Mr and Mrs Langstaff of Deal own a car body repair business in Deal and have told me about the problems when insurance companies do not pay out on time. I realised it is a very big issue that is affecting small businesses across the country and I want to see somehting done about it.
I asked the Business Minister about this;
What steps he is taking to ensure that small business suppliers are paid promptly by large businesses and by government?
Michael Fallon: I have written to all the FTSE 350 companies urging them to sign up to the prompt payment code. Signatories must pay their invoices on time to maintain membership. Three quarters of FTSE 100 companies are now signatories, and over 1,400 large companies have signed in total.
Charlie: Last year a Federation of Small Businesses report showed that 40% of small businesses had faced problems with payment from Government agencies and quangos. Will the Minister make the prompt payment code mandatory for all public sector organisations and consider budget cuts for persistent offenders?
Michael Fallon: There is now a statutory obligation for all public bodies, including the NHS and local authorities, to pay invoices within 30 days.
Charlie: The late payment of commercial debt regulations provide for a 60-day payment period, unless agreed and not grossly unfair. Will Ministers consider a longstop date of 90 days to give small businesses certainty?
Michael Fallon: I know that my hon. Friend has continued to raise the case of Mr and Mrs Langstaff in his constituency. The "Insurance: Conduct of Business" rules require insurers to handle claims promptly, and redress is available through the Financial Ombudsman Service if they do not do so. I note that a number of insurance companies have now signed the prompt payment code.
It has been an honour and privilege to serve as Member of Parliament for Dover & Deal. I hope to be re-elected to serve our community for another term.
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