LATE payments campaigner, and MP for Oldham East and Saddleworth, Debbie Abrahams, proposed a 10-minute rule bill on Tuesday calling for payments on government and public authority contracts to be made through a “project bank account” system.

Ms Abrahams, created the award winning Be Fair - Pay on Time campaign in 2012, and proposed the bill - titled Public Sector Supply Chains (Project Bank Accounts) Bill - to help ensure small businesses were paid directly and promptly, while also protecting them against losses, such as those created by the collapse of the construction giant Carillion one year ago to the day.

She also set up and chaired a late payments inquiry in Parliament in 2013, and said of the bill: “My bill aims to set in law the requirement that all parties delivering government and public authority work, from the lead contractor right down through the supply chain, will receive payment from the same secure ‘pot’ of money.

“Late payment by large businesses is a massive issue across all business sectors leading to billions of pounds being owed to smaller companies for work that has been done.

“When payments take a long time working their way along a supply chain from the contracting authority there is a risk that the cash could be cut-off at any time because of payer insolvency.

“We witnessed the catastrophic effect this has with the collapse of Carillion, a year ago to the day, with £2 billion of unpaid invoices to their smaller suppliers. The precarious position of other major Government contractors like Interserve means urgent action is required.

“That’s why my ten minute rule bill will require all government and public authority work be paid to suppliers using project bank accounts.”