My Lords, we seem to have reached the point at the end of the first part of the Bill where many of us feel a little discouraged. The powers in the Bill for the Small Business Commissioner are not going to match the aspirations that have been trotted out on a number of occasions across the first 43 amendments that we have looked at. The only concession or move in any direction is the one we have just had, for which we are very grateful. We do not want the Minister to change her mind on that. However, I feel that on Report we may want to test the water again on the question of whether some stiffening of the approach, attitude and powers of the Small Business Commissioner could be configured into the Bill.
However, the growing awareness that the Minister was not for moving and that the department had drawn a line in the sand and would not be able to cross it prompted a wider thought about what we could do in other areas. Amendment 44 seeks—probably in rather infelicitous language which needs to be tidied up—to do something which at heart is quite straightforward and simple, and perhaps not contentious. If noble Lords think about the way in which individual
statutory accounts are drawn up, they will find in the profit and loss accounts of most companies a record of the liabilities which are owed and the debtors who owe money to the company. Part of those making up the accounts in the liabilities area are payments which need to be made by the company to its suppliers. It is probably the case that these will appear as a single lump sum and will not be differentiated. It might be a smart move and aid transparency if it were possible to require companies that had outstanding liabilities at balance sheet date to be required to disclose by note situations where their invoices had been accompanied by any overdue fees or costs that occurred as a result of the invoices being overdue.
We have had some work done on this. We calculate that in a year, when you look at the statutory accounts registered at Companies House—obviously they are delayed, so we are talking about a nine-month gap to look back on, which is quite a lot of time—an approximate figure is around £15 billion outstanding at balance sheet date. The noble Lord, Lord Cope, who was also an accountant as I was, is looking a bit stern about that, but as far as I understand it, that is the figure. I make no judgment on it, it is simply the way that business operates, which is that it takes time to make payments.
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If we make an assumption that some of these invoices were late, and the provisions that could be made in relation to that were added on to those, then we reckon that about £900 million a month would be available to be disclosed for companies that had overdue invoices and had accumulated, say, at 8% above base rate, which would be the fee if they did not pay within, in our suggestion, 30 days, although it could be 60 days. Obviously it would be a variable figure, but to make my point, we are talking about approximately £1 billion that could be regarded as being the cost to the economy—certainly a cost to smaller businesses—of invoices that have not been paid. If that were disclosed, the question is whether that would help transparency, and our argument is that it might. It would be particularly helpful, if it was necessary to do so, for auditors auditing these accounts and coming across this overdue amount within the portfolio of liabilities to have to contact the Small Business Commissioner and inform her or him about it so that a virtuous circle is created. Where there was a problem in a small business that was due money that was not there, it would have some sense of that because the information would be available to the Small Business Commissioner.
The great advantage would be that it would shine a light on larger companies that were not paying their invoices on time, and thus accumulating late payment costs which would have to be disclosed in the statutory accounts. It would not cost anything to do this because it would be done automatically anyway by any good internal accountant, and the information would be absolutely fantastic for the Small Business Commissioner. Our contribution to getting around this power blockage in the Government’s mind in terms of the Small Business Commissioner is to use existing disclosure arrangements for small companies and large companies—
the published accounts—to report on and note the activity that is actually going on in this sector. I beg to move.