A government minister has described the practice of failing to pay businesses on time as “an outrage.”
Small Business Minister Margot James was speaking at the Conservative Party Conference this week and the MP made it clear that large companies had an obligation to pay the sums they owed smaller outfits as promptly as possible.
She described the culture of late payment – which can place considerable strain on the finances of those chasing invoices and, in the most serious cases, push them into insolvency – as “a blight” on smaller employers.
Ms James was speaking at The Economics Interview, an event which was part organised by the Federation of Small Businesses (FSB) and aimed to address some of the key issues facing firms today.
Acknowledging there was a lot of anger about late payment and the failure of many corporations to take the issue seriously, the minister cited a number of policies which she hoped would address the situation.
These include changes to the Prompt Payment Code (PPC), which encourages larger companies to report on payment practices and give an undertaking to hand over the money they owe within 30 days of being billed.
A Commissioner of Small Businesses will also be appointed to adjudicate in payment disputes.
“The majority of companies play by the rules although I do think there has been a problem of slow payment which is not playing by the rules,” said Ms James.
“We have some companies…whose absolute focus on maximising the return for shareholders is obliterating some of these other important things.”