Commons Sense

House of Commons · Ministers' Questions

SMEs: Late Payment

Thursday 25 January 2024 · 2 questions

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Answered 2 Partly answered 0 Not answered 0

Key points

  • Debbie Abrahams raised concerns about late payments affecting small businesses, resulting in an annual loss of 684 million and a 7% increase in 2023.
  • The Government is giving the Small Business Commissioner more powers and producing league tables to address late payments.
  • From April 2024, firms bidding for Government contracts will face new measures to combat late payments.

Topics (select to filter)

Questions & Answers

Q1 Debbie Abrahams Lab Oldham East and Saddleworth
Business & Trade
Context

The issue of late payments is affecting the ability of small businesses to trade, with an average loss of £684 million annually, a 7% increase in 12 months. The situation contributes to approximately 50,000 small businesses going under each year.

Question

I am concerned about late payments continuing to blight the ability of small businesses to trade, with an average loss of £684 million annually and a 7% increase in 2023. I appreciate what you said about another review but what specific actions are the Government taking to address this issue?

Answer from Kevin Hollinrake

The hon. Lady is right to raise this issue; we are giving the Small Business Commissioner more powers, producing league tables, and working closely with the Good Business Pays campaign to name and shame those responsible for late payments. From April 2024, firms bidding for Government contracts worth over £5 million must demonstrate they pay invoices within an average of 55 days, reducing to 45 days in April 2025 and then to 30 days.

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Q2 Debbie Abrahams Lab Oldham East and Saddleworth
Business & Trade
Context

Small businesses are struggling due to late payments, losing an average of £684 million annually with a 7% increase in the past year. This is contributing to approximately 50,000 small businesses closing each year.

Question

Small businesses are the backbone of our economy but unfortunately late payments continue to blight their ability to trade, with an average loss of £684 million a year increasing by 7% in 2023. I appreciate what you said about another review— we had one a few years ago—but what specific actions are the Government taking to address this appalling abuse of power?

Answer from Kevin Hollinrake

The hon. Lady is right to raise this issue; we are giving the Small Business Commissioner more powers, producing league tables, and working closely with the Good Business Pays campaign to name and shame those responsible for late payments. From April 2024, firms bidding for Government contracts worth over £5 million must demonstrate they pay invoices within an average of 55 days, reducing to 45 days in April 2025 and then to 30 days.

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