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Volume 496: debated on Wednesday 16 September 2009

To ask the Minister of State, Department for Business, Innovation and Skills what steps the Government are taking to help small and medium-sized enterprises whose customers do not pay in accordance with agreed contractual terms. (285671)

The UK was one of the world's first countries to introduce late payment legislation in November 1998. It provides all businesses with the right to claim interest for the late payment of commercial debt, and where there are no pre-agreed payment terms, the legislation provides that the payment period is 30 days from the later of either delivery of goods or receipt of invoice.

Over half of UK business transactions are not covered by pre agreed payment terms so we are also equipping business to better manage customer relationships and cash flow management through a series of guides developed in partnership with the Institute of Credit Management, the CBI, IoD, FSB, FPB and BCC.

Further advice on this legislation and claiming interest for late payments can be found at:

To ask the Minister of State, Department for Business, Innovation and Skills what steps the Government have taken to encourage (a) private sector companies and (b) public sector organisations to sign up to the prompt payment code. (285672)

My noble Friend the Secretary of State and for Business, Innovation and Skills has written to over 1,500 UK businesses and the Minister for Economic Competitiveness, Small Business has hosted prompt payment events with businesses, supported by the Confederation of British Industry, Institute of Directors, Federation of Small Businesses, Forum of Private Business and the British Chamber of Commerce.

All central Government departments have signed the prompt payment code and my officials are working with the regions to promote the code to the wider public sector and to businesses.

Regional Ministers are taking a strong lead in driving prompt payment. For example, the Minister for the West Midlands acted in March 2009 to encourage public sector organisations in the region to sign up to a 10 day payment pledge; 44 have done so thus far and further action is now being taken to encourage more to do so.