§ Mr. OnslowTo ask the Secretary of State for Defence what action he is taking to expedite the settlement and payment of defence contracts, so as to enable contractors to make prompt payment to their subcontractors; and what is his latest estimate of the amounts outstanding on unsettled accounts for work done.
§ Mr. AitkenMy Department has a long-standing policy of paying its bills promptly. We normally settle our contract payments within 30 days of receiving invoices, and we will soon be introducing a two-week billing cycle with payment by the bankers automated clearing service.
Payment arrangements and details of outstanding amounts between contractors and their subcontractors are a matter for the companies concerned. However, since my right hon. Friend the Chancellor of the Exchequer's statement of 10 March, Official Report, column 753, we have included a clause in all new defence contracts requiring prime contractors to pay their subcontractors within a specified period from receipt of a valid invoice.
On Monday 26 October my Department's central bill-paying organisation held valid bills for some £210 million. We expect these to be paid by 2 November.