Small businesses are the powerhouse of the economy, contributing 46% of the UK’s annual income in the private sector. If we are to have a sustained economic recovery, it will be built on the backs of small businesses. I support the principles of the Bill, although it has been late in coming, but I have some concerns about the detail.
I want to refer in particular to the late payments provisions. As has been mentioned, I have had a campaign on this, stemming from a local issue, for the last three years. A local haulier came to me and said his business was going out of business as a result of late payments. That opened a whole can of worms. Small businesses do not want to go public about late payments because of the possibility of retribution. This all culminated in a Radio 5 Live phone-in programme on late payments last November, which had the highest ever recorded response.
That shows the scale of the issue, and it is hardly surprising. We know from BACS—bankers automated clearing services—data that £46.1 billion is currently owed in late payments. That affects not only productivity—158 million hours have been spent chasing overdue bills—but also access to finance and the terms of that
finance. The Forum of Private Business estimates that in 2012 it put out of business 124,000 businesses, so it is a huge issue, not just in the private sector, although it is more predominant there, but in the public sector, as was reported on the “File on 4” programme last week.
My hon. Friend the Member for Streatham (Mr Umunna) mentioned the inquiry I held last year, involving people from across the House. Its fundamental finding was that late payments reflect the culture of a company, which is ultimately down to the company’s leadership. Late payments are a form of corporate bullying, because large companies are able to exert their power over small companies.