Late Payers (Hansard, 16 December 1993)

§ 1. Dr. Goodson-Wickes
To ask the Chancellor of the Exchequer what representations he has received on his proposals to remedy the practice of late payment to suppliers.

§ The Economic Secretary to the Treasury (Mr. Anthony Nelson)
My right hon. and learned Friend the Chancellor of the Exchequer has received a number of letters supporting the Budget announcement of consultation on measures to promote prompt payment. Responses to the consultation paper, which should be addressed to the Department of Trade and Industry, should reach that Department by 31 March 1994.

Hon. Members
We cannot hear.

§ Madam Speaker
Order. I have already given instructions that the microphones should be switched on. Perhaps we can proceed as it is being taken care of.

§ Dr. Goodson-Wickes
Hon. Members on both sides of the House tell of small businesses in their constituencies whose survival has been put at risk by late payments from large companies. Will my hon. Friend investigate allegations that such practices are condoned or even encouraged by managements of certain companies? Does he agree that that is another example of the unacceptable face of capitalism which threatens the survival of small businesses, the growth of which the Government have done so much to encourage?

§ Mr. Nelson
My hon. Friend's complaint is clearly echoed in many of the representations that hon. Members on both sides of the House have received. The Government deplore big companies taking advantage of small companies by the wilful late payment of bills. Many of those small companies have to pay in cash or in advance when big companies can delay payment. That is exactly why my right hon. and learned Friend has produced the consultation paper and I hope that it will be well received.

§ Mr. William Ross
Surely the best way to bring the big companies to their senses is to make them pay interest on the bills that they owe? Would not it help companies of all sizes if interest rates generally were reduced?

§ Mr. Nelson
That is indeed one of the proposals that are being mooted in the Government's consultative paper. Clearly, there are problems with legislation, in that it interrupts the contractual arrangements between companies. My right hon. and learned Friend in putting forward the proposals, clearly believes that there is an endemic problem, which is not just a reflection of the period of high interest rates, but has become a matter of culture in business payments. It needs to be dealt with and we look forward to the response to the paper.