupled with this increasing problem is the growing craftiness in delaying payment.

The best excuses that firms come up with concern the electronics industry. They state that the bill is in the computer and that they cannot get it out. Another excuse is that such bills are dealt with only at the end of the month. I know one well-known advertising agency which deliberately has its account section in the west country — 100 miles out of London, where the head office is located. People who are pressing for payment are bounced from one office to the other in a deliberate policy to slow up the payment of the bills.

It is an attractive proposition for anyone to delay the payment of debts for as long as he can get away with it. Money can be made by the large institutions in the short term. We know the nature of the overnight market. Many large firms now employ financial consultants who will advise on how best to capitalise upon short-term money. I do not criticise the firms for making a profit, but the smaller business man, who is waiting for his money is deprived as a result of this activity.

Such situations illustrate the limitation of the guideline. I contemplated saying weakness, but that is unfair. There is nothing wrong with the principles set out in the guideline, except possibly that there is not a recommended period for payment. It does not suggest that payment should be made in 30, 45 or 60 days, for example. I shall be interested to know whether my hon. Friend has any comment to make about that.

The choice which a business man is faced with at the end of the month as a result of the booklet is simple. If he has a pile of bills in front of him and he has the choice of paying them or responding to the recommendations in the guidelines, and he is a bit tight for cash, I have no doubt that he would receive a pat on the head from my hon. Friend if he complied with the recommendations in the guidelines. But I have no doubt that his head would rule his heart and he would delay payment of the bills if that helped his cash flow.

The parties can protect themselves by including in the terms and conditions of the business provisos that payment shall be made of the sum due and that interest shall accrue if the sum is not paid. That is a sensible precaution which I recommend to anyone. The problem is that not many parties enter into contractual terms of that sort. A CBI survey showed that only 19 per cent. of contracting parties had terms relating to payment and the accrual of interest. There are many who do business with one another who have no contractual terms and operate upon oral agreements. That is frequently the position with professionals and consumers who contract with a business man.

It is my strong belief that legislation should be introduced to sit alongside the guidelines. The only practical legislation is that which provides that interest is payable on the late payment of a debt. It no doubt comes as a surprise to the House to find that that is not the present position. The law provides for the payment of interest in certain circumstances and there are two pieces of legislation that apply that can best be summarised by saying that someone is entitled to interest on the late payment of a debt if he issues a writ before he is paid, a procedure that is hardly likely to lubricate the wheels of industry. It is not helpful to have to issue a writ at the same time as sending out an invoice.

I suggest that the legislation that should sit alongside the voluntary code is that which would give a party the right to sue for interest after payment has been made. Let us suppose that someone has been waiting for £50,000 for three months. At present interest rates, he would be entitled to just over £1,500. I am sure that such a provision would expedite payment.

There are advantages in such a procedure. First, a party can wait until he has been paid before deciding whether he wants to commence proceedings. For various reasons that relate to his contractual relationship with the other party, he may not want to commence legal proceedings. My proposal would give him the option of exercising his entitlement or forgoing it. More draconian measures are found in other European countries such as Denmark, where 2 per cent. a month is added to a bill if there is late payment. That is the result of legislation.

If a party waits until after he has been paid before deciding whether to sue, he is able fully to assess the period over which he has been deprived of his money before commencing proceedings. That is something that he is not able to do under present legislation.

The best reason of all for this proposal is that if someone wants to recover interest on a sum which has been due to him for some time he has, under present legislation, to issue a writ to recover the sum. It is necessary to issue the writ in the sum that is due, and £50,000 plus interest would put the claimant into the High court, with the attendant cost of starting proceedings in that jurisdiction. There would be the additional cost of instructing solicitors.

On the other hand, a claim for interest of £1,500 would fall within the jurisdiction of the county court. In my experience, the county court is one of the easiest organisations with which to deal. A phone call to the county court will lead to a form being sent by post. The payment of £6—I believe that that is the current figure —will ensure that proceedings are started, and in due course judgment will be obtained. There are no lawyers and everything is simple. It is a cheap system to operate. My hon. Friend will rightly tell us that he has a lot of support for the voluntary guidelines that he has produced. At Question Time on Tuesday, I think he said that 130,000 copies have been requested and there are more in the pipeline. I congratulate him on stimulating such interest.

