Companies (Audit, Investigations and Community Enterprise) Bill [Lords]

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Jacqui Smith: I have considerable sympathy with the hon. Gentleman's point that late payment can cause small businesses severe difficulties. That, of course, is why the Government have introduced a package of measures to assist small businesses, including the 1998 Act, which gave suppliers the right to claim interest for late payment and set a credit period of 30 days where no other credit period has been agreed. We strengthened the Act through the Late Payment of Commercial Debts Regulations 2002, which enable every business to claim a fixed sum of compensation for the cost of chasing bad payers, as well as giving them the right to claim interest.

In addition, we established the better payment practice group in conjunction with the small business community, including the Federation of Small Businesses, to promote the commercial and ethical benefits of paying promptly and to make credit management tools and techniques freely available.

Those Government actions have helped to improve the situation. In 1997, published data from the Grant Thornton European business survey showed that the average time taken in the UK to settle accounts was 49 days. By 2002, that had fallen to 41 days, compared with a European average of 50. So, we are doing better on this than our European competitors.

On Second Reading, the hon. Gentleman mentioned the performance league table of the Federation of Small Businesses. This Government's commitment to tackle late payment encouraged the federation to compile and publish a league table to show the average payment times of Britain's plcs and their larger private subsidiaries. As set out in schedule 7 to the Companies Act, directors are required to disclosed the average time taken to pay trade creditors. That information is then collected by the Federation of Small Businesses and published annually in a league

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table. I welcome those tables; they are an important measure. They contribute to the change in payment practice by showing small businesses how quickly they can expect to be paid when dealing with large customers.

Although I am sympathetic to the problems of collating the data in a meaningful way, as set out by the hon. Gentleman, I am not convinced that the solution is to introduce further regulation and increase the burden on companies, not least because the power that new clause 11 would give the Secretary of State is effectively already available under section 257 of the Companies Act 1985.

The Chairman: Order. I am sorry to interrupt the Minister . I am of the opinion that the Committee is concluding its consideration not only of the clause but of the Bill. I have power under Standing Orders to extend the sitting for a short time. Although it may inconvenience some hon. Members, I intend to do so as that will enable the Committee to conclude its business now, rather than having to come back this afternoon. I ask the right hon. Lady to conclude her remarks.

Jacqui Smith: Section 257 of the 1985 Act enables the Secretary of State to amend part VII of that Act. The Government have not yet thought it necessary to use that power to introduce a standard reporting format along the lines proposed by new clause 11 because there is no evidence that doing so would improve the quality and usefulness of the information given.

The record shows that our actions are bearing fruit. The new clause is therefore not necessary or desirable. However, we will continue to keep the situation under review, listen to the concerns of small businesses and hon. Members, and continue to make progress in tackling the problem of late payment.

Brian Cotter: I would strongly rebut almost every point made by the Minister, regarding in particular any improvement and the new clause not being necessary. I am very disappointed indeed, especially at the fact that we are discussing this measure so late in the Session. I do not believe in regulation, but a format for reporting information is required. I would wish to say more, but the Liberal Democrats have questions tabled for Trade and Industry Question Time in the House, which is due to begin in a moment. I shall

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conclude, but I will rehearse the argument at the next opportunity. I beg to ask leave to withdraw the motion.

Motion, and clause, by leave withdrawn.

Title

Amendment made: No. 3, in

title, line 1, leave out second 'and' and insert

', to the provision that may be made in respect of certain liabilities incurred by a company's officers, and to'.—[Jacqui Smith.]

Question proposed, That the Chairman do report the Bill, as amended, to the House.

Jacqui Smith: On a point of order, Mr. Conway. Committee proceedings are drawing to a close, but it would be remiss of me not to record my appreciation of how the Committee's work has been carried out. I thank you and your co-Chairman, Mr. Taylor, for chairing the Committee. I also express my appreciation to my hon. Friends.

I thank the hon. Member for Sutton Coldfield for trying so hard to provide us with a range of alternatives. I also thank our Liberal Democrat colleagues for engaging with the Bill in the correct spirit. I congratulate my hon. Friend the Member for West Bromwich, East (Mr. Watson) on successfully piloting his first Bill through Committee. Last but not least, I thank my officials for all their hard work in getting us to this point.

Mr. Mitchell: Further to that point of order, Mr. Conway. I echo the Minister's thanks to you and Mr. Taylor, your co-Chairman, for how you chaired the Committee. This is a highly technical Bill covering a large range of technical matters, and I am grateful for the long-suffering way in which you allowed us to range over them. I also thank the Minister for her courtesy. I congratulate the Government Whip, who clearly has an outstanding career ahead of him. I also thank the Hansard staff—on a Bill as technical as this, they perform what is an extremely difficult task.

Brian Cotter: I simply say, ''Hear, hear!''

The Chairman: I thank members of the Committee for their observations and their compliments to me and my co-Chairman, Mr. Taylor. I share the thanks that they expressed to the Serjeant at Arms team, our Clerks and the Hansard reporters. I also thank members of the Committee for their co-operation; both Chairmen are grateful.

Question put and agreed to.

Bill, as amended, to be reported.

Committee rose at twenty-nine minutes past Eleven o'clock.

The following Members attended the Committee:
Conway, Derek (Chairman)
Battle, Mr.
Cotter, Brian
David, Mr.
Efford, Clive
Farrelly, Paul
Fisher, Mr.
Mitchell, Mr. Andrew
Moore, Mr.
Smith, Jacqui
Soley, Mr.
Watson, Mr.

 

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Prepared 16 September 2004