HC Deb 27 January 2000 vol 343 cc564-5
5. Mr. Desmond Browne (Kilmarnock and Loudoun)

If he will make a statement about the use by businesses of the Late Payment of Commercial Debts (Interest) Act 1998. [105753]

The Minister for Small Business and E-Commerce (Ms Patricia Hewitt)

The latest review of credit management activity shows that 5 per cent. of firms have already used the legislation—up from 3 per cent. six months ago—and that 11 per cent. are planning to use it.

Mr. Browne

Does my hon. Friend have any reliable survey evidence to show that there has been any improvement in Britain's historically lamentable payment culture since 1 November 1998, when the Act came into force?

Ms Hewitt

There are several surveys, not all of them consistent. I am glad to say that the survey by Dunn and Bradstreet, one of the most comprehensive, shows that 60 per cent. of companies are paying on time, compared with only 54 per cent. in 1997. That has taken us up to third place in the European Union league table on payment of debts. It is still not good enough, but we are going in the right direction.

Mr. Nigel Evans (Ribble Valley)

Has the Minister been able to do a survey or analysis of the sort of businesses that are using the legislation? What percentage of small businesses are using the legislation against other small businesses that are late in paying their debts?

Ms Hewitt

I think the hon. Gentleman does not entirely understand the legislation. As currently in force, it allows small businesses to pursue large businesses because that is the real problem that we identified and set out to put right. The introduction of the rest of the law is being phased. The intention is that, from 1 November this year, small businesses will be able to use the law against other small businesses, and that, from 1 November 2002, all businesses and public sector organisations will be able to use the law, but we continue to keep those phasing arrangements under review.

Mr. Brian Cotter (Weston-super-Mare)

Does the Minister agree that the Government should take a lead in promoting early payment of debt, and that it is regrettable that the Bill did not reflect that? Will she provide us with statistics showing the Government's record at both local and national level?

Ms Hewitt

Of course Government must take a lead and that is what we are doing. Every Government Department has signed up to the better payment practice code. Most paid almost 97 per cent. of their bills on time in the last financial year. The Department of Trade and Industry has substantially improved its payments record and my right hon. Friend the Secretary of State has asked officials to ensure that 100 per cent. of bills are paid on time.

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