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Payment Policies

Volume 487: debated on Thursday 5 February 2009

6. What recent discussions he has had with large corporations about their policies on prompt payment of contractors and suppliers. (254313)

DBERR has been in contact with more than 200 of the UK’s largest corporations and business representative bodies. Additionally, we have brought forward more than £66 billion of payments made by central Government Departments, launched a series of cash flow management guides to ensure that business has access to the very best information and supported the launch of a new prompt payment code by the Institute of Credit Management.

I thank the Minister for that answer. We clearly have to recognise that if large companies do not pay quickly in this crisis, they will force their supply chain out of business and lose out in the long run. Is it not crucial, given the balance of power between the large companies and the small companies trying to enforce payment terms, that there is more external intervention? To that end, does he support the call by the Federation of Small Businesses for Companies House to be given more resources to name and shame companies that do not register their payment terms with it?

Yes, it is important that big companies look to do what they can to support their supply chain during these difficult times. In the automotive industry, for instance, I am aware of a number of car manufacturers actively working with their supply chain and paying earlier than they normally do. Particularly in a time of lean or just-in-time production in the supply chains of the automotive industry and many other sectors of our economy, big companies have a direct interest in ensuring that small companies continue to survive. Many of them are already taking action to do that. Of course, the action that the Government are taking to stimulate credit in the economy will also help those small businesses.

Does the Minister accept that the Government’s efforts to promote prompt payment by large corporations will be severely undermined if they cannot put their own house in order? Will he therefore promise to investigate reports that many NHS trusts are failing to pay their contractors and suppliers within 30 days—far beyond the 14 days that the Government have promised?

I will certainly ensure that the Department of Health is aware of the concerns that the hon. Gentleman expresses. We have made a prompt payment commitment right across government, and we expect it to be delivered on. Inevitably, there may be some situations in which queries are made about invoices and judgments have to be taken about whether payment should be made, because we need to protect taxpayers’ money. We want to ensure that payments are made properly and promptly, and I will happily ensure that his comments are passed on.