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Small Business (Late Payment)

Andrew George (St. Ives): If she will make a statement on the late payment of debts to small businesses. [136684]

The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths): As a result of action taken by the Government since 1998, including the Late Payment of Commercial Debts (Interest) Act 1998, the creation of the better payment practice group, the provision for small businesses to claim debt recovery costs and giving small and medium enterprise organisations rights to challenge unfair contract terms on behalf of their members, I am pleased to tell the House that the average time taken to settle debts in the UK has reduced by more than a week, and is nine days less than the European average.

Andrew George : I am pleased to hear that the Government are taking a robust line on late payers, but what are they doing about one of the worst of all late payers, namely, themselves? Only last week, for example, the Department for Environment, Food and Rural Affairs admitted that £50 million is still owed to contractors who were involved in the clean-up after foot and mouth two years ago. Many of those companies are perilously close to bankruptcy, so when will the matter be cleared up, and will the companies be entitled to a statutory right to charge interest on those late payments?

Nigel Griffiths: Let me tell the hon. Gentleman which companies will not be entitled to claim that statutory right: those who are perpetrating or seeking to perpetrate fraud against DEFRA. The hon. Gentleman and the House will know that my colleagues in DEFRA have paid out many hundreds of millions of pounds, but they are challenging the many fraudulent claims. I am happy to tell the hon. Gentleman that in general the Government's payment record is 94.83 per cent. on time-up 3 per cent. in the past seven years.

David Taylor (North-West Leicestershire): In a far-off life when the working week was only 60 or so hours, I had a good number of clients who were in the construction, textile and haulage industries. In terms of late payment, their main difficulty was that most of their income derived from a single client. Will my hon. Friend tell the House how, in those circumstances, the worthwhile changes that have been made can actually be used to extract faster payment? People are unlikely to bite too quickly the hand that is feeding them with most of their revenue.

Nigel Griffiths: That is a real concern and I am sure that all hon. Members are aware of it. That is why we have taken several specific actions. The first is to allow representative organisations to take what might be considered a class action-I use the term loosely-on behalf of the companies, to overcome the fear factor. Secondly, when hon. Members raise cases with me I have undertaken to write to the large and powerful organisations that appear to be delaying payment. I am pleased to see that, in general, payment times are speeding up. We keep the matter under review, and the better payment practice group meets regularly to advise us on improvements.

Mr. Andrew Mitchell (Sutton Coldfield): But in spite of the Minister's judicious and careful use of statistics, he knows perfectly well that Departments are among the worst offenders. In the interests of open government, will he publish a league table to name and shame those Departments that are the worst offenders in this respect?

Nigel Griffiths: I am not sure where the hon. Gentleman has been: such information is published. It is put in the public domain and in the Library. I completely reject the hon. Gentleman's assertion about Government payment. As I said, the record is 3 per cent. better than under the last Administration, so perhaps the hon. Gentleman can tell the House what he did at that time to make it so bad then.