Late Payment

HC Deb 23 October 2000 vol 355 cc9-10W

Mr. Efford

To ask the Secretary of State for Trade and Industry what recent discussions he has had with ministerial colleagues on compensation for payment by public bodies after 30 days of invoices from small businesses. [134113]

Ms Hewitt

The Late Payment of Commercial Debts (Interest) Act 1998 currently seeks to recompense the supplier for the time value of money. It does not currently provide for the cost of pursuing the debt.

The Government are aware that legislation in other EU countries includes charges for the pursuit of the debt, and we have worked closely with our European partners on the forthcoming EC Directive on combating late payment in commercial transactions.

We welcome the recent publication of the Council and Parliament approved text and we are keen to work with the business community and ministerial colleagues to ensure that the Directive is implemented as soon as possible.

Mr. Efford

To ask the Secretary of State for Trade and Industry if he will ensure that small businesses automatically receive interest from public bodies on late payments made after 30 days of being invoiced. [134111]

Ms Hewitt

The Government currently have no plans to make changes to the Late Payment of Commercial Debts (Interest) Act 1998.

The Act came into force on 1 November 1998. From that date, small businesses have had an automatic right to claim interest from the public sector on debts incurred under contracts agreed after that date.

Mr. Efford

To ask the Secretary of State for Trade and Industry what steps he has taken to ensure that public bodies settle invoices from small businesses within a 30 day period. [134112]

Ms Hewitt

All Government Departments and Agencies are required to pay all undisputed bills within 30 days of receipt of the goods or services or a valid invoice, whichever is later, or other agreed credit period. Since 1993 all Government Departments and Agencies have been required to monitor their payment performance. The figures are published annually in the form of a written PQ.

Tough targets have been set to ensure that we continue to improve public sector payment performance. For 1997–98 all Departments were required to pay 95 per cent. of their invoices on time, 97.5 per cent. was introduced for 1998–99 and 100 per cent. for 1999–2000.

For the financial year 1999–2000, the overall payment performance of Government was 97.89 per cent.