From the top · 1 June 2018

Shadow small business minister: “Labour is the real party for entrepreneurs”

Bill Esterson criticised the lack of policy impact on late payments

The Labour Party’s shadow small business minister, Bill Esterson, has slammed the government’s record on supply chain practices and claimed the opposition is the only party able to fight the corner of Britain’s small business owners.

Writing for the Labour List website, Sefton Central MP Bill Esterson used fresh demands from the Federation of Small Businesses (FSB) to end poor treatment of small suppliers to speak out against the Conservative government’s record on issues such as late payments and public sector procurement practices.

“It’s been clear for the last eight years that the Tories are on the side of the biggest corporations, not the small businesses that are the lifeblood of the British economy,” Esterson wrote.

This week, FSB chairman Mike Cherry wrote to all FTSE 100 companies urging CEOs to end the late payment practices that he claimed forced 50,000 small businesses to fold each year.

“Many large firms appear to be using the disparity of power in business relationships to squeeze their suppliers, delaying payments to improve their own cash flow,” Cherry wrote in the letter.

Cherry used the collapse of Carillion to highlight the “disparity of power” between large firms and small suppliers, which have been known to delay payment as a cash flow boost. Cherry added that he wrote to Carillion in the summer of 2017 after learning the company was extending payment terms to 120 days.

The “frailty” of the government’s prompt payment code, which commits businesses to paying suplliers within 60 days, was also noted by Cherry, who pressed for a 30 day limit.

Responding to Cherry’s letter, Esterson said the Labour Party would take a more robust approach to supply chain practices.

“If people cannot get away with paying their mortgage or their rent 120 days late, then large companies that support jobs up the supply chain shouldn’t either,” he argued.

“Carillion’s collapse exposed a corporate culture of greed and complacency: nothing but profit-chasing while suppliers and small businesses suffered uncertainty and insecurity. It is ridiculous that the government has failed to promote a regularly culture that is robust, instead forcing companies to go bust at the whims of large corporations.”

2017 election manifesto

In its 2017 general election manifesto, the Labour Party detailed a number of policies aimed at winning over small business owners. The party pledged to “declare war” on late payments with 30 day payment terms for government suppliers and fines for persistent late payers, as well as promising a package of reforms to the business rates system and a new investment bank for SMEs.

Esterson continued: “While the Tories have allowed a culture of cavalier capitalism to thrive, Labour will stamp it out by properly enforcing the prompt payment code and ensuring that all public contracts are awarded to companies that pay suppliers on time and bring material benefits to communities.

“The Conservatives like to claim to be the party of business, but they’re the party of bad businesses and speculation. Labour is the real party of responsible businesses and entrepreneurs that seek to provide jobs and wealth for the many.”

Can the Labour Party claim the title of the party for small business? Let us know what you think about its offer to entrepreneurs at editors@businessadvice.co.uk

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FTSE 350

 

Small business suppliers beware: The FTSE 350 firms failing to pay suppliers on time

Government efforts to hold large firms accountable are yet to generate confidence among small business owners, and new data has provided yet more evidence of the task at hand.

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ABOUT THE EXPERT

Simon Caldwell is deputy editor at Business Advice. He has a BA in politics and communications from the University of Liverpool, and has previously worked as a content editor in local government and the ecommerce industry.

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