Wigan MP Lisa Nandy has hit out at “bullying and unscrupulous” businesses exploiting legal loopholes to target smaller firms.
Ms Nandy’s intervention comes after the owner of a small borough based company reached out for help having had payment withheld as a business tactic.
The company boss, who we are choosing not to name, said he had been forced to make 20 members of staff redundant because of the more than £200k debt.
He told the Evening Post: “It’s a clear tactic being used not only against us, to push small and medium-sized enterprises (SMEs) to the brink of receivership.
“They delay and delay in the hope companies go into liquidation and they don’t have to pay up.
“It’s grossly unfair, they do everything they can to avoid payment and because they’re big firms with legal departments they can get away with it.
“They know it’s beyond the means of many small businesses to afford legal assistance or to go through a lengthy court process to claim the money.”
Ms Nandy has raised the issue in the House of Commons and with business secretary Greg Clark, calling on the Government to reveal what plans are in place to prevent the practice in the future.
The Labour MP told the Evening Post: “This case is an example of the imbalance of power within our economy.
“It is clearly unfair for larger businesses to exploit legal loopholes to delay payments for as long as possible.
“I have raised this issue with the Business Secretary and have spoken in Parliament about the need to tighten regulations to ensure this doesn’t happen.
“Small business owners work incredibly hard to build their companies and provide vital jobs for local people. Government must act to ensure there is a level playing field and prevent this kind of bullying by unscrupulous businesses.
“Government departments are also among the worst offenders when it comes to paying up on time. Ministers must also get their own house in order and lead by example. The impact on small businesses of late payment can be devastating.”