Commercial Debt

HC Deb 31 July 1997 vol 299 cc638-40W

Mr. Öpik

To ask the President of the Board of Trade if she will make a statement on her plans to improve the ability of small businesses to obtain money owed to them. [11915]

Mrs. Roche

Small businesses play a fundamental part in the economy of the UK. The Government are concerned therefore by any actions that unnecessarily hinder their competitiveness. The late payment of commercial debt is acknowledged by many in the business community to be a serious problem, particularly for small businesses which are least able to bear the additional costs resulting from payment delays. The Government are determined therefore to improve the payment culture in the UK.

The Government are pursuing a package of measures in partnership with business organisations.

The Government will introduce a statutory right to claim interest on late payment of commercial debt. Legislation will be transparent, so that all businesses are clear about their rights and obligations. A Green Paper, "Improving the Payment Culture: A Statutory Right to Claim Interest on Late Payment of Commercial Debt" was published on 28 July.

The Lord Chancellor announced, in June of this year, that, as part of the review of existing proposals for the reform of the civil justice system, consultation would proceed on proposed fast-track and multi-track procedures which will ensure realistic timetables and reduce the cost, delay and complexity of civil litigation.

The Government will publish league tables of the payment performance of Government Departments and agencies. They are working with others to produce league tables on the payment performance of public limited companies and their large private subsidiaries. The first set of tables is expected in summer 1998.

I am delighted to say that a number of leading business representative organisations have pledged to join the Government in tackling the problem of late payment. They include the British chambers of commerce, the Confederation of British Industry, the Federation of Small Businesses, the Forum of Private Business, the Institute of Directors, the Union of Independent Companies, the Country Landowners Association and the National Farmers Union. Over the next 12 months, we will work with them and others on a number of initiatives to tackle late payments and meet the needs of small businesses.

Mrs. Gillan

To ask the President of the Board of Trade what estimates she has made of the cost of publishing league tables of payment performance of plcs and their subsidiaries. [11733]

Mrs. Roche

The Government are committed to working in partnership with the private sector to publish league tables of the payment performance of public limited companies and their large private subsidiaries.

The Companies Acts already require plcs and their large private subsidiaries to state the average time to pay their suppliers and to publish this figure annually in their director's report. The Federation of Small Businesses has offered to collate and publish this information in a league table format. These tables will provide small businesses with information on how quickly they can expect to be paid when dealing with larger business, at no cost to the public purse.

The publication of league tables is another important step in promoting a more ethical payment culture in the UK.

Mrs. Gillan

To ask the President of the Board of Trade what is the closing date for representations on the consultation paper, "Improving the Payment Culture." [11730]

Mrs. Roche

I refer the hon. Member to the reply given to the hon. Member for Maidenhead (Mrs. May) on 22 July 1997,Official Report, column 507.

Mrs. Gillan

To ask the President of the Board of Trade if she will list the organisations and individuals who have been sent the consultation paper, "Improving the Payment Culture." [11729]

Mrs. Roche

To date, some 3,500 copies of the Green Paper "Improving the Payment Culture: A Statutory Right to Claim Interest on Late Payment of Commercial Debt" have been sent to organisations and individuals. Recipients include individual businesses, trade associations, legal, accountancy and financial bodies, business representative organisations, business links, training and enterprise councils, chambers of commerce, local authorities and NHS trusts.