APPENDIX 4: LATE PAYMENT OF COMMERCIAL
DEBTS REGULATIONS 2013 (SI 2013/395): ADDITIONAL INFORMATION
Information from Department for Business, Innovation
& Skills
Q1: On scope, the Committee would like to know
whether the provisions of the Regulations apply only to transactions
within the UK, or more widely across the EU.
A1: The Regulations cover England, Wales and Northern
Ireland only. Late payment is a devolved matter for Scotland and
the Scottish Government will introduce legislation to transpose
the Directive to cover that country (based on the SI prepared
for the rest of the UK).
For information: The European Commission considers
late/prompt payment to be a European Union wide issue and are
closely following transposition of the Directive in all member
states. They view its implementation as one of the corner stones
of the Single Market and European Commission Vice President Tajani,
responsible for Industry and Entrepreneurship, is leading the
late payment campaign across Europe. The European Commission believes
that, once introduced by all EU member states, the new rules could
mean an extra £150 billion being made available to businesses
across Europe, helping to relieve cash flow problems. You may
be interested to learn that the Commission has concentrated its
efforts on European Member States where late/prompt payment issues,
especially by the state, are particularly high, leaving the UK
and Nordic states to last.
Q2: On guidance, the Committee noted the statement
in the Explanatory Memorandum:
"Guidance on the new Regulations will be placed
on the BIS website by the end of February 2013. The Regulations
come into force on 16 March 2013 so there will be a period of
time for those affected to familiarise themselves with the Regulations."
The Committee considered that the period from end-February
to 16 March was in fact not long for companies etc to familiarise
themselves with the Regulations.
A2: The Directive is based largely upon UK legislation
that has been in place since 1998 and the UK is recognised by
the Commission as an exemplar across Member States, including
for the measures it has introduced to drive a culture of paying
according to agreed terms (the Prompt Payment Code, improved guidance
for suppliers and speedy public sector payment). The changes to
domestic legislation are small and harmonise our legislation with
the recast Directive. However, since 2010, current Whitehall Government
practice actually goes much further than the provisions in this
and previous Directives.
We have highlighted the changes since last September,
where we discussed them in the Consultation document and we produced
a table that formed part of the accompanying Impact Assessment,
that showed the current state of play against the changes in the
Directive (see page 8 of the IA: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/32706/12-1132-impact-directive-on-combating-late-payment.pdf).
This went out to nearly 300 Trade Associations and
business representative bodies; local authorities and other public
sector bodies as well as business and other interested parties.
Business has welcomed the Guide. Michael Fallon, BIS Minister
of State for Business and Enterprise has been leading a prompt
payment campaign since late 2012, getting FTSE companies to sign
up to the prompt payment code, whilst promoting changes to the
Directive.
13 March 2013
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