'Interest-free loan culture has to stop': Stafford MP joins businessman in calls for tougher laws on late payment
A West Midland MP is calling for tough new laws to stop big companies from keeping small businesses waiting months to be paid, as part of a campaign to back local traders and revitalise the high street.
Stafford MP Leigh Ingham joined businessman Richard Stone in calling for an end to unfair practices that lead to small suppliers being seen as a provider of 'interest-free loans'.
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The pair are urging local small business community to share their experiences of late payments as part of a new consultation, to feed directly into national proposals on late payment practices.
Miss Ingham said small businesses were the lifeblood of Stafford’s economy, creating jobs, keeping the high streets vibrant, and building stronger communities.
Buit she said too many were left out of pocket because bigger firms delayed paying their bills.
“That’s unfair, and it’s holding our local economy back," she said. "I want to see tough new rules that make sure local businesses are paid on time.”
Mr Stone, managing director of Stafford-based public relations agency Stone Junction which employs 30 people in the town centre, said: “We pay our suppliers on time because it’s the right thing to do, and we expect the same in return.
"But over the years we’ve had some real difficulty with late payments, and it’s a serious problem for many other small businesses too.
“Currently, interest on late payments can be negotiated down, putting pressure on businesses who don’t want to get on the wrong side of customers. "The culture of treating small suppliers as an interest-free loan has to stop, and that’s why I’m supporting Leigh’s campaign to tighten the rules.”
The consultation is part of the Government’s small business late payments plan, which aims to cap payment terms at 60 days, strengthen the powers of the small business commissioner, and introduce penalties for persistent late payers.
She asked Stafford firms to share their experiences of how late payments affected their cashflow, growth, and staffing, and what changes they wanted to see, including whether interest penalties should be automatic and non-negotiable.
Businesses can take part in the consultation through the website bit.ly/late-payments-consultation before October 23.
