IN A unique move, an Oldham MP has teamed up with business experts and MPs to identify possible solutions to deteriorating payment practices in the UK.
Debbie Abrahams, MP for Oldham East and Saddleworth, has joined forces with the Federation of Small Businesses (FSB) and an influential cross-party group of MPs to investigate the issue.
Recently, a number of large companies including Premier Foods, 2 Sisters and AB InBev were identified and criticised by the FSB for supply chain bullying.
Mrs Abrahams led her own cross-party parliamentary inquiry into late payments in 2013 and launched a ‘Be Fair, Pay on Time’ campaign.
Now, she chaired the round table session, which included the FSB and the All Party Parliamentary Group for Small Business.
She told participants: “Late payment is still a major issue with £40bn currently outstanding.
“It is something that CEOs and board members in big businesses can influence and I have always maintained that a late payment culture in a company is set at board level.
“It’s time that deliberately paying late, finding ways to pay late, or making unilateral changes to pre-agreed contracts is seen as being as unethical as tax evasion.
“It’s simply a case of big businesses using smaller businesses as a credit line by applying bullying tactics that are unfair and have the knock-on effect of stifling growth in the economy.
“As politicians we must work to change business culture and make it unacceptable to pay contractors late as well as shifting the burden of having to take legal action away from the victims of late payment practices once and for all.”
Those who attended the event included Anne Marie Morris MP, Chair of the Small Business APPG, Tessa Munt MP, Parliamentary Private Secretary to Business Secretary Rt Hon Vince Cable MP and Mike Cherry, FSB National Policy Chairman.
Mike Cherry, FSB National Policy Chairman, said: “It is simply unacceptable for any company to exploit its market position to enforce unfair and unreasonable payment terms.
“The money outstanding in late payments is in the billions and has consistently grown larger and larger.
“We need greater leadership from all parties competing to be in the next Government to toughen up the prompt payment code and improve the UK’s payment culture.”
Recent research by the (FSB) revealed almost one in five small businesses had been subject to some form of poor payment tactics.
And five per cent had experienced the ‘pay to stay’ practice used by Premier Foods, who asked suppliers to pay a flat fee in order to be considered for future contracts.
Anne Marie Morris MP, Chair of the Small Business All Party Parliamentary Group, said: “We must continue to do more to ensure small businesses are not endangered because of late payment, even if this means more mandatory measures need to be put in place.”
Find out more about Debbie Abrahams’ work and campaigns on her website.
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