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Late Payments

Volume 506: debated on Thursday 4 March 2010

3. How many small businesses which supply his Department did not have their invoices paid within his Department’s target time in the latest period for which figures are available. (320194)

In January, fewer than one in 18 supplier invoices to the Department took longer than 10 days to pay. Data are not kept separately for small businesses, but data regarding the invoices of all suppliers are published on the Department’s website every month.

About 4,000 business failures were caused by late payment last year. How will the Government protect failing businesses as a result of late payment and what sanctions have they promised to impose on businesses that contribute to the problem by delaying payment?

The hon. Gentleman will know about the legislation that we have introduced, but, in reality, companies are reluctant to take sanctions against their customers. He is absolutely right to highlight the importance of this issue and to draw attention to those 4,000 businesses. That is why we launched the prompt payment code for government at the start of the downturn. We have committed to a central Government target of 10-day payment of invoices, on which we have a very good record of adherence. In addition, we have taken very successful action to support small businesses through the Revenue and Customs’ time to pay initiative. The measures that we have taken have made a big contribution to the relatively low record of business failures during the recession that we have just come through, compared with past recessions.