An Oldham MP has embarked on a new campaign to encourage the UK’s top 100 FTSE companies to sign up to the Prompt Payment Code (PPC).
Be Fair – Pay on Time has been created by Debbie Abrahams and is backed by a number of high profile CEOs representing the UK’s small and medium sized businesses (SMEs), as well as the Institute of Credit Management (ICM).
The campaign is being championed by Debbie, who is MP for Oldham East and Saddleworth; Philip King, CEO of the Institute of Credit Management (ICM); John Walker, National Chairman of the Federation of Small Businesses (FSB); and Phil Orford, CEO of the Forum of Private Business (FPB).
A letter, signed by all of the above, will be sent to the UK’s top 100 FTSE companies not already signed up to the PPC inviting them to show their commitment to pay their accounts on time and help SMEs stay afloat as the country recovers from the recession.
Debbie Abrahams says that in the current climate she cannot imagine why a multi-million pound company with a healthy balance sheet would not be prepared to lead by example and sign up to the code: “I have had several constituents who have come to me as owners of small local businesses struggling to make ends meet because a larger company or companies are not paying what they owe on time. In fact on many occasions payments are taking well over 90 days.”
John Walker, National Chairman, Federation of Small Businesses, adds that late payment has always been an issue for small firms: “Our research shows that around three quarters of members have experienced late payment with almost one in 10 (11 percent) waiting for more than £35,000. Big business has financial buffers that a smaller firm doesn’t have and so they must be encouraged to pay on time.”
Chuka Umunna, Shadow Business Secretary, who visited Oldham for the launch, is also concerned about the plight of SMEs struggling as a result of late payments: “Too many small companies are waiting too long for payments, and many successful firms are being put at risk of going under because they are not being paid on time by large companies, organisations and the public sector. Collectively, SMEs are owed billions of pounds in late payments.”