THE South Basildon and East Thurrock MP has called for an end to the “tyranny” of late payments to small and medium sized enterprises.
Opening a debate in the House of Commons, Stephen Metcalfe said that late payment of invoices is a problem in both the public and private sector.
The MP’s comments come just weeks after Thurrock Council were attacked by local Conservatives for failing to pay 20 per cent of their invoices on time.
Cllr Barry Johnson, the Tory’s spokesman for finance matters, called the figures “truly appalling”. He said: “The reality is that for lots of small businesses that do work for the council, being owed a few hundred pounds can be a serious worry and strain.”
Cllr Phil Smith, responsible for central services said he was “deeply disappointed” at the rate of late payments, blaming officers who are raising orders before receiving purchase orders.
Speaking to MPs last week, Mr Metcalfe said: “Late payment is an endemic problem in both the public and private sector. As it stands, outstanding debts to this country’s SMEs have reached a record high of £35.3 billion. This is an increase of almost £2 billion from the last reported figure 6 months ago.
“This has got to change, not only for the benefit of the SMEs in question, but for our economy as a whole.
“This is not just a commercial problem. It is an ethical one. SMEs are the backbone of our economy and we must make it clear to big businesses and to public sector bodies that it is simply not acceptable to pay suppliers outside of the agreed terms.
“I welcome the Government’s commitment to tackle the issue but as I said in the debate, we must have a system in which the reality matches the rhetoric and I will work hard to promote this message.”
In response, Business Minister David Willetts stated that all Government departments have included a clause in their contracts requiring main contractors to pay suppliers within 30 days.
He expressed the Government’s commitment to ensuring that the Prompt Payment Code is adopted by as many businesses as possible.