An estimated 5500 businesses across the Stockton Borough could be owed as much as £50million in late payments from bigger clients affecting their cash flow and ability to pay their own bills.
Figures released by BACS Payment Schemes Ltd have laid bare the extent of late payments to small and medium-sized businesses, which now stands at £26.3 billion. Member of Parliament, Alex Cunningham, has now revealed what this could mean for Stockton’s local economy.
After seeing the data, Alex said:
“This shocking figure of £26.3 billion is a result of big clients not paying our small businesses for months on end – and sometimes, just not paying them at all. Based on the number of businesses in the Stockton Borough this means our local economy could be owed up to £50 million in late payments. Averaged across the country, that could mean more than a hundred businesses in the area are failing each year because larger clients just don’t pay them what they owe.
“It’s important that everyone understands what these national figures mean for local economies. Late payments hurt every local economy across the country. Those appalling national figures mean that our small businesses, our local entrepreneurs; the lifeblood of Stockton are struggling. It’s time for government to step in and make these big clients pay our local business men and women”.
In total, an estimated 47% of all small and medium-sized businesses experience late payments by larger clients, with large private firms singled out as the worst culprits.
The Conservative government announced a new Small Business Commissioner to look at the issue of late payment, which affects an estimated 2.5 million small and medium businesses. Labour has slammed the government’s efforts, with the Shadow Small Business Minister dismissing it as “toothless”.
Labour’s Shadow Business Minister Bill Esterson MP said:
“The stakes are incredibly high: tackling late payment means preventing 50,000 business deaths in the UK each year. Labour has pressed the Conservative Government repeatedly to do more. It should start by giving powers to the new Small Business Commissioner to fine repeat late payers, to conduct investigations into complaints from small firms, and to provide dispute resolution for small businesses who just can’t afford costly court battles.
“The government has shied away from every opportunity to tackle this scourge head-on. Voluntary codes and gentle reminders haven’t worked: we need real action to secure the future of millions of small businesses”.