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Pay to Stay Agreements

Volume 590: debated on Thursday 8 January 2015

18. If he will bring forward legislative proposals to prohibit firms from being asked to make pay to stay agreements to remain or become approved suppliers by large firms. (906880)

The Government are radically increasing transparency over late payment, drastically shortening public sector payment terms, and consulting on changes to tackle pay to stay arrangements.

The business practices of Premier Foods in charging firms for the privilege of being a supplier have been condemned as unethical and an example of predatory capitalism. Will the Minister join me in condemning the way in which City Link management treated its work force, and will he say what the Government are doing to support City Link workers? Does he support a full inquiry into this dreadful affair, including into the circumstances leading up to the announcement, so that lessons can be learned and we do not have any repeat of such events?

The administrator will report on City Link. On the issue of Premier Foods, the practices were hard to defend, as I said earlier. In fact, the company found them impossible to defend when they came to light. The extraordinary increase in transparency will help to make sure that we can see which companies have good payment practices and which have the worst. We can then compare them and hold to account those companies with bad practices. More than that, we are consulting on changes to such contracts and we will have the results of that consultation shortly.