Prompt Payment Code

Cabinet Office and the Chancellor of the Duchy of Lancaster – in the House of Commons at 12:00 am on 5th July 2017.

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Photo of Neil Parish Neil Parish Conservative, Tiverton and Honiton 12:00 am, 5th July 2017

What progress the Government are making on the delivery of the prompt payment code.

Photo of Gillian Keegan Gillian Keegan Conservative, Chichester

What progress the Government are making on the delivery of the prompt payment code.

Photo of Caroline Nokes Caroline Nokes Parliamentary Under-Secretary (Cabinet Office)

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.

Photo of Neil Parish Neil Parish Conservative, Tiverton and Honiton

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?

Photo of Caroline Nokes Caroline Nokes Parliamentary Under-Secretary (Cabinet Office)

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.

Photo of Gillian Keegan Gillian Keegan Conservative, Chichester

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?

Photo of Caroline Nokes Caroline Nokes Parliamentary Under-Secretary (Cabinet Office)

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.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

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?

Photo of Caroline Nokes Caroline Nokes Parliamentary Under-Secretary (Cabinet Office)

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.

Photo of Bill Esterson Bill Esterson Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (International Trade)

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, who just want to be paid on time?

Photo of Caroline Nokes Caroline Nokes Parliamentary Under-Secretary (Cabinet Office)

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.