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Oral Answers to Questions — Business, Innovation and Skills – in the House of Commons at 9:30 am on 26th March 2015.

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Photo of Debbie Abrahams Debbie Abrahams Labour, Oldham East and Saddleworth 9:30 am, 26th March 2015

If he will bring forward legislative proposals to ban the practice of firms being asked by large companies to make agreements to pay to become or remain approved suppliers.

Photo of Matthew Hancock Matthew Hancock Minister of State (Department for Business, Innovation and Skills), Minister of State for Portsmouth, The Minister of State, Department of Energy and Climate Change

The Small Business, Enterprise and Employment Bill contains radical steps to tackle late payment. We have prohibited the practice of paying to join or remain on supplier lists in certain circumstances. We recently consulted on going further and will now require large companies to report on these practices.

Photo of Debbie Abrahams Debbie Abrahams Labour, Oldham East and Saddleworth

I have been campaigning for four years to end the blight of late payments to small businesses, including by ending controversial “pay to stay” contracts. The small business Bill is too little too late. Labour tabled amendments in Committee to end and outlaw the controversial “pay to stay” arrangements. Why did the Government oppose them, and in the light of recent revelations, will they now drop their opposition?

Photo of Matthew Hancock Matthew Hancock Minister of State (Department for Business, Innovation and Skills), Minister of State for Portsmouth, The Minister of State, Department of Energy and Climate Change

I pay tribute to the hon. Lady’s long-standing and effective campaign on late payment. The amendments did not work technically, but I am prepared to consider anything to tackle the culture of late payment. We will make 30 days the normal payment term and 60 days the maximum. That is the culture change we need, and I look forward to working with her to make it happen.

Photo of Toby Perkins Toby Perkins Shadow Minister (Business, Innovation and Skills)

The Minister seems to be entering the realms of fantasy when he claims that the limited steps the Government have taken will put an

“end to the UK’s late payment culture once and for all.”—[Hansard, 24 March 2015; Vol. 594, c. 1357.]

According to the latest BACS figures, there were more than £46 billion of late payments last year—the highest figure on record—and that figure has continued to grow over the course of this Government. How much and by when would late payments need to fall for him to consider his steps successful in eradicating this culture once and for all?

Photo of Matthew Hancock Matthew Hancock Minister of State (Department for Business, Innovation and Skills), Minister of State for Portsmouth, The Minister of State, Department of Energy and Climate Change

We do need to eradicate that culture, and I have already set out the steps we are taking. However, may I also take this opportunity to pay tribute to the work of the Business Secretary on this issue and many others over the past five years? We have had an incredibly business-like relationship working hard in the Business Department, and I pay tribute especially to his work on getting an industrial strategy that all parties in the House are now signed up to; to his work on women on boards; and on late payment. It has been a great pleasure, and I look forward to working with him in the future, too.