Debbie Abrahams Raises Concerns Over Small Businesses

Debbie Abrahams MP

Our local MP, Debbie Abrahams, has taken up the issue of small and medium-sized businesses, who are being affected by the failure of larger companies to settle invoices on time.

Her intervention follows a letter she wrote to Saddleworth News last month (see here) asking for more information about the impact of the problem in this area.

Today, she’s issued a statement calling on all companies to settle their accounts in a timely fashion, to help all businesses recover from the recession

She commented: “I have had one constituent in particular who came to me as a small local business struggling to make ends meet because a larger company, which he is a supplier to, was not paying what they owed on time. In fact on many occasions payments were taking well over 90 days.”

Ms Abrahams added: “Clearly there is nothing new about the issue of late payments but as we try to recover from this recession it is making life unbearable for many SME businesses and in many cases this problem with cashflow is what will see them go under.”

She went on: “I’m calling on all companies, especially the larger ones, to review the length of time they are taking to pay for products or services they buy from companies in my constituency and to be fair and pay on time. What’s more I challenge companies to be open and publish their records for the time it takes them to settle their accounts.”

According to Ms Abrahams, several local businesspeople responded to her request for more examples of the problem in the local area, although none wanted to be named publicly.

But her statement quotes one plumbing and heating contractor as saying: “We’ve spent the last 35 years working hard and building up our business and I’ve never known it so bad in terms of late payments and the negative effects it’s having on us and other similar sized companies.”

The contractor continued: “When the recession hit, our industry was one of the first to feel the effects. Our regular clients’ work began to dry up and the only companies who seemed to have work were the larger companies, so we had to try and win work with them. The government are supposed to be policing payments from these large companies but mustn’t be happening. Sub-contractors are being crippled by this and we hear nearly every week of another small business that has gone under.”

The contractor went on: “We don’t have legal departments and in most cases can’t even put up a fight.  You really would be astonished at what companies like ours have to put up with in the industry. If the government is not careful and don’t look at this issue of late payments they are going to lose everything that is good about our construction industry and our economy in general.”

Those views were echoed by another local business owner, who again didn’t want their identity revealed. He commented: “I have been up and running for three years but now I am really beginning to struggle because my accounts aren’t being settled on time. As a result I’m having to go to my bank manager to request an overdraft of another £11,000. Without this I would really begin to struggle.”

He added: “The way I see it is my company does what is says on the tin. We’ve done the work, completed our side of the deal, paid out of our own money. So then we just need our clients to pay us on time, as agreed, in our payment terms.”

The statement from Ms Abrahams also included a quote from her party colleague and Shadow Enterprise Minister Chuka Umunna, who stated that Labour was currently looking at ways of tackling the issue as part of its policy review process.

Ms Abrahams also urged any other local businesspeople affected by this problem to join her new campaign, called Be Fair – Pay On Time. It can be found by visiting her website at www.debbieabrahams.org.uk and following the link to her Facebook page.

If you’ve got any thoughts on this matter, feel free to leave a comment below this article.

Author: Jude Gidney - Editor

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