The Federation of Small Businesses (FSB) has announced a new campaign ahead of the Chancellor’s Spring Statement designed to fight against poor payment practices among big businesses.
The Fair Pay, Fair Play campaign calls on the Government to enlist the help of Non-Executive Directors, strengthen payment enforcement and adopt Project Bank Accounts in public procurement.
Commenting on the campaign, FSB National Chairman Mike Cherry said its recommended reforms will help end the poor payment crisis in the UK.
It comes after recent research revealed that some 84 per cent of small firms report being paid late, while a third (33 per cent) said at least one in four payments they are owed arrives later than scheduled.
The campaign’s three key reforms look to strengthen the relationship between small firms and big businesses by assigning non-executive directors responsibility to prevent late payment. It would be the assignee’s obligation to produce a summary of their activity for the company’s Annual Report, as well as form committees to improve payment practices.
The FSB is also asking all public firms to sign a strengthened Prompt Payment Code, which would bind them to strict payment terms and expose them to penalties should they fail to comply.
Mr Cherry said: “For far too long some big businesses have been allowed to get away with poor behaviour that has seen them use their dominant position to bully and squeeze our small firms.
“This behaviour has forced many small businesses to take drastic steps like turning to personal credit cards and overdrafts, just to survive the wait for a payment. Sadly, some don’t survive this wait.
“In last year’s Spring Statement, the Chancellor listened to FSB and promised to act on the late payments crisis. As this year’s Spring Statement approaches, small businesses want him to follow up these words with tangible actions. Our reforms are not the silver bullet that will suddenly signal the end of poor payment practices but are certainly important and necessary steps towards this. I am calling on all politicians and big businesses to back these reforms and show that they believe in fair pay and fair play.”