Labour’s candidate for Greater Manchester mayor has pledged a crackdown on unscrupulous business bosses holding back payments to smaller firms.
If elected in next month’s inaugural poll, Andy Burnham says he will name and shame persistent offenders and prevent such firms from bidding for lucrative public contracts.
The policy pledge comes after small business owners across the borough have highlighted the scourge of late payments in recent months.
One company boss, who asked to remain anonymous, told the Wigan Post bullying tactics by large firms had forced him to make 20 members of staff redundant as they were withholding upwards of £200,000.
He said: “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.”
Mr Burnham, MP for Leigh and Labour candidate, will create a mayor’s Good Employer’s Charter to promote ethical behaviour among the combined authority area’s business community.
He said: “It is wrong for small businesses to be forced to bankroll those bigger players who abuse their power and refuse to pay them on time.
“The trouble is it often goes unseen by the public and people get away with it. We need to change that.
“Deliberate late payment can put other people’s businesses and jobs at risk and it needs to be talked of in the same terms as tax evasion.”
The issue has been raised in recent months by Mr Burnham’s borough parliamentary colleagues Lisa Nandy and Yvonne Fovargue.
Ms Nandy told the Wigan Post in January had contacted business secretary Greg Clark and called for the Government to outline how they planned to prevent the practice in the future.
The Wigan MP said: “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.”
And responding to figures claiming the borough’s small businesses are owed upwards of £80m in late payments, Makerfield MP Ms Fovargue said: “What’s truly shocking is that an estimated 50,000 businesses fail each year because of these late payments.”
The Government has said a new Small Business Commissioner will help deal with late payment problems. Speaking last year, the then small business minister Anna Soubry said: “One of the things the commissioner will do is signpost people to the mediation services available when neither side wants to go to court over late payments. Small firms can contact the commissioner with a complaint and he or she will investigate.”
Mr Burnham, who is one of eight candidates vying for GM mayor added: “Late payment not only hurts small businesses and their employees; it hurts our economy as a whole.
“It results in negative cash flow, lack of investment in skills and training, and in some cases, business failure
If elected, I will aim to change the culture around late payment in GM through the Good Employer’s Charter.”