| Previous Section | Index | Home Page |
Mr. Boswell: Has my hon. Friend noticed the correlation between the propensity of a country to pay bills on time and the level of public debt incurred by its Government in the context of the Maastricht criteria?
Mr. Fabricant: My hon. Friend entices me to go where I had not intended to go--so as not to be out of order, I shall be brief in response.
The Prime Minister said this afternoon that there had been no fudge over the euro, but Helmut Kohl has stated that Belgium and Italy have the worst public debt and should not enter the single currency. It is interesting to note that Belgium and Italy come near the bottom of the list of payment records internally and overseas. Payment
is a cultural and educational issue--if the Bill has any effect, it will be to educate people on the importance of paying bills on time.
Small companies in sunrise businesses need protection. I recall that, when my company was very small, we supplied equipment to firms such as GEC and the BBC. The irony is that Radio Uganda was the most prompt in paying bills, which gives a new slant to the phrase Ugandan relations--my Ugandan relations were very good, as Radio Uganda paid its bills within eight days, whereas the BBC paid its bills over 120 days. If it had not been for the contracts that my company had in east and southern Africa, we should not have been in business for long.
It would be no bad thing if the Bill encouraged larger corporations such as GEC to pay up on time. The problem is, as I said, that it does not go far enough. Its main strength lies in clause 8, despite which, as the House of Commons Library report said:
Mr. Tim Boswell (Daventry):
There are occasions in the House when it is not entirely necessary to be curmudgeonly, and I do not intend to be so now, either by speaking at great length in a debate that has rehearsed the principles thoroughly, or by advising my hon. Friends--unless they are so disposed--to oppose Second Reading. That, of course, will be to some extent contingent on the Minister's reply, but we are doing our best for her.
Our position of what may be called sceptical acquiescence in the Bill arises from the fact that we are very anxious not to send a signal to the business community that could be interpreted, even inaccurately, as saying that we are in favour of a late-payment culture. We are not in favour of such a culture; we deprecate it as much as the Minister does. My late father, a business man from whom I learned many things on how to conduct my own business, was firm in insisting that bills be paid on time. There may be some who find it difficult, physically or because of the bank, to pay bills on time, but it was always my father's practice to do so, as I am sure it is of hon. Members who have business experience.
I shall sketch one or two general points before I comment on individual contributions to the debate. As almost all hon. Members said, the Bill is no panacea--I notice that the Minister is nodding in
agreement. We need not go round the course again on who said what to whom, or who has changed his or her mind on a particular occasion. As the Minister said, almost 60 per cent. of lobby groups representing smaller businesses are opposed to a statutory right to interest--there is clearly a difference of opinion in the business sector. I do not say that opinions do not change over time. I am sure that business and trade organisations approximate themselves to the way in which the wind is blowing as developments occur--as, indeed, they have done to some extent on the national minimum wage proposals. None the less, the Bill is neither a universal panacea nor universally wanted by the business sector.
Another general point, which has been implicit in many of the contributions to the debate, is that the problem that businesses identify in the conduct of their business concerns not interest on late payments but late payment itself. Businesses do not want payment to be delayed. There is no question that large, or public sector, customers will not be good for the money sooner or later, but there is irritation when a large and sophisticated organisation cannot pay. In the case of small customers, however, there is a genuine worry about whether the money will be paid at all--that is probably the major concern of many small businesses, which typically deal with other small businesses.
If the problem is late payment, the provision of statutory interest cannot be a sufficient solution; it may alleviate matters or soften the blow, and it might even help with the cash, albeit rather late in the day, but it does not solve the problem of a late payment culture.
The choreography of the debate has been interesting. The Minister, commendable as she is, has been on her own throughout. Her four ministerial colleagues in the Commons have not even looked in to see her. She has been supported by one Labour Back Bencher, and broadly supported by one Liberal Democrat Member.
My hon. Friend the Member for Chesham and Amersham (Mrs. Gillan), by contrast, was supported by both shadow Ministers, as well as others who have looked in on parts of our debate, and four of my Back-Bench colleagues have made weighty contributions. That suggests that, in the "speak your weight to small business" campaign, there may be a certain imbalance between the parties; that will be noted elsewhere.
