HC Deb 20 July 1994 vol 247 cc312-3
14. Mr. Bill Michie

To ask the President of the Board of Trade if he will estimate the amount of money owed by his Department to suppliers in 1992 and 1993 which remained unpaid after 30 days from the presentation of invoices.

Mr. Neil Hamilton

The information in the form requested by the hon. Gentleman could be made available only at disproportionate cost. However, the Department's annual surveys of its payment performance showed that in 1991–92, 80 per cent. of invoices were paid either within 30 days or within the agreed credit period. The corresponding figures for 1992–93 and 1993–94 were 90.5 and 90 per cent. respectively.

Mr. Michie

Talking about disproportionate cost, what about the firms that are struggling because they have not been paid? Why does not the President of the Board of Trade ensure that his Department pays its bills promptly or within 30 days instead of setting a bad example to other firms which are also dragging their feet paying suppliers? Is not this just another case of, "Physician, heal thyself"?

Mr. Hamilton

I have just told the hon. Gentleman that there has been a substantial improvement—from 80 to 90 per cent.—in the Department's practice in paying its bills within 30 days or according to the period set out in the contract. We hope to do better still, but the hon. Gentleman should recognise that there is not unanimity, even in the small business sector, about the argument for making compulsory the payment of debts within 30 days or any other period because many people fear that such legislation could be used by big companies against small companies.

Mr. Forman

While the figures that my hon. Friend has just given clearly show the good example being set by his Department, which is very important, does he agree that options are open to firms of all sizes—for example, the granting of discounts for cash—that encourage prompt payment, and we do not necessarily have to have recourse to unwieldy law?

Mr. Hamilton

As the Minister with responsibility for deregulation, I entirely agree with my hon. Friend that there may be market solutions to the problem that are better than centralised regulation. I am grateful to him for the interest that he takes in this matter and for his useful suggestions.

Mr. Purchase

Would not the President of the Board of Trade be doing British industry in general a service if he were to encourage all Government Departments to meet their responsibility to make early payment right across the place? I am sure that he recognises that cash management problems, especially in small businesses, are extremely acute at the moment and likely to continue to be so. Therefore, will he have a word with colleagues in other Departments and ensure an evenness of policy?

Mr. Hamilton

There have been two questions implying that I am now the President of the Board of Trade —I am afraid that I have not seen the most recent news on television.

Of course the DTI is concerned to ensure that the payment practice of all UK companies and organisations that have to pay bills is improved. That is certainly the best practice that we should like to see, but whether it is best achieved by imposing regulation is very questionable. As I said a moment ago, there is by no means unanimity, even among small firms and their representative organisations, about the way forward. We believe that the package of measures outlined in the White Paper on competitiveness will be a useful step forward. We will keep it under review and we have said that in two years we shall examine how things have gone and if we are required to do more, there is no doubt that we shall do it.