The CBI at Harrogate: Action urged on late payments

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The Independent Online
THE 'corrosive culture' of late payment must be broken and access to finance improved if small business is to continue as the engine of economic growth and employment, the conference was told.

Richard Brucciani, chairman of the CBI's smaller firms' council, said the practice whereby large firms routinely delayed payments to maximise cash flow had to be tackled. He said there was no single solution to the problem. Legislation alone could not alter the balance of power between large customers and their small suppliers.

Mr Brucciani stressed the need for better credit management, voluntary codes of practice and more efficient legal processes. He said a 'charm offensive' had begun, with the Government and the Bank of England, among others, taking the ills of small business seriously.

He also warned that any attempt to make companies bear the full costs of sick pay would stifle small business growth. He urged the Government to streamline advice available to the sector to make it easier to digest.

George Metcalfe, chairman of the CBI's smaller firms finance group, attacked the banks' approach to funding. He said overdrafts were offered, whatever the client's needs. He called for a better approach to long-term finance, based on the quality of business plans.