A survey was carried out by the Forum of Private Business in Cheshire. I should be surprised if my hon. Friend did not know about that institution, because its latest publication has no fewer than two photographs of him in it. It considered the topic that I have raised tonight. As is the forum's technique, it conducted a referendum among its members on what they thought of the voluntary code and what they thought of my proposals for legislation.

Opinion on the voluntary code was evenly divided with 44 per cent. in favour of it, 44 per cent. against it, and 12 per cent. having no opinion. However, on the question of establishing a legal, enforceable right to interest on late payment of debts, along the lines of my proposals, no fewer than 77 per cent. were in favour, 17 per cent. were against, and only 6 per cent. had no opinion. That demonstrates that there is a great deal of support for the proposal among representatives of the forum.

I know that my hon. Friend is slightly resistant to the introduction of legislation. However, he is getting on to slightly tricky ground in his resistance. While the Department of Employment may be promoting that line, there is a classic case going on of the right hand not knowing what the left hand is doing. As from 1 October this year, Customs and Excise will, by legislation, be empowered to impose statutory penalties of the nature of interest, increasing from 5 per cent. to as much as 30 per cent., for businesses that are late in paying their VAT.

Dr. John Marek (Wrexham)

Quite right.

Mr. Ottaway

I am glad to hear that. The Government have resisted the introduction of mandatory interest on the late payment of debts. Yet the Treasury is doing just that. The Treasury does not hide its light under a bushel. Customs and Excise put out a press release claiming that the measure will reduce the outstanding VAT debt from £1 billion to £¼ billion, which is an admirable objective.

That rather establishes the point I am trying to make, that up until now the principle of voluntary guidelines has not resulted in the payment of bills. However, by introducing statutory rights to interest, the Treasury is confident that there will be a reduction of 75 per cent. in the level of outstanding indebtedness. That is a classic example of the pot calling the kettle black. It is said that this action could be "hazardous". The Labour party in Government in the 1960s, introduced little-used legislation which became the Uniform Laws on International Sales Act. That legislation provides for the mandatory use of interest on late payment of bills when there is a breach of contract.

It is not just me and a number of business men who are calling for the introduction of legislation. In 1978, the Law Commission recommended that the introduction of statutory interest is appropriate and necessary. It also rightly pointed out that, with the exception of Ireland, it would have the support of every country in Europe. I mentioned Denmark earlier. The list even includes Scotland in certain circumstances. It would be useful if the House could be told why it is hazardous to have legislation for statutory interest in England but not in Scotland. I look forward to having our fears allayed in that respect.

I have always been rather impressed by the quotation on the top of the notepaper of the Association of Bankrupts which states: If you lived in the richest, most powerful city it was possible for a man to imagine, that there was no love there, no mercy and no justice for those who met with misfortune, then you would be better off dead than to live in such a place. It is with that saying in mind that the attitude of large business organisations is to be treated with some scepticism. During the couple of years in which I have analysed the subject, I have spoken to hundreds of business men. Very few were opposed to my proposals. Every time I came up against big business organisations, such as the Confederation of British Industry, I was conscious of the division in their ranks and the way in which power is manipulated within the organisation.

I first took up my proposals with the smaller firms council of the CBI, which was dramatically enthusiastic about my proposals and said that they did not go far enough. It said that an absolute statutory right to interest with no discretions should be introduced. As my hon. Friend the Under-Secretary of State—the hon. Member for Rossendale and Darwen (Mr. Trippier) — will remember, we both spoke at a conference of the small business council. Afterwards, I found complete support for my proposal. Despite that, the full council of the CBI has never endorsed this proposal. I understand that it still objects and that the big firms which dominate the CBI are resisting this legislation.

The other day I had the chance to have an informal meeting with a leading manufacturer's group which confessed that it was motivated purely out of self-interest on this matter and that it resisted my proposal — the statutory right to interest of some sort or another —because it would cause problems which the group wanted to avoid. Cash flow was the manufacturers' problem. That is the very problem with which we are trying to cope.

