Bill Esterson – 2016 Parliamentary Question to the Department for Business, Innovation and Skills

The below Parliamentary question was asked by Bill Esterson on 2016-01-12.

To ask the Secretary of State for Business, Innovation and Skills, what estimate he has made of the cost to the UK economy of late payments to SMEs in each of the last five years.

Anna Soubry

The Department does not hold the information required. However, BACS data shows that small and medium businesses are owed a total of £26.8 billion, and the average small business is waiting for £31,900 in overdue payments.[1]

The Government recognises that late payment remains an important issue for small businesses in the UK and is taking significant steps to assist small businesses to recover late payment debts. This is part of a package of measures to tackle late payment. We have also legislated for new transparency measures in the public and private sectors.

The Small Business Enterprise and Employment Act 2015 legislated for new reporting requirement on the UK’s largest companies and Regulations will be introduced this year which will compel larger companies to report on payment practices and performance. This information will be published on a six-monthly basis and will be made publicly available.

The Public Contracts Regulations 2015 introduced a requirement for all public-sector buyers to publish annually, from 2017, their liability to debt interest payments. In central government we have gone further and faster. We will be publishing against these requirements quarterly from April this year. This will allow full public scrutiny of payment performance.

Through the Enterprise Bill, currently before Parliament, we will legislate to establish a Small Business Commissioner to give general advice and to help small businesses resolve disputes relating to payment matters with larger businesses.

Tackling late payment is about creating a responsible payment culture where larger companies recognise the benefit of having a sustainable and robust supply chain, and smaller businesses feel able to challenge poor behaviour. Once implemented, the Government is confident that these measures will lead to significant changes in the UK’s payment culture.

[1] BACS Data June 2015.