§ Mr. Jim CunninghamTo ask the President of the Board of Trade when she plans to bring forward legislation based on the Green Paper regarding small firms charging interest on their debts. [26827]
§ Mrs. Roche[holding answer 2 February 1998]: The Late Payment of Commercial Debts (Interest) Bill was introduced, in the other place, on 10 December. It had its Second Reading on 12 January and was subject to committee consideration on 28 January.
§ Mr. Jim CunninghamTo ask the President of the Board of Trade what plans she has to protect micro-firms against the practices of larger debt holding companies. [26829]
§ Mrs. Roche[holding answer 2 February 1998]: The Late Payment of Commercial Debts (Interest) Bill proposes to provide small businesses, including 665W micro-businesses, with the statutory right to claim interest from large businesses and the public sector on late paid commercial debts. After two years, it is proposed to expand the right to claim so that all businesses may be subject to claims for interest from small businesses, including micro-businesses. After a further two years, the Government have proposed that all businesses and the public sector will have the statutory right to claim interest from all businesses and the public sector.
The Bill is currently being considered in the other place, after which time it will be discussed in this House.
The Government are also working in partnership with the Better Payment Practice Group, which includes small firms representative organisations, to promote a better payment culture and to ensure that small firms are able to manage their credit effectively. We will also publish a free guide to credit management and debt recovery and ensure that small businesses can access credit management information and advice through the Enterprise Zone. In addition Business Links, and the equivalent organisation in Scotland, Wales and Northern Ireland have been encouraged to assist small businesses with their credit management procedures.
§ Mr. Jim CunninghamTo ask the President of the Board of Trade if she will list the benefits of allowing small firms to charge interest on moneys owed by late payers. [26828]
§ Mrs. Roche[holding answer 2 February 1998]: The Regulatory Appraisal of the Late Payment of Commercial Debts (Interest) Bill details, among other things, the benefits of the legislation. The legislation:
will allow a small business supplier to claim recompense for the cost of late payment;may reduce business risk caused by cash-flow uncertainty resulting from late payment;will make it uneconomic for debtors to withhold payment;will reduce the number of cases which need to go to court for settlement, as the right to interest will be statutory;will encourage creditors and debtors to agree credit periods and to resolve disputes quickly;will result in less valuable management time and resources being spent on chasing tardy debtors.