My Lords, I am encouraged that these amendments have triggered a long and very useful debate on late payment issues. I was struck by my noble friend Lord O’Neill, who spoke so persuasively
about the central principle behind our amendments, which is to ensure that measures designed to help small businesses really and truly do so. It is in that context that the objections raised by the noble Lord, Lord Stoneham, around over-regulation have to be seen. There is no point in legislating if the legislation does not achieve its aims. When we look at the size and scale of late payments, the extension of how long it takes for payments to be made and the drift over a number of years, unless we have measures that really will change this situation, we will fail to achieve those aims. It is important that what we do is effective and I do not think that an objection to making something effective is simply to say that it constitutes over-regulation.
Important points have been raised about some companies where there are consequences and cashflow difficulties, but the comments made by my noble friend Lord Mitchell are important. The price is the price and the time you should pay is the time you should pay. If there are problems, there should be an opportunity for companies to talk together and address them, but it should not be a case of taking unilateral measures or that these issues can be dealt with only through lawyers and the courts. We suggest that there should be effective discussions between the parties and that power relations which affect that sort of discussion should not be exercised unilaterally.
The noble Lord, Lord Cope, raised a number of points which address some of the issues, but they did not fundamentally address the problems that we are trying to deal with—namely, the asymmetry of power. In relation to the issue of the burdens, much of what the Government are proposing and we are proposing could actually be achieved through software packages that are already available. I think that the preparation of these reports would be a lot more pleasurable than VAT returns on a quarterly basis.
I want to say in relation to Amendment 5 that I was impressed with the Grant Thornton document. It certainly identified the costs which it suggested could be taken out. I actually thought that it would be the largest beneficiary of those costs, and it is impressive to see an accountancy firm not supporting the position of its own fees. I thought that the document was a very useful introduction to the debate. However, the costs are still significantly lower than the benefits identified by the Government, so I would say even within that context that I cannot see the strength of the case. We therefore are strongly of the opinion that this needs one definition.
I am grateful to the Minister for what she has said. We are encouraged by some things and discouraged by others. We are certainly encouraged that as regards Amendment 3, there is an assurance that “may” will become “shall”, and that it will perhaps morph into “shall” in the drafting. We are also grateful for her reassurances on some particular measures, and in relation to the overall aims that we are both trying to achieve. In relation to the consultation, which we look forward to reading, we would request, however, that we are not looking at an edited summary but more extensive reporting of the fuller sense of the discussions.
I have to say that some of the other measures still do not address fundamental problems. It is not the case that these charges are frequently imposed by consent, as was mentioned in relation to Amendment 10; they are dealt with unilaterally. That has been under-emphasised. On Amendment 9, the responses indicate that penalties would not be of benefit. That is understood within the context where the companies would have to be the ones that tried to achieve those penalties, which would not be of benefit—there is no doubt about that. We are trying to make sure that the obligations are changed so that companies see that it is of benefit to make the payments. In that way, we are addressing the issue of culture change. Transparency and information are a necessary but insufficient condition to make that change, and given the position of small businesses and the amount of money outstanding, we have to be conscious that these measures would succeed significantly in providing economic change.
However, we still have some matters to consider, some responses to receive and some greater opportunity for the Government to look at this matter. Although I am sorry that the Minister cannot accept our proposals, I hope that she can do so in due course. The message that goes out from here should not be that this side is the only one that really believes in getting things done and is on the side of small businesses. I beg leave to withdraw the amendment.