Minister for Economic Development 19.4.02


Small and Medium-sized Enterprises
Alison Halford:

 What action has the Minister taken to help SMEs cope with unexpected and temporary cash flow problems which are caused by a variety of reasons, not least late payments by customers and contractors, but can lead to devastating and sometimes terminal consequences for an otherwise thriving business? (WAQ17138)

Andrew Davies:

 The management of a company’s cash flow is a matter primarily for the owners of the company and they are advised to seek early advice from their own professional advisors if they foresee any problem.While this is a commercial matter, the UK Government has recognised the devastating effect late payment can have on SMEs in particular, and in 1998 introduced the Late Payment of Commercial Debts (Interest) Act 1998. The measures within the Act have been introduced gradually, with emphasis in the first four years on giving SMEs the ability to claim interest for late payment. SMEs can now claim interest on late payment from any business or organisation. A thorough explanation for businesses on how to claim interest and how to improve their credit management can be found on www.payontime.co.uk.
The aim of this legislation is to try to improve payment periods and hence remove one of the major causes of insolvency. However the overall responsibility still lies with the SME owners for the management of their affairs.


Deregulation of the Energy Market

Alison Halford:

 What action has the Minister taken to ensure that north Wales businesses take full advantage of the deregulation of the energy market? (WAQ17142)

Andrew Davies:

The new electricity trading arrangements were introduced to address some of the fundamental weaknesses of the wholesale electricity trading arrangements following deregulation. These included: wholesale electricity prices that had not fallen in line with reductions in generators’ input costs, a lack of demand-side participation, and inflexible governance arrangements that had prevented reform of the arrangements. The new electricity trading arrangements address these weaknesses and deliver significant benefits to businesses as there is more scope for active demand-side participation in the market. The new electricity trading arrangements have brought about reductions in wholesale electricity prices and hence lower prices for both industrial and domestic customers in north Wales and throughout the UK.

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