In a recent radio broadcast, my hon. Friend the Under-Secretary of State said that he resisted the prospect of immediate legislation on the ground that listeners would be amazed at the number of small firms organisations which had asked him not to introduce such legislation. I raised that point with my hon. Friend and he kindly replied to me in a letter which I received this afternoon. In it, he said that, as a result of the doubts which I had raised, he had asked his officials to take up the matter with some of the small firms organisations when they next met them to raise that point specifically. I am grateful to my hon. Friend for his reply. I hope that he will go beyond the sort of front shown by the CBI and will meet the small business men who support the reform of private business and call for this proposal.

I am heartened by the bald statement of my hon. Friend the Under-Secretary of State that he will consider introducing legislation if it can be shown that the voluntary code is not working. While considering the prospect of legislation, it is important to monitor the success of voluntary codes. I should be grateful to my hon. Friend if he will say how he intends to do that and for how long. If his response is that he intends to listen to the small business organisations I hope that he will take on board the findings of a recent CBI survey. Forty-four per cent. of those asked said that, if there was a right to interest, they would use it, but, most significantly of all, 85 per cent. said that, if there was a right to interest, they thought that their customers would pay more promptly. I think that that justifies the introduction of some form of legislation.

I do not knock the voluntary guidelines. They are a step in the right direction. My hon. Friend the Under-Secretary of State and I are thinking along the same lines on this issue. However, I genuinely believe that the issue of late payment of bills should be taken a step further and that legislation should be introduced as soon as possible.

Mr. Greg Knight (Derby, North)

This is my second bite at the cherry this evening, Mr. Deputy Speaker—

Mr. Deputy Speaker (Mr. Harold Walker)

Order. I was not aware that the hon. Member had already taken part in the debate. He cannot speak again. Mr. Trippier.

4.47 am
The Parliamentary Under-Secretary of State for Employment (Mr. David Trippier)

I am grateful, Mr. Deputy Speaker—

Mr. Knight

On a point of order, Mr. Deputy Speaker. I spoke on an earlier motion on the Order Paper—

Mr. Deputy Speaker

Order. There is only one motion before the House, despite the fact that there are several debates. Under Standing Orders, the hon. Member may speak only once in the Adjournment debate.

Mr. Knight

I am not in any way seeking to challenge your ruling, Mr. Deputy Speaker, but I thought that, with the leave of the presenter of this topic, it would be in order for me to speak.

Mr. Deputy Speaker

I have just explained that, under our Standing Orders, the hon. Member may contribute to this debate once. The debate is on the motion to adjourn the House.

Mr. Trippier

I have listened with great interest to the views expressed by my hon. Friend the Member for Nottingham, North (Mr. Ottaway) on the difficulties created for small firms by the practice of late payment of their bills. I congratulate my hon. Friend on securing this debate. I am grateful to him for the kind things he has said about me and the document which I issued recently, "Payment on Time". I pay warm tribute to him for his able and vociferous advocacy on behalf of small businesses, especially on this problem. My hon. Friend is right to suggest to the House that there is not much that divides us. I hope to try to develop my case during my speech. I think that I may surprise him by saying that when I first considered this matter, shortly after becoming the Minister responsible for small firms, there was no one who wanted to introduce legislation on this matter more than me.

I have held the position of Minister responsible for small firms for just over three years now. During that time this subject has occupied my mind more than most, not least because of the heavy mailbag I have received. I happen to think that it is perhaps one of the most important issues currently affecting the small business sector. It is also one of the most difficult nuts there is to crack. I am certainly not labouring under any illusions as to the extent of the task involved in helping to bring about an improvement in commercial payment practice. However, the correspondence I have received during this period and the discussions I have had with small firms and their representative organisations has given me an excellent opportunity to evaluate the extent and different aspects of what is by no means a simple and straightforward issue.

While raising finance for fixed and working capital requirements, it is vital to businesses of all sizes that they should receive prompt payment for outstanding bills. It is no less important to many businesses, particularly in the small firms sector. They inevitably have a much more critical cash flow situation than their larger counterparts and therefore rely heavily on on timely payment. Late payment and bad debts do not simply inhibit growth and development. Their firm control is fundamental to a company's very survival. The severe problems that they create for a small firm's cash flow is exacerbated if it has to fall back on the bank manager and resort to increased borrowing to help it through its cash flow difficulties. The small business man knows only too well that that sort of situation cannot go on indefinitely.

