Lib Dem MP Brian Cotter - Name And Shame Big Firms Who Pay Late

5.08.16pm GMT Wed 21st Jan 2004

Larger companies who persistently make late payments to suppliers should be named and shamed on a register, according to Liberal Democrats.

A survey carried out by Bank of Scotland Corporate Banking found that almost half of small businesses have been forced to take legal action against late or non-payers.

Despite legislation to address the issue of late payments, many owner-managers view levying a late payment charge, on a client, as commercial suicide. This leaves many businesses with no choice but to sit and wait until bigger businesses decide pay up.

Responding to the survey, Liberal Democrat Small Business Spokesman, Brian Cotter said: "Many larger companies are still flouting legislation which requires them to disclose the time taken to pay their commercial bills."

"Those that fail to pay on time should be named and shamed in an annual list, so that small firms can judge their payment record and make an informed decision before entering into business with them."

"It is estimated that large companies owe small businesses a net debt of around £20bn, which is driving around 10,000 smaller firms out of business every year."

"It is little surprise that larger businesses are failing to toe the line, given the fact that the Government are failing to lead by example."

"DEFRA still owes £55 million to foot and mouth contractors, many of whom are small firms that face going under because they have been waiting up to 700 days to receive payment for the work they carried out on the Government's behalf."

ENDS

Notes to Editors

• The survey from Bank of Scotland Corporate Banking interviewed 1,000 small businesses, half of whom had waited up to a year to receive payments for their goods or services. A quarter of respondents had waited up to two years to receive payments.

• The survey also showed that many small firms are failing to take advantage of the Late Payments Act (1998), which gives small businesses a statutory right to claim interest at 8% above the existing Base Rate on overdue invoices.

• Written parliamentary answers supplied to Brian Cotter on the 6th January revealed that DEFRA still owes foot and mouth contractors £55 million and has spent £19.81 million investigating the validity of the claims.

• Research conducted by the Better Payment Practice Group (BPPG) showed that in 2002, only 3,243 UK PLCs reported their payment times, despite being required to do so by the Companies Act (1985). This represented a 21% fall in payment reporting based upon 2001 figures. Although the Group will be conducting further research in the near to see whether matters have improved, they claim that they have no information which suggests that the situation has improved to date.