HL Deb 29 June 2000 vol 614 cc83-4WA
Lord Harrison

asked Her Majesty's Government:

In the light of the recent NatWest quarterly survey of small firms showing that few small and medium-sized enterprises have taken advantage of the statutory right of interest on late payments of commercial debt, how the relevant legislation can be improved or better implemented. [HL2977]

Lord Sainsbury of Turville

The NatWest Quarterly Survey indicated that the proportion of small businesses that say late payment is a problem continues to fall—from 45.1 per cent in October 1997 survey to 36.7 per cent. The findings of this survey suggested that there may well be a potential to increase usage of the legislation by publicising more widely its ease of use. We intend to work with our partners on the Better Payment Practice Group to spread this message across the small business community.

We recognise that we are still at an early stage and the UK has some way to go before we meet the example set by countries such as Sweden and Denmark. However, progress made since the introduction of the legislation and the Better Payment Practice Campaign in 1998 has been encouraging. Recent research published in the Grant Thornton European Business Survey confirms that the average payment period for sales invoices in the UK now stands at 45 days against an EU average of 54 days. The survey also confirms a continuing downward trend in UK payment times.

Lord Harrison

asked Her Majesty's Government:

In the light of the recent survey performed by Experian which suggests that average payment periods on commercial debt have extended from 59 to 62 days, how small and medium-sized enterprises might be helped to overcome this additional burden on their survival and growth. [HL2978]

Lord Sainsbury of Turville

The data published by Experian draw on the sales ledger information of many different companies and report the number of days the subject company takes to pay its invoices. One very good reason for apparently lengthy payment periods among some companies is that many agree terms of 60 or more days. Seemingly slow payers could therefore, actually, be paying within the terms agreed with their suppliers.

The Government are, however, commited to improving the payment culture of the UK and have introduced a range of measures to help businesses tackle the problem of late payment of commercial debt, including the Late Payment of Commercial Debts (Interest) Act 1998. In addition, the Government support the recently approved EC directive on combating late payment in commercial transactions and propose to consult the businesss community during transposition.

We recognise, however, that legislation is one part of a package of measures introduced to improve payment practices in the UK and will continue to work in partnership with the business community, through the Better Payment Practice Group (BPPG), to help businesses benefit from the increased opportunities that a healthy cash flow can bring.