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Big Businesses Told To Stop 'Hoarding Cash' From Suppliers Amid Coronavirus Pandemic

By Ned Simons

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Rishi Sunak has been urged by a cross-party group of MPs to take swift action to ensure small businesses do not collapse during the coronavirus pandemic as a result of big companies failing to pay them on time.

In a letter to the chancellor seen by HuffPost UK, senior Conservative, Labour, Lib Dem and SNPs MPs demand companies that “hoard cash” from their suppliers be fined.

Sarah Olney, the Lib Dem business business spokesperson leading the call, warned thousands of small businesses could end up having to “close their doors for good” if something was not done fast.

A total of 16,060 patients have died in hospital after testing positive for coronavirus in the UK as of 5pm on Saturday, according to the Department of Health and Social Care.

Amid pressure on ministers to set out how and when the current lockdown measures will be lifted, the MPs told Sunak: “The Covid-19 pandemic spells great uncertainty for many businesses in the UK and with reduced economic activity many are concerned about receiving timely payment from large customers.

“Many small firms now find themselves in a perilous position.

“Many still have no choice but to trade with long delays to payment imposed on them by larger customers and the pandemic has only exacerbated this problem.

“In light of these difficulties, several large firms have done the right thing and paid their suppliers promptly. But many others have not.

“In the current crisis successful businesses, deprived of payment, may now have to take support loans from the government, lay off staff or even enter administration.

“Large companies should pay their suppliers on time and not hoard cash when their suppliers are struggling.”

MPs who have signed the letter include Conservatives Julian Lewis and Michael Fabricant, former Labour shadow cabinet ministers Andrew Gwynne and Barry Gardiner, Lib Dem leader Ed Davey and SNP MP Joanna Cherry.

The MPs have called on the government to give the small business commissioner, which ensure fair payment practices, to be given the power to fine large firms which consistently fail to pay suppliers on time.

Sunak has also been urged to make the prompt payment code, which requires businesses to pay 95 percent of its invoices within 60 days, compulsory for companies with more than 250 employees.

Olney said small businesses were “the bedrock of our economy and our communities”.

“With so many of them struggling due to slow or indefinitely delayed payments from large customers, they risk going under if the government fail to act,” she said.

“The chancellor has shown willingness to take steps to support businesses through this crisis, but more must be done.

“It is time this government ensured large companies were not only held to account, and but that they behave responsibly during this crisis, otherwise we face watching thousands of small businesses close their doors for good.”

Via:: https://www.huffingtonpost.co.uk/entry/mps-demand-big-businesses-stop-hoarding-cash-from-their-suppliers-amid-coronavirus-pandemic_uk_5e9c86bfc5b6743887b179cb