New Clause 11 - Director's Report (Statement of Payment Practice)
Companies (Audit, Investigations and Community Enterprise) Bill [Lords]
11:00 am
Mr Brian Cotter (Shadow Minister (Trade & Industry), Trade & Industry; Weston-Super-Mare, Liberal Democrat)
I beg to move, That the clause be read a Second time.
I appreciate the fact that new clause 11 has been selected for debate. To me, it covers one of the most important issues to be raised under the Bill. As a result of legislation passed in 1998 to address late payment, the business community finds itself in a situation in which one in four businesses are failing from a lack of cash flow, mostly because large firms in particular are not paying their bills on time.
I very much regret that this important new clause has come up at such a late stage, because I had quite a lot to say about it. I shall make only a few remarks, however, and I look to the Minister for a response. Indeed, I hope that she will cave in, as she should,
given the concern about late payment. If she does not, however, I shall return to the issue with great force on Report.
The Late Payment of Commercial Debts (Interest) Act 1998 made it clear that businesses needed clearly to include records of payment in their annual reports. However, as I said on Second Reading, and as the Minister will know, that is not being done. I have asked several parliamentary questions about the matter and pursued it with Companies House, but even Companies House was not immediately able to produce evidence of what reporting has been done as regards the payment of bills, and it took a month or more to find information that should be readily available to small businesses.
The late payment of debts is becoming an increasing problem for small businesses, which are being driven out of business as a result. It is increasingly difficult for them to make judgments, because they do not have clear information, in a standard format, about larger companies' payment records as companies have not been able to list the information themselves.
I have a lot of questions, and I hope the Minister accepts that there are issues to address. Although I hope she will give me some reassurance, I shall refer to the issue again on Report.