According to The Guardian, the shadow business secretary Chuka Umunna, has proposed automatic sanctions for big companies that fail to pay their smaller suppliers on time. Labelling the UK’s late-payment culture as “outrageous,” Mr Umunna declared that a future Labour government would consider the possibility of banning companies from public contracts should they have a history of late payments.
The shadow business secretary announced a series of measures to battle the late payments culture in the UK at the annual conference of the Federation of Small Businesses. Mr Umunna said, “So, the next Labour government will expose those who pay late and we will seek to put in place a regime that will automatically trigger action against late payers, perhaps by preventing them winning public contracts and through reporting requirements on payment performance in their company accounts.”
A SmartDebit commented: “The calls from the shadow business secretary are positive. However, recent figures issued by Bacs revealed that businesses across the UK are currently owed £36.5 billion in late payments, affecting one million small and medium-sized businesses. Small businesses are the lifeblood of the economy but many are forced into liquidation, unable to maintain their cash flow. The government must act now to help reduce this collective debt.”
He continues, “Prompt payment is a core value within the Direct Debit industry, with businesses and consumers benefitting from timely payments since the scheme’s inception 40 years ago. We urge all businesses to review the potential payment services available to help improve cash flow.”
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