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Cable faces demands to come clean on late payment policy after dramatic u-turn

Toby Perkins MP, Labour’s Shadow Small Business Minister, has today written to the Business Secretary to demand that he explain the government’s latest u-turn on business policy1.

You can read the full letter here – Rt Hon Dr Vince Cable MP – April 2014

In 2012 a minister in the Department for Business, Innovation and Skills wrote to FTSE 350 and warned them they would be named and shamed if they did not sign up to the “Prompt Payment Code”2.  This has not yet happened.

Toby Outside Big BenToby Perkins tabled a series of written parliamentary questions last week to find out if any companies were soon due to be named and shamed.

On the same day these were due to be answered, it was reported that BIS minister Matt Hancock had ruled out had “ruled out” the naming and shaming of companies not paying on time3.

Toby Perkins has therefore written to Vince Cable, the Business Secretary demanding that he make a statement and clear up the situation for small business.  He also asked Cable to make a statement in the House to clarify the situation for MPs.

Toby said:

“Small businesses are facing a cost-of-living crisis without enough money in their accounts to survive.  A quarter of company bankruptcies are estimated to be the result of late payments.

Instead of taking the side of small businesses and tackling this problem, Vince Cable’s Department is in disarray with Ministers completely contradicting each other.  Cable needs to get a grip on his department and clear up the situation once and for all.

Late payment is a clear example of “blue tape” where small businesses are held back by more established larger companies.  If this Tory-led government doesn’t take the action needed to stamp it out, small business can be assured that the next One Nation Labour government will.”

Notes

(1)  Copy of the letter is here – Rt Hon Dr Vince Cable MP – April 2014

(2)  http://realbusiness.co.uk/article/15801-business-minister-we-will-name-and-shame-late-payers

(3)  http://www.thetimes.co.uk/tto/business/industries/banking/article4049413.ece

(4)  Shadow Secretary of State for BIS, Chuka Umunna, has threatened to expose companies that are persistently late paying their suppliers under new Labour plans to crack down on business “blue tape” – http://www.huffingtonpost.co.uk/2014/02/12/chuka-umunna-blue-tape_n_4774944.html

(5)  Under the next One Nation Labour Government, businesses would be forced to include information about payment records in their annual accounts under new reporting requirements and Labour is looking at naming and shaming the worst offenders.

(6)  For more information call Toby Perkins on 020 7219 2320

(7)  In March 2013 a list of FTSE 350 companies who had and had not signed up to the code appeared on the Prompt Payment Code website run by the Institute of Credit Management.  The government have done little to publicise this list, nor have they updated it in the year which has followed.

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I am Toby Perkins, Labour's Member of Parliament for Chesterfield. If you would like to get in touch with me, my office is open and can be reached by phone on 01246 386 286. I also hold regular surgeries so that constituents can meet me and I can take up their concerns. If you would like to make an appointment then please do contact my office. Thank you for visiting.

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