Late Payments Of £20bn Cripple Small Business - Cotter

12.01.00pm UTC (GMT +0000) Tue 29th Jun 2004

Brian Cotter MP, Liberal Democrat Shadow Small Business Minister

The late payment is costing British business £20 bn a year, according to a new survey published today. Brian Cotter MP, Liberal Democrat Small Business spokesman, is calling for tougher action to stamp out the late payment culture, which drives an estimated 1 in 4 small firms out of business.

He has written to Companies House demanding an investigation into why larger companies appear to be flouting late payment laws.

"Over half of the FTSE 100 companies appear to be flouting rules which require them to disclose their payment performance in annual accounts.

"Current legislation is obviously failing to help most businesses. 87% of firms fear that payment risks will either remain the same or get worse.

"Tougher penalties must be imposed on those companies failing to disclose details of their payment records, and those PLCs that consistently fail to pay their bills on time should be named and shamed in an annual register.

"Unless the Government gets tougher with late payers, large companies will continue to throw their commercial weight around and fail to pay small suppliers on time."

ENDS

Notes

• The new survey published by Intrum Justitia shows that just 53% of invoices in the UK are paid on time and that 89% of companies have suffered from late payments.(http://www.intrum.com/files/European%20Payment%20Index%202004%20-%20Spring%20Report.pdf)

• The Federation of Small Businesses (FSB) estimates that late payment causes 1 in 4 businesses to go bust http://www.fsb.org.uk/news.asp?REC=P2004/15

• Using the Private Sector Payment Performance League Tables 2003/4 (http://www.cmrc.co.uk/pages/02_research/leaguetables.htm ) which are jointly published by the Federation of Small Businesses (FSB) and the Credit Management Research Centre, Brian Cotter has identified that 57 FTSE 100 companies are not included in the tables and therefore no record of their average payment period appears to have been included in their annual accounts. He has now written to Companies House demanding an investigation.