HC Deb 05 March 1998 vol 307 cc1191-3
13. Dr. Starkey

What actions her Department proposes to take to help small businesses avoid cash-flow problems. [31141]

16. Mr. Singh

What estimate she has made of the damage caused to small businesses by the late payment of commercial debt. [31144]

Mrs. Roche

The Government are determined to ensure that small businesses benefit from the increased competitiveness that a healthy cash flow can bring. That is why we are bringing forward a comprehensive set of proposals to tackle that problem. We also recognise that small firms can maintain a healthy cash flow, and minimise their exposure to late payment and bad debts, by having effective credit management procedures in place.

Dr. Starkey

I thank my hon. Friend for that answer. May I pass on to her the appreciation that many businesses in my constituency have expressed of the variety of measures that she has been taking to support small businesses? Will she expand on the measures that are being taken on credit management and debt recovery, both of which are especially important for small businesses?

Mrs. Roche

My hon. Friend will remember that earlier, I spoke about the better payment practice group, which does very good work. That group is about to produce a free guide to credit management and debt recovery, which will be made available through the "Enterprise Zone" and in other ways. It will interest the House to know that we are also supporting the development of an NVQ in credit management, and asking business links and others to assist small firms with their credit management skills.

Mr. Singh

Given the problems faced by small firms in Bradford as a result of late payment, will my hon. Friend consider commissioning research into best practice and ensure that the results of that research are given to small businesses in my area and other areas?

Mrs. Roche

I can help my hon. Friend considerably. The Department is working with the credit management research group at the university of Bradford which, I believe, is in his constituency, to identify best practice, and to ensure that that information is disseminated to small firms, and to the better payment practice group. I know that the university's work is greatly appreciated, not only in my hon. Friend's constituency, but throughout the United Kingdom, and I know that its work will be very beneficial to the economy of the UK as a whole.

Mr. Evans

Does the Minister agree that it can be damaging to the cash flow of small businesses if money is diverted from the core tasks of those businesses into irrelevant areas? Therefore, will she pay attention to the European Commission's proposals to impose the introduction of work councils for small businesses with fewer than 50 employees? I understand that the Government oppose those proposals but, because we have signed the social chapter, we have given away our veto, so to speak, which would have enabled us to opt out of those arrangements. What do the Government propose to do about that? Does it not show the lunacy of signing up to the social chapter in the first place?

Mrs. Roche

It is interesting to see the hon. Gentleman taking an interest in red tape and the European Union. He will be aware that the previous Government, of which he was a supporter, gold-plated European legislation coming from Brussels and also imposed burden upon burden on small business. It is no wonder that the Conservatives have lost the confidence of the small business community, as the hon. Member for Chesham and Amersham (Mrs. Gillan), who speaks for them on these matters, admits only too readily and, if I may say so to her, very honestly.

Mr. Clifton-Brown

Does the hon. Lady agree with the Hampel committee that small companies need less prescription and form-filling, and more efficiency and competitiveness? They do not require extra interference from Government, extra stakeholders' rights and extra bureaucracy.

Mrs. Roche

I absolutely agree with the hon. Gentleman. It is, therefore, a great pity that the previous Government, whom he supported, did none of those things. What did this Government do immediately after coming into office? We immediately made sure that half the members of the deregulation group, which is tasked with cutting red tape in government, represented small and medium-sized business. What a difference from the previous Administration, who talked much but delivered little.

Dr. Ladyman

There is a small engineering company in my constituency that has run into cash-flow problems in the past few months. The owner is preparing a report for me, which I am about to pass on to Ministers. It shows that the problems have been brought about by the systematic attempts by large engineering companies to argue about fees, delay payment of debt and force small engineering companies into difficulties. Can my hon. Friend assure me that the Government will tackle the matter, so that I can tell my constituent that this Government will give him help?

Mrs. Roche

My hon. Friend is right. That is why we are introducing the package of measures, including the Bill dealing with payment of statutory interest. I am delighted that so many large firms now take the issue seriously, because they know that it is important for their own competitiveness and that of small firms and the UK economy as a whole. They are taking steps to ensure prompt payment practices.