§ Order for Second Reading read.
2.27 pm§ Mr. Jon Owen Jones (Cardiff, Central)I beg to move, That the Bill be now read a Second time.
It is not a question of never getting their money, but the time it takes to receive it".That is the definition, coined by a leading firm of accountants, of one of the largest problems that United Kingdom companies face. The problem is, of course, late payment, which my Bill attempts to address.I want to get it straight from the start that the Bill is not about bad debts—payments that, for one reason or another, will never be made—but about poor credit management or, more often, cynical and wilful delaying tactics in settling accounts to obtain free credit facilities from weaker suppliers.
I claim to be proposing not a panacea for British businesses, but a measure that would have made a tangible difference to the 5,000 firms that went under last year due to late payment.
If the House wants an example of the problem, it need look no further than the Deputy Prime Minister who, earlier this month, was only too happy to boast about his skill at "stringing along creditors" with such sharp practices as omitting second signatures from cheques, ensuring that the words and figures on cheques did not match or simply waiting until the writ arrived. His defence—that everyone got paid in the end—may satisfy his conscience, but his inability to gasp the seriousness of his actions goes to the heart of the issue.
I repeat my opening line:
It is not a question of never getting their money, but the time it takes to receive it".The result of the cynical manipulation of trade credit can be devastating for some firms. In extreme cases, they can be put out of business. More usually, the effect is to restrict business expansion, so destroying potential jobs, destabilising the marketplace and holding back national economic growth.An excellent example of the measurable effect of late payment was given in a recent article by Paul Linford in Cardiff's local newspaper, the South Wales Echo. He cites the case of a do-it-yourself supply firm that was owed £90,000 in late payments, £50,000 of which was overdue two months. The firm had to invest about 30 hours a week solely to chase those late payments—nearly one person's entire working week. That was a waste of time and the money could have been devoted instead to the company's growth and development.
§ It being half-past Two o'clock, the debate stood adjourned.
§ Bill to be read a Second time upon Friday next.