The problem becomes compounded even further when the small businessman, who often has to wear a number of different hats in any case, takes on the additional role of debt collector. Chasing slow payers is a real drain on his time and resources, and those two commodities are usually in short supply at the best of times. To make the most profitable use of his time he needs to be left free to do the things he does best — selling the goods he produces or the service he provides and creating wealth and work.

It is important that we do not look at this problem simply as a large firm versus small firms issue. That is how I started to look at the problem. This is by no means the case. My hon. Friend is aware that the Confederation of British Industry recently carried out the survey among small firms that he referred to. The reason for that was to assess the extent and nature of the late payment problem. My hon. Friend did not develop that in great detail, but the results of the survey showed that for 54 per cent. it is large firms which are generally paying them late. However, 40 per cent. of respondents stated that other small firms are their main source of difficulty in that respect. I was surprised at that, as I am sure my hon. Friend probably was. That is an important point because there will obviously be delayed payment from small firms not paying other small firms on time, small firms not paying medium-sized firms on time and small firms not paying large firms on time.

As I develop my speech, I am anxious to make the point that I fear that if legislation along the lines suggested by my hon. Friend were to be introduced, there is a grave danger that the legislation would be used more by large firms against small firms than the other way round. My hon. Friend says, "So what". When I had my initial meeting with the Association of British Chambers of Commerce, the Institute of Directors and the CBI, there were a number of people who said that such legislation could mean that many thousands of small firms would be put out of business. That is the danger. It is not a question of saying, "So what?". I believe that it does not matter. I have no figures to show because it is hypothesis and conjecture. The figure I had thought of could reach 250,000. Is that a risk that my hon. Friend is prepared to take? That is the decision that someone in my position must take.

Mr. Ottaway

This is a circular argument. If small firms are to he put under pressure by large firms, they, too, have the right to use this legislation to enhance their cash flow. Just as large firms will press for prompt payment, so will small firms. It is simply a cash flow question. There may be a few teething problems but after some weeks when the cycle speeds up, both sides will be reconciled. There is legislation in every other country in Europe and the Treasury thinks that it is a good idea, so I am not convinced that this will not result in a massive number of bankruptcies, as my hon. Friend suggests.

Mr. Trippier

Earlier my hon. Friend referred to the late payment of VAT, and two thirds of individuals liable to pay VAT delay payment. That is a reason for introducing the new measure recommended by the Keith Committee report. In fairness, it must be said that those who will be penalised are given two opportunities for delayed payment before Customs and Excise will act. I am not saying that my hon. Friend is wrong, but there is a danger which is why the Government should not rule out the possibility of introducing legislation.

The Associaton of British Chambers of Commerce expressed the view that it could be hazardous to introduce legislation because it could work against the small firms we are seeking to encourage. My hon. Friend and I are completely at one on that point. I was particularly unnerved by other small firms' organisations, and I am happy to quote their precise position, which told me that they thought it was certainly hazardous and risky to follow that route without first seeing whether the suggested code of practice which I have introduced in the booklet "Payment on Time" would work.

My hon. Friend referred to the smaller firms council of the CBI, and I have in my possession a letter sent to my hon. Friend by Sonia Elkin, director of the CBI smaller firms council, shortly after he had the good fortune to raise his ten-minute Bill on the Floor of the House. It was spelt out to my hon. Friend that he was not quite right in what he had suggested to the House in that speech. The letter dated 17 April states: The CBI Smaller Firms Council, like the CBI as a whole, is not currently committed to any specific policy regarding the law on interest on overdue debts. Whilst it is true to say that in our initial consultations the SFC was inclined to favour some form of right at the discretion of the courts it has put its views on ice pending the outcome of our current detailed review of policy. I await that as much as my hon. Friend does.

Mr. Ottaway

My hon. Friend is referring to a letter which was written as a result of a misunderstanding by the CBI. Unforuntately, I do not have my files with me, but I have a letter from the CBI, saying that the smaller firms council endorses the proposal. I have since pointed that out to the CBI, but it has not even bothered to reply.

