Michael Fallon is set to name and shame FTSE chief executives who fail to sign their firms up to a prompt payment code designed to help small businesses get paid on time.
Fallon wrote to every company in the FTSE 350 in November telling them that the Department for Business, Innovation and Skills will publish a list in February revealing the names of firms that fail to adopt the code, operated by the Institute of Credit Management.
Mr Fallon said that recent figures from BACS payment processing revealed that £36.5bn is owed to small firms in late payments: “Cash flow is the lifeblood of small companies. Poor cash flow is how small businesses go under. £35bn owing would average out at around £30,000 per small company if you do the maths.”
“Large companies are sitting on an awful lot of cash at the moment and it is simply not fair if they don’t pay their suppliers or sub-contractors on time,” Mr Fallon said.
In recent months both Sainsbury’s and the mobile phone company O2 have faced criticism for extending their payment terms. Both said they were bringing themselves into line with competitors.
Portland Legal Debt Collection would urge all businesses to sign up to the Prompt Payment Code.