DTI pressed for late payment law: Business forum introduces register

Click to follow
The Independent Online
THE Forum for Private Business is calling on the Government to kick-start the UK economy either by forcing businesses to pay pounds 50bn worth of overdue payments or confronting them with interest on the outstanding bills.

Politicians and business leaders backed the launch of a national Prompt Payment Supporters' Register yesterday, aimed at persuading the Government to introduce legislation for interest on debts.

The FPB launched the register at a signing ceremony attended by Labour and Liberal Democrat MPs and executives from Marks & Spencer, Midland Bank, Coopers & Lybrand and Dun & Bradstreet, the business information group.

Steve Hill, an insolvency partner with Coopers, said smaller firms were owed pounds 50bn in overdue commercial debt, compared with the pounds 44bn that small businesses have borrowed from banks. 'Instead of all this free credit to customers, these firms could be investing that money in British industry,' he said.

Stan Mendham, chief executive of the FPB, which represents 21,231 private firms, said: 'The Government constantly reminds us of its own pounds 50bn deficit, but hypocritically ignores the same burden of debt currently crushing small businesses. If only it were to release this money into the bank accounts of small businesses by introducing legislation, the boost to the economy would soon wipe out the Government's borrowing requirement.'

A spokeswoman for the Department of Trade and Industry said legislation had not been ruled out. 'No decision has been made. This subject has been an ongoing thing for some time. There is concern that legislation may not necessarily work. We are considering the views of all people.'

Most support for reform has come from smaller firms that are in a weak position when demanding prompt payment from larger customers.