Mr. Trippier

I am sure that we can resolve this matter, perhaps outside the Chamber at some future date. Only the other evening I was in the company of the present and previous chairmen of the CBI smaller firms council and there is no doubt in my mind that that council is not unanimous on the matter by a long way. The last time that I attended that council, I was impressed to see that the majority of members attending were concerned as to whether legislation should be introduced.

Again trying to narrow the difference between my hon. Friend and myself, may I say that it is important that those people, especially members of the Forum of Private Business— Mr. Stan Mendham's organisation — should understand what they are being asked in the form of a survey. It is important that they understand that if we introduce legislation, they could suffer. My hon. Friend cannot deny that fact. I have no quarrel with the Forum of Private Business. As my hon. Friend said kindly, I enjoy a considerable amount of exposure from the forum, most of it favourable, and I have a great deal of time for Mr. Stan Mendham. Strangely, this is about the only issue in relation to small firms on which he has not consulted me. It is the only subject on which we have never had a discussion. Perhaps he more than anyone else would be interested to read the Hansard report of the debate.

My hon. Friend and I share an anxiety — this especially worries me — about large firms deliberately exploiting their market power to derive commercial advantage and gain extended credit from delaying payment of suppliers' bills, usually at the expense of smaller firms.

Mr. Knight

I agree with my hon. Friend's campaign. I know what he is trying to do and I support him. Can he assure the House that he will send a copy of his speech to the Rover Group? I have received numerous complaints from medium-sized companies in my constituency that, despite the fact that in its latest brochure the Rover Group says that it has a reputation to live up to, it does not pay its debts on time.

Mr. Trippier

I am grateful to my hon. Friend for that information. I have asked hon. Members on both sides of the House several times to let me have any information on overdue payments. I shall be happy to look into that matter for my hon. Friend. I shall write to the chairman of the company on his behalf and on behalf of his constituent firms, which are suffering as a result of delayed payment — if it can be proved that there is delayed payment. I must be careful in what I say about that.

The "late payment disease" is found in large and small firms, and in all sectors of industry and commerce. But the practice to which I referred before the intervention, where a payment can be delayed for about two or three months, is absolutely immoral. Although my hon. Friend and I accept that some small firms do not pay the bills of large firms on time, it would not make as much difference to the latter. However, the delay in payment from the large firms to the small firms can make all the difference between survival and failure. That is why I launched the booklet entitled, "Payment on Time."

The public sector, too, has come in for some criticism. I gain some comfort from the fact that only 5 per cent. of respondents to the CBI survey thought that central and local government bodies are their worst payers. I was pleasantly surprised to read that. I say "surprised", because many right hon. and hon. Members have asked about Departments or public bodies delaying payment to small firms in their constituencies. But 5 per cent. is relatively low. That does not suggest that I am complacent about it. Much more could be done, but I should point out to the House that Departments have instructions to pay on time. I use the opportunity again to say that if an hon. Member can give me an example of where a small firm in his constituency has not been paid on time by the Department, I shall undertake to look into it.

If I may turn to the means at our disposal to help eradicate the practice to which I referred, and which my hon. Friend the Member for Nottingham, North claims is the major problem, he says that the only effective and lasting solution would be to give creditors a right to interest on overdue debts. This would mean, as I understand it, that the courts would be given discretionary powers to award interest to creditors if their bills are paid late.

Mr. Ottaway

They have power.

Mr. Trippier

It is important for me to understand that and to get it absolutely clear.

Others call for statutory powers so that firms would have an automatic right to interest — that has been suggested to me also—where all late payers would be charged without exemption. When the Law Commission's report on interest was published in 1978, industry had an opportunity to comment on its recommendation that contract debts should, unless otherwise provided, carry interest at a fixed rate from the date on which payment of the debt became due. Small firms' organisations had serious reservations about the efficacy of this approach and took the opportunity to discuss late payment of bills with me. What is clear to me is that there is a wide range of opinion on the benefits or otherwise of legislation and at this stage there is no consensus on the desirability of pursuing this particular course of action. The serious reservations that were expressed some years ago still exist. Whatever route we take to tackle this problem, I have a responsibility to ensure that I respect the views of those who represent small businesses. I will see that the views of my hon. Friend the views of others continue to be fully taken into account.

