A SMALL business lobby group has called for changes to the Prompt Payment Code (PPC) claiming firms with payment records of up to 90 days want to sign up.
The Forum of Private Business (FPB), which has championed the campaign against late and slow payment by big business, claims global commodity group Unilever aims to sign the PPC.
The FPB says some Unilever suppliers can wait up to 90 days for payment.
It says Unilever increased supplier payment times in 2010, from 60 days to 90 days, in the months between the UK’s ‘double dip’ recession.
More recently, October saw Sainsbury’s increase non-food supplier payment times from 30 to 75 days, but only last month the supermarket giant indicated it will also seek to sign the PPC, said the FPB.
The Forum said this type of behaviour was clearly undermining the spirit of the PPC, even if it was not technically breaching the current eligibility requirements allowing firms to join.
Forum chief executive, Phil Orford, says the rules have to be firmed up: “We feel big businesses are cynically using the Prompt Payment Code to boast of their ethical credentials to the wider public, when in fact they are anything but to their suppliers.
“No one in their right mind can think Unilever’s 90-day payment terms are ‘prompt’, so why should they be allowed to sign the Prompt Payment Code? It’s a ridiculous situation which has to stop.”
The Forum said it was speaking out ahead of Business Minister Michael Fallon’s naming and shaming exercise later this month, which will see FTSE 350 listed companies who have refused to sign the PPC exposed by the minister.
“There’s absolutely no doubt that we are going to hear of a number of big name brands agreeing to sign the code ahead of Mr Fallon’s announcement, but if these firms aren’t prepared to decrease their payment terms then quite frankly what’s the point them signing?”
He added: “We think that standard net monthly, that is payment on or by the end of the month following the month of invoice, is more than ample time to settle up.
“Our own research last year showed most local councils are paying in under 30 days, with many in under 10 days, so if notoriously inefficient local governments can cough up this fast, we see no reason why big business can’t.”
