[Mr Jim Hood in the Chair] — Late Payments (SMEs)

Part of the debate – in Westminster Hall at 10:43 am on 14th September 2011.

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Photo of Edward Davey Edward Davey The Parliamentary Under-Secretary of State for Business, Innovation and Skills 10:43 am, 14th September 2011

The Secretary of State for Communities and Local Government is keen to ensure that all Government Departments are doing their best, and I am sure that when he reads this debate he will note the hon. Gentleman’s comments.

Regarding the hon. Gentleman’s comments on the EU directive, we will undertake a second consultation in the winter of 2011-12 and will then transpose the legislation into UK law in the first half of 2012, which is earlier than we are required to do. I hope that that addresses some of the concerns that colleagues have expressed during the debate.

In the final minutes that I have left, I want to try to address some of the points that I have not yet dealt with. For example, my hon. Friend the Member for

Solihull (Lorely Burt) asked how we are progressing with the approved supplier status, having committed ourselves to trying to simplify the application forms. I recommend that she reads the Cabinet Office report published in July that shows that 14 out of 17 Government Departments have removed the requirement for pre-qualification questionnaires for contracts for less than £100,000. As she is aware, those questionnaires were the really big bugbear that many companies complained to us about. The remaining three Departments are piloting an open group process. So there has been some real progress. Clearly there is more to do, but we are going in the right direction.

There were a number of excellent contributions to the debate. I particularly liked the contribution of my hon. Friend Anne Marie Morris, who showed a lot of knowledge of this issue. She made the point that late payment is, in many ways, a private sector issue, because both this Government and its predecessor have made some headway on late payment within the public sector. She also referred, quite rightly, to the issue of trade credit insurance. That is one of the issues that I asked about in preparing for this debate. In many ways, trade credit insurance is a private sector solution. The market for trade credit insurance is relatively small and—almost by definition—those people who use it tend to be more educated and better trained in managing their cash flow and invoicing. She referred to the sausage firm in her constituency, which is obviously now growing with a bang, and she was quite right to say that trade credit insurance is not the answer for everything.

My hon. Friend was right to say that we should be very careful before we go down the compulsion route. That has always been my view too and the examples that she referred to from Australia and other EU countries that have gone down that route showed that in the end compulsion is not helpful to businesses on either side of the late payment issue.

My hon. Friend also talked about accounting standards. She will be aware that the Government do not want to tie up business in red tape, but as I am the Minister with responsibility for corporate governance and as I am looking at narrative reporting, I will certainly take on board her points and consider them very carefully.

The Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for Hertford and Stortford, who is the Minister with responsibility for small businesses, will read this debate with relish, because of the quality of the contributions to it. I thank hon. Members for their contributions, and I particularly thank the hon. Member for Oldham East and Saddleworth for ensuring that we had the opportunity to debate this issue.