The situation in other countries was referred to by my hon. Friend. I am always willing to learn from the experience of others, but, while legislation certainly appears to exist in a number of other countries, what is not clear is how effective it is in practice or as a deterrent to late payment; nor is it clear what part an unwritten code of commercial ethics plays in encouraging firms to pay promptly without the need for legislation or exhortation.

At present the provisions of the Administration of Justice Act 1982 mean that, if a debt is paid after the commencement of proceedings, it is possible to continue to sue for interest alone. I have to say that at the moment I remain to be convinced that further legislation is the best solution. My main fear is that in practical terms legislation may make little difference to a small firm's ability to obtain timely payment of outstanding accounts. Pursuing reluctant debtors through the courts could represent a considerable drain on a small firm's available time and resources — and debtors know this only too well. As I have already said, large firms would be more likely to want to pursue that line than small firms simply because they do have that kind of resource at their disposal. That has been the experience in other fields also.

There is also the danger that the prospect of legislation could give rise to large firms agreeing to new credit terms which could be particularly disadvantageous to small businesses. The introduction of legislation that my hon. Friend said we should encourage could result in a general move by those with market power, that is, the larger firms, towards standard buying terms of 90 days' credit. Supporters of legislation would respond by saying that payment of all bills within 30 days should be a statutory obligation as well. I am not happy that the Government should be interfering at all in these matters by telling firms how to do business with each other. Firms should be left free to use their commercial judgment and decide whether the terms on which business is offered are acceptable to them.

So there is the near certainty that legislation would encourage major firms to extend the credit terms on which they are willing to do business with small suppliers. Buyers could also show a more pedantic attention to detail in order to delay the presentation date of the invoice. Many other issues also arise, such as the choice of interest rate, the calculation and mechanics of charging it and whether exemptions would be permitted, particularly if the small supplier wished it. All in all, legislation could be a case of the cure being worse than the disease.

I assure my hon. Friend that I shall keep an open mind on legislation, despite its intrinsic drawbacks. But before we contemplate going down that coercive route, we must see what co-operation can achieve. I say that not because I am looking for a soft option —it would not be difficult to introduce a short piece of legislation on a discretionary right to interest—but because of the practical reasons to which I alluded earlier.

If we fail to change attitudes towards the payment of bills, legislation would be likely to bring about a potentially damaging reaction. If we succeed in our objective, it follows that further legislation would be redundant. The key to changing attitudes is to convince managing directors that in the long run it is not smart business practice for their finance directors to try to place the interest burden of work in progress on to suppliers.

If it were smart, why, for example, do large Japanese companies place such emphasis on developing their links with small suppliers, encouraging their development, assisting them to achieve the necessary quality of product, to understand the importance of prompt delivery, and advising them on the development of new, improved products to meet future needs?

We have had an interesting and wide-ranging debate on a subject with which, as I said at the outset, I wrestle on a weekly basis, and my mail bag remains large. My hon. Friend asked how we would monitor the position. I have not yet received replies from a number of chairmen of the top 100 companies to whom I wrote about the payment booklet. I have received replies from the vast majority of them and, in the main, the chairmen of those large companies have welcomed the introduction of the code and are anxious to ensure that their buying departments honour what is suggested in it. I shall publish at a later stage details of what the larger companies are doing on this issue. I give my hon. Friend that assurance.

As an indication of the inreasing awareness of the matter, I have recently authorised the re-printing of the booklet. My hon. Friend rightly said that 130,000 copies had been distributed. Many more will now have to be printed and I welcome the fact that small as well as large firms want to receive it.

There is in the booklet advice and guidance on how to set up a proper contract. It explains the need to set out in the early stages of the document how payment is to be made. My hon. Friend will not be shocked to hear that some firms which have undertaken contracts for larger firms, not knowing that those large companies may not be good payers, should perhaps not have taken on that work. It could in certain circumstances put small firms against the wall.

I am sure that the debate will go on outside the House. I am glad that my hon. Friend and I have had an opportunity to make a contribution to it. I hope that our remarks have helped to clear the air, have helped to inform the forum of private business and have shown that there is an alternative point of view. I congratulate my hon. Friend on having secured the debate and I welcome the opportunity that I have had to reply to it.