§ Lord Campbell of Croy asked Her Majesty's Government:
§ Whether they will encourage government departments and other public bodies to pay valid bills within 30 days of the dates when they are due for payment.
Lord Campbell of CroyMy Lords, I am grateful to my noble friend for that excellent and helpful reply. Is it not especially damaging to small firms when payments are unnecessarily or deliberately delayed? As a result, some of the firms may not be able to survive. Will the Government continue to set a clear example for others to follow?
The Earl of CaithnessMy Lords, my noble friend is absolutely right. It can be very damaging, not only to small businesses—having run small businesses, I recall the difficulties—but also to medium and large-sized businesses. A survey of government departments' payment performance shows departments meeting the 30-day target in 75 to 100 per cent. of cases. Most departments were above 85 per cent.
§ Lord MellishMy Lords, I welcome the statement that departments are not doing badly now; in the past their record of payments, particularly to small firms, has been very bad indeed. I agree that small firms suffer terribly. Why cannot government departments check a job while it is being done, see whether it is all right and pay firms for the work they have done?
The Earl of CaithnessMy Lords, I am glad to tell the noble Lord that the situation has improved quite dramatically. We continue to press for further improvement.
§ Lord Hailsham of Saint MaryleboneMy Lords, is my noble friend aware that the problem is not confined to government departments? Some years ago, the Law Commission, or at least a comparable body, recommended that contract debts unpaid throughout a certain period of time should carry interest. However, nothing has so far been done about that recommendation.
The Earl of CaithnessMy Lords, my noble and learned friend is right. It can be put into the contract between private individuals that interest is payable if bills are not met within a certain time.
§ Lord McIntosh of HaringeyMy Lords, perhaps I may take up the point raised by the noble and learned 928 Lord, Lord Hailsham. Even the figure of 85 per cent. that the Minister gave is not very satisfactory for the 15 per cent. who do not receive payment. Can the Minister assure the House that any action taken as regards private debts will also apply to government departments?
The Earl of CaithnessMy Lords, I know that the figure of 85 per cent. can be improved upon. It is something for which we are certainly pressing.
§ Lord EltonMy Lords, will the Government extend their admirable policy on prompt payment of bills to a policy for the prompt payment of grants? Is my noble friend aware that it is possible for small voluntary bodies to wait eight weeks for large sums of money clue on a particular date? Would it be possible for them to claim interest under those circumstances'?
The Earl of CaithnessMy Lords, I congratulate my noble friend on the skilful way in which he has used this Question to raise another question, which I shall investigate.
§ Lord MonsonMy Lords, does the noble Earl agree that British Rail is still, for the moment, effectively a public body in the broad sense of the term? Taxi drivers have been engaged by British Rail to convey to their destinations passengers who have been stranded as a result of the false economy measures introduced by BR as a prelude to privatisation. is the noble Earl aware that the taxi drivers have told me that they have had to wait up to four months for the money that is due to them? Is that not deplorable?
The Earl of CaithnessMy Lords, I hope that the noble Lord has used his right to take up the matter directly with BR, whose management is responsible.
§ Lord Clark of KempstonMy Lords, is my noble friend aware that in many cases local authorities are slow in paying? Is he further aware that if one is late in paying one's income tax, interest is mandatory? The situation is similar with VAT. Would it be a good idea and an incentive to large firms if the Government were, after 30 days, to pay interest at the same exorbitant rate as is charged for late payment of income tax?
The Earl of CaithnessMy Lords, we encourage not only government departments but also local authorities, private companies and private individuals to pay their bills on time. There has been much correspondence and discussion about interest on unpaid bills. I certainly take note of what my noble friend says, but as he will be aware, it can be written into the contract.
§ Lord EzraMy Lords, following the reminder of the noble and learned Lord, Lord Hailsham, are the Government giving any thought to legislative backing for the payment of interest for overdue debts, bearing in mind that overdue debts in this country are much more noticeable and last for longer periods than in most Continental countries?
The Earl of CaithnessMy Lords, as I said in response to my noble friend Lord Clark, there has been considerable discussion and the matter is kept under review.
§ Lord SwinfenMy Lords, is my noble friend aware that a number of voluntary bodies and charities which look after disabled people on behalf of local authorities are seriously embarrassed by the delay on the part of those local authorities in paying the bills?
The Earl of CaithnessMy Lords, I am sorry to hear that some local authorities are not as prompt in paying their bills as others. I hope that my noble friend will take the matter up directly with the local authorities concerned.
§ Lord WigoderMy Lords, will the Minister consider asking the noble and learned Lord the Lord Chancellor to adopt the same admirable principle in relation to legal aid fees?
The Earl of CaithnessMy Lords, I am sure that my noble and learned friend has heard what the noble Lord said.
§ Baroness Oppenheim-BarnesMy Lords, is my noble friend aware that some of our largest and most responsible companies make a habit of discriminating positively in favour of small businesses to which they owe money and pay them before anyone else?