Government to weigh in on late payment and supply chain bullying

The Federation of Small Businesses is assembling an influential cross-party group of MPs to identify possible solutions to the deterioration of payment practices in the UK.

Last month a number of large companies, including Premier Foods and 2 Sisters were identified and criticised by the FSB for ‘supply chain bullying’.

Recent research by the Federation of Small Businesses (FSB) reveals that almost one in five small businesses has been subject to some form of poor payment tactics.

Five per cent had experienced the so called ‘pay to stay’ practice used by Premier Foods, who asked suppliers to pay a flat fee in order to be considered for future contracts.

The cross-party parliamentary roundtable will be co-hosted by the FSB and the All Party Parliamentary Group for Small Business, and held on January 20.

FSB national policy chairman Mike Cherry says, ‘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.’

Debbie Abrahams MP, who is hosting the event and has previously convened her own cross-party inquiry into the issue adds that late payment is something that CEOs and board members in big businesses can influence and that a late payment culture in a company is set at board level.

‘That makes it a leadership issue and 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. 

‘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.’

Further reading on late payment

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