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Prompt Payment Code

Volume 626: debated on Wednesday 5 July 2017

Since 2015, we have worked closely with the Government’s major strategic suppliers to encourage them to sign up to the prompt payment code. I am pleased to say that all 32 strategic suppliers that we targeted in 2015 have now signed up.

Will my hon. Friend explain to me exactly how we are speeding up payments to companies? Cash flow from Government contracts is so important. Also, is there a way to make sure that Government contracts are of a size such that small and medium-sized companies are more able to bid for them?

We know how important prompt payment is to smaller businesses, and we are committed to making further improvements to payment practice. We are working to remove all barriers facing small and medium-sized enterprises bidding for Government contracts, and we are committed to increasing spend with SMEs, both directly and through the supply chain. We have also opened the free-to-use Contracts Finder website for suppliers to advertise subcontracting opportunities.

Cash flow is vital to small businesses in Chichester and throughout the country. What are the Government doing to ensure that they lead the way and pay their suppliers properly?

I welcome my hon. Friend to the House. The Government are committed to paying our suppliers promptly. All public sector buyers must include a 30-day payment term in new public sector contracts, pay undisputed invoices within 30 days, and require that this payment term be passed down the supply chain. Our own payment performance is published quarterly, and the Government are doing brilliantly well in meeting our targets.

When my party becomes the Government of this country very soon, we will declare war on late payments, requiring companies bidding for a public sector contract to pay their suppliers within 30 days, and going beyond that with heavy fines for late payers. Will the Conservatives in opposition support us in passing the necessary legislation?

I congratulate the hon. Gentleman on his optimism. In fact, this Government have made sure that undisputed invoices are paid within five days in many cases, and 96% of all contracts are paid within 30 days when the invoices are not disputed.

The prompt payment code simply has not done enough to address the scourge of late payment, with £26 billion owed and an average of 72 days being taken to pay invoices across the country. May I say to the Minister that she should stop paying lip service to the problem and take the action needed for smaller businesses, which just want to be paid on time?

The hon. Gentleman is of course right to point out what a problem this is for small business in particular. However, I want to draw his attention to the Government’s mystery shopper service, which has secured a positive outcome for the vast majority of companies that have brought disputed payments to our attention, and indeed to the signatories to the independent Prompt Payment Code Compliance Board, to which we would encourage all those who have not been paid on time to report such cases.