I do not mean in any way to criticise the hon. Member for Putney (Mr. Colman), who has had a distinguished, in-depth business career over a long period and spoke interestingly. Predictably--I do not blame him--he supported the Bill. I am pleased that he was in favour of a prompt payment culture. He mentioned factoring, which is an important part of modern business practice--the son of one of my cousins is a distinguished factor--and, in some interesting remarks about the balance of advantage in the Bill, he conceded that there was no panacea.
Mr. Fabricant:
I recognise the valuable work that factoring does in assisting the cash flow of small businesses, but does my hon. Friend accept that sometimes factoring companies can be heavy-handed when small businesses are the ones who owe the money? Sometimes they can be so heavy-handed as to drive into bankruptcy small businesses that could have become large businesses.
Mr. Boswell:
My hon. Friend points up the dilemma precisely.
The hon. Member for Weston-super-Mare (Mr. Cotter) did not deal with matters in precise chronological order. He produced some slightly unconvincing evidence in support of the Bill and developed his criticisms of it at some length.
I speak from the relative safety of possibly not being involved with the Bill in Committee. I may be anticipating, or even sending a message to the Committee of Selection. The Minister knows how much I enjoy Committee work, but it is not possible to split oneself in two and make two speeches simultaneously. That said, I have never come across a Bill that was more requiring of attention in Committee. Hon. Members' concerns need to be properly discussed.
The Minister will have noticed some variation in emphasis and enthusiasm for the Bill among Conservative Members. My hon. Friend the Member for South-West Hertfordshire (Mr. Page), in a distinguished and fluent contribution, explained the problems and clearly expressed some reservations that I share, when he warned the Government about overselling the measure. He said that it should not be regarded as a philosopher's stone that would automatically remove all business problems, or even the problem of late payment.
My hon. Friend spoke interestingly about measures taken during his stewardship of these matters to stimulate the private sector to improve its own business practice, and also mentioned the record of improving the Government sector. I remember, from my own time as a Minister, that there was a need for improvement. We began to change the culture, and not before time.
The House should consider the current Government's record on compensation for confiscated firearms. We debated the matter early in the Government's life, and pointed out to the Minister of State, Home Office, the hon. Member for Cardiff, South and Penarth (Mr. Michael) that the Prime Minister, when in opposition, had committed Departments broadly to payment within 30 days, but that, even in straightforward cases, there had been a delay of up to six months. That is not good enough, and I hope that it will never happen again.
My right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) said that, if asked whether they would like to get interest on money owed to them, small businesses "would say that, wouldn't they?" I have been in business, and I would love to have had that interest, which would possibly even have helped once or twice. As ever, these matters are not simple and there may be a price to pay.
My right hon. Friend rightly asked whether there were limits to the cases in which intervention could deliver the commitments now made by all political parties to deregulation, and went on to say that intervention in contract law could pose as many problems as it sought to solve.
My hon. Friend the Member for Croydon, South (Mr. Ottaway) and, in his own distinctive way, my hon. Friend the Member for Lichfield (Mr. Fabricant) were perhaps warmer towards the concept of the Bill. The former identified some of the real concerns about late payment, and the latter wondered whether the Bill went far enough. His contribution was very entertaining.
Conservative Members have some controlled scepticism about whether the Bill will materially redress the problem, which we clearly recognise, without causing
problems of its own. We are not rubbishing the Bill and will allow it to go to Committee, but we want it to be carefully scrutinised there, so that the problems can be further exposed. There must be a proper process of public education about how the legislation is to work. If it is to work properly--and we wish it well in that sense--it must be understood by the business sector.
The more I have listened to the debate--and especially to the contribution of my right hon. Friend the Member for Bromley and Chislehurst--the more I have realised that the Bill amounts to an intrusion into contract law. The Minister regards the Bill as very much in the interests of fairness and as building on the Unfair Contract Terms Act 1977, but it goes much wider than that.
It seems to me that the impact will be rather contingent. It is not clear to me--I am not a lawyer, and the Minister is--whether it is seriously intended that attempts will be made to attack contracts made between parties other than the original supplier and customer, if the customer switches to another supplier. The only possible way in which one could go down that road would be by specifying national contract terms and having a single model contract. I am not sure whether the Minister wants to do that, but if she follows her own logic she may be driven that way.
"It will still remain for any business to decide whether it wishes to exercise the right to statutory interest or not, but this decision will be voluntary not coerced."
The implication is that, once again, large firms will say to small firms, "If you want the contract, you will not exercise your right under the Bill to impose interest charges if payments are not made on time."
| Next Section
| Index | Home Page |