Small Firms Welcome Labour Promise to End Late Payments Crisis

The Federation of Small Businesses (FSB) has welcomed promises made by the Labour Party that it will end the crisis of late payments that creates such problems for companies across the country.

The FSB says that the promise will be cheered and welcomed by its members if Labour wins the upcoming election but the organisation also wants to see some of the associated ideas elaborated on in the coming weeks.

“The cast-iron commitments to end the late payment crisis and ban late payers from public procurement are critical, but light on detail,” commented Mike Cherry, the FSB’s national chairman.

Mr Cherry went on to emphasise how important it is for large companies to take more responsibility and to suffer more accountability over their performance when it comes to paying their suppliers on time or otherwise.

“We’re clear about the other interventions that are needed in this space: making corporate boards fully accountable for poor supply chain treatment and properly empowering a new Small Business Commissioner,” he said.

From the FSB’s perspective, the issue of late payments is of huge importance because so many of its members are suppliers to big companies and they can very easily find themselves in serious cashflow difficulties if their invoices aren’t routinely paid on time.

Beyond late payments, the FSB says it is happy to see the Labour Party recognise the pain that business rates has been causing small firms in recent years but cast doubt on whether a proposed ‘commercial land value tax’ represents a suitable alternative to the existing system.

The prospect of a rapid shift to an increased National Living Wage under Labour is also a concern to the FSB, with Mr Cherry saying he hopes the party provides proper support if companies are obliged to transition towards paying higher wages.

“Where apprenticeships are concerned, increasing the transfer cap for non-levy paying businesses to 50 per cent and introducing an online matching service are good moves,” Mr Cherry said in a statement.

However, he added that Labour should ensure that its Green New Deal proposals don’t lead to it being “too prescriptive” when it comes to apprenticeships.