The SNP MP for Glasgow East, John Mason, has welcomed the news from the Scottish Government that a new clause is to be used in its contracts to require payment within 30 days to all businesses in the supply chain, particularly small businesses.

The East End MP has met with a number of locally-based small businesses since his election to Parliament in July 2008, and one of the issues that is most often highlighted is the problem caused when larger corporate clients delaying paying their bills.

While the Scottish Government is itself paying 92 per cent of its bills within 10 days - well within its target payment time - the new contract arrangements will mean that, where the Government contracts out work, the contractor will now be obliged to pay any sub-contractors quickly.

Commenting on the new contract clause, John Mason said: "There are many different Government contracts that involve goods and services supplied by Glasgow firms, both here in the East End and across the City.  They can include things from major road and rail contracts to office refurbishment projects.

"It is important that, when the Scottish Government issues these contracts, there is build-in protection for suppliers to the companies taking on government projects.

"At a time of global recession cashflow is absolutely critical to small businesses and this will give greater peace of mind that they will be paid promptly.  I hope that this new clause will help to encourage good payment practice right down the supply chain."

The Federation of Small Businesses' Scottish Policy Convener, Andy Willox, has also welcomed the decision saying:

"We are delighted that the Scottish Government has listened to our concerns and is taking this swift action.

"Small firms working on public projects deserve to get paid as promptly as their larger counterparts - ensuring that they do so could lift business survival rates and give Scotland's small business community a welcome boost in trading the country out of the current downturn."