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Politicians are trying to force large corporations to publish how long they take to pay small firms after an inquiry found that British small-to-medium enterprises were owed more than £36bn in late payments last year.

According to the Debbie Abrahams MP, chair of the inquiry, the government has also released a series of recommendations to help support trade associations dealing with payment disputes on behalf of SMEs.

"Until top CEOs, and their executive board members, make a decision to act ethically in business, and treat our small and medium sized businesses fairly, this problem will persist," said Abrahams.

"The public has grown tired of hearing about huge, greed driven, pay packets, pay-offs for failure and tax evasion; but allowing a culture of late payment to persist unchallenged is another board-level decision that directly effects ordinary, hardworking, people across the country."

Recommendations

Independent trade body, The Federation of Small Businesses, revealed that more than half of the SMEs it represent were not paid promptly by large companies.

In 2012 more than 124,000 small and micro businesses said they were almost put out of business by late payments.

It added that with an average wait of 58 days, between completion and payment for services, SMEs are under even more pressure to stay afloat.

Among main recommendations from the report, the inquiry said the government should promote the adoption of ‘good practice’ guidance for large companies in managing supply chains, including publishing performance data relating to payment-on-time to suppliers in audited annual accounts.

It is also suggested that lawmakers should establish a Construction Code of Conduct, similar to the Grocery Code, with an independent adjudicator for mediation.

In terms of seeking recompense for late payments, the inquiry said the government should introduce a Retentions Monies Bill with money retained by a customer from a supplier to be held in a trust.

It also said added the Whitehall should make sure that it supports intermediary agencies, which act on behalf of suppliers in seeking recompense through the EU Late Payments Directive.

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