Business leaders say if the Government wants to help small firms it needs to do more about the knock on effects of late payments.
In a speech at the Conservative Party Conference, business minister and Sevenoaks MP Michael Fallon described the Tories as “the party that backs small business”.
He also used his address to attack Labour’s business plans, saying “we back success, they tax it” and warned the Liberal Democrats to “leave business alone”.
Business minister and Sevenoaks MP Michael Fallon
He also took the opportunity to attack the Business Secretary Vince Cable, quipping “we’ve enough red tape. We’ve enough yellow Cable”.
While his strong rhetoric has been welcomed by firms, the Federation of Small Businesses in Kent and Medway argued not enough was being done about core issues affecting companies, like the impact of late payments on cash-flow.
They say small businesses are being damaged by announcements by firms like Marks & Spencer that they will be extending their payment times to 75 days.
Chairman Roger House said: “It means firms struggle to pay their suppliers on time and in some cases can mean they struggle to pay their staff.
"firms struggle to pay their suppliers on time and in some cases can mean they struggle to pay their staff..." - FSB Kent and Medway chairman Roger House
“What we need to see is a much stronger prompt payment code. It needs to be able to stop any big business that tries to squeeze their small suppliers by extending payment terms, in some cases to as much as three months.”
The FSB has called for a support system styled on the Small Business Administration used in the US to keep things simple for budding entrepreneurs looking to start new companies.
Mr House added: “The support from Government to help businesses get off the ground is welcome. The minister’s [Fallon’s] support and focus on small firms shows he is listening to their needs.”
At the party conference, Chancellor George Osborne announced a £750 million plan to impose a freeze on fuel duty until polling day in May 2015.
Mr House added: “The Chancellor talked about the importance of small firms to the economy and growth, and it was encouraging to hear him say the Conservatives are ‘nothing if not the party of small business’.
“We are delighted by the freeze in fuel duty until the end of this Parliament. Our members tell us fuel costs are a significant overhead and this announcement will help many firms up and down the country.”