The steady drip of surveys and research into the now endemic problem of suppliers, especially if they happen to be small, not being paid on time only serves to underline just how urgently this needs to be addressed.
Once again, this month a piece of research from supply chain finance brokers Crossflow Payments suggests that 15 per cent of SME turnover in the UK is locked up by late payments - that is some £266bn sat blocking up the whole economy, causing unnecessary cash flow issues for small businesses. Like a backed up sewer system, when capital is not allowed to flow as it should through the market economy, someone, somewhere inevitably ends up with a mess to clean up. And quite frankly, it stinks.
A General Election is the perfect time for our politicians to show real leadership on this issue and finally do something about it. For all the standard glib references the Westminster set make about ‘small business being the backbone of the British economy’, the accusation has always been that the main parties are really in the pocket of the big boys, or at least lack the will or the means to stand up to them.
The Conservative administration, in its previous guise under David Cameron at least, made plenty of encouraging noises about ‘stamping out’ the late payment culture. However, concrete evidence of this determination to date has been thin on the ground. One example was the creation, in last year’s Enterprise Act, of a Small Business Commissioner, whose remit will supposedly be to stand up for the little guy when it comes to disputes over payments.
Given the fact that the government is now reviewing whether a similar role it created specifically to rein in the dubious payment practices of the big supermarkets, the Grocery Code Adjudicator (GCA), is actually worth anybody’s time, forgive us if we reserve judgement on the new commissioner until we see some evidence of impact.
Show Enough Teeth
So far, the only mention of late payments by any of the main parties since the election was called in a speech Labour leader Jeremy Corbyn gave to the Federation of Small Businesses. He suggested that big businesses which cannot show evidence of ethical payment practices should be barred from public sector contracts, and that firms which benefit from the prompt payment requirements of public contracts should be required to pass them on down the supply chain.
Whether this makes it as far as the Labour manifesto is one thing - whether it has enough teeth to frighten big corporations into paying small suppliers promptly... well, I’ll leave that to your judgement.