Heseltine admits late payments to creditors

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The Independent Online

The Deputy Prime Minister, Michael Heseltine, yesterday admitted that he had delayed the payment of bills as a businessman to avoid going bust.

His frank admission flies in the face of the Government's drive to persuade firms to pay their bills on time.

The former President of the Board of Trade defended his action, after sparking a row with Labour over private remarks reported yesterday in the Independent on Sunday in which he said late payment was part of the culture of British business.

Mr Heseltine refused to apologise when questioned about the report on BBC1's Breakfast With Frost programme yesterday. "Everyone who has ever started a small business knows the strains. Many people who go through that face moments when they find it difficult to pay their bills. I certainly went through that experience and certainly in those circumstances the creditors waited for their money. But they all got paid. That's what the creditors care about above all else," he said.

Asked if he would be apologising for his remarks, he said: "Apology for paying my creditors? I'm very proud of the fact I paid all my creditors."

Mr Heseltine, who made his fortune in publishing, prompted the row with remarks at a dinner at the St Stephen's Club in Westminster.

John Prescott, Labour's deputy leader, accused Mr Heseltine of supporting behaviour which "wrecks people's lives".

Tony Blair, the Labour leader, in meetings with business leaders, has said Labour is considering legislation to force firms who pay their bills late to pay interest on the arrears. Labour believes the promise to act on late payment will have potent appeal to businessmen in the run-up to the general election. There has been speculation that the Government will seek to match it by carrying out its own action to curb late payers

The left-of-centre think tank, the Institute for Public Policy Research, says today in a report that the unemployed can be included in the "stakeholder economy". It proposed a job creation programme costing pounds 1.7bn a year to create up to half a million new jobs. Many of the jobs would be part-time, provided by local authorities.