Opposition calls for fines on late debts
Friday 03 June 1994
Labour and the Liberal Democrats have pledged to introduce a statutory right to charge interest on overdue payments as the only certain way to stop debtors effectively taking advantage of free credit.
In last week's competitiveness White Paper, the Government postponed consideration of legal penalties for at least two years, to the anger of the small-business lobby.
Spelling out the Liberal Democrat commitment at the annual conference of British Chambers of Commerce in Birmingham, Paddy Ashdown, the party leader, said: 'You cannot trust them (the Tories) to deliver their promises on tax - and you cannot trust them to deliver the best deal for business.'
Yesterday's industrial strategy document from Labour says: 'Late payment is likely to remain a problem so long as it offers financial advantage without financial cost . . . In practice, we would not expect such a right to be often invoked in court proceedings. The objective . . . would be to supply an incentive to ensure bills are paid promptly in the first place.'
A Liberal Democrat paper on helping small businesses put the cost of late payment at about pounds 15bn; payment of just one-tenth on time would outstrip the total sum invested by the venture capital industry. Ministers argue that voluntary measures such as the proposed British Standard of prompt payment must be given a chance to work.
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