Lobbyists for special interest groups invariably demand tough action from government in favour of their particular cause – often seeking new legislation. Yet as small businesses have found out to their cost, even when such legislation makes it on to the statute book, there's no guarantee it will have the desired effect.
Seven years ago, after years of complaints from SMEs fed up with their cashflow being squeezed by bigger business partners, the Government passed the Late Payment of Commercial Debts Act. The aim was to speed up payments, particularly to vulnerable smaller companies. Unfortunately, the legislation has not delivered.
Research from Experian, the credit reference agency, shows that, on average, the typical British company now takes 60 days to pay its bills, a full two days longer than it did prior to the change of law in 2005.
As ever, it is SMEs that suffer. They take less time to pay their own bills – an average of 59 days – but have to wait more than 80 days for payment when working with a large company. And for every type of business, Experian's research suggests that the problem of late payments is getting worse rather than better. This year's figures are a marked deterioration on the position last year.
So what can be done about the problem, which groups such as the Forum of Private Business believes is driving otherwise viable SMEs to the wall? Well, the Government's response has been to reform a working group that disbanded four years ago after failing to persuade ministers to take further action on late payments.
Mark Prisk, the Business minister, insists that this time around, the late payment working group will be taken more seriously in Whitehall – but clearly, it is going to take some time to achieve anything meaningful.
In the meantime, Mr Prisk's government has disappointed many SMEs by failing to fast-track a new European directive on late payments into law. Ministers had previously suggested the legislation, which will set 30 days as the standard bill payment term, would be introduced this year – now they say the directive won't come into force until 2013, when it takes force across Europe.
Still, the last attempt at tackling the late payments problem with legislation suggests that without meaningful penalties, such initiatives are doomed to failure. And as one of the biggest contractors with the private sector of all, government does have real power. A ban on companies that repeatedly pay bills late from bidding for public-sector contracts might be just the stick that's needed.
Fluorite miner gets teeth into South African operation
Fluorspar, or fluorite, is not a mineral with which many people will be familiar, but it is used in products ranging from toothpaste to non-stick frying pans, as well as in industrial processes such as aluminium manufacturing. And one of its leading producers is a British company listed on the Aim.
Fluormin got its listing through a reverse takeover of Mahgreb Minerals last September, and has assets in South Africa and Tunisia.
In the latter country, the miner already has agreements in place with the commodities giant Glencore, but the latest news concerns its operation at the other end of the continent. It now owns 97 per cent of its flagship mine in South Africa, having just moved closer to the complete takeover of Sallies, the miner on the ground there (having bought all its ordinary shares, Fluormin is now mopping up its debentures).
The positive news has helped the company to hold on to the gains it has made since the shares dipped below 40p in November, with the stock now trading at 58p.
Security fears boost surveillance specialist Datong
Aim-listed Datong supplies governments and security agencies with covert tracking and location technology to combat crime and terrorism. Revenues have been resilient throughout the economic ups and downs of the past five years. last week a court ruled in its favour in a five-year patent case against a rival and Datong's shares closed on Friday at 28.5p, a gain of more than 15 per cent on the week.Reuse content