Business Minister backs Prompt Payment Code

Large companies who fail to sign up to the Prompt Payment Code could be named and shamed in the New Year, Business Minister Michael Fallon has said. A letter has been sent out to all FTSE 100 and FTSE 250 companies encouraging the biggest businesses in the country to sign up the code, which was launched four years ago in a bid to drastically reduce the amount of time suppliers are waiting to be paid. If companies fail to act upon the letter, they could then be publically named. Currently there are 1,182 companies signed up to the code, with just 27 being FTSE 100 firms and only 5 FTSE 250 companies. They represent close to 60% of total UK supply chain value. The Forum of Private Business’ chief executive, Phil Orford, indicated that a domino effect can be created by late payments impacting businesses of all shapes and sizes: “It decimates cash flow and forces many firms into administration - so it is important that we do whatever it takes to reverse this trend and set in motion a culture of prompt payment for small businesses and the economy as a whole.” Parliament is set to host a debate on prompt payment issues later today.