The UK Independence Party (UKIP) has pledged to introduce a system of fines for firms found to be systematically paying suppliers late.
In its manifesto, launched today by leader Nigel Farage, the party said it was “not acceptable for big businesses to exploit smaller firms by deliberately delaying payments and UKIP will take firm action to stop this practice”.
Under the proposed scheme, businesses would provide evidence of repeated late payments to HM Revenue & Customs, who would then be able to investigate, particularly if the company concerned was the subject of numerous complaints.
“Existing regulations are of little practical use: small businesses are reluctant to charge interest to customers and legal proceedings are expensive, time consuming and hardly an effective way to develop business relationships,” said the manifesto.
“The identity of the complainant company will remain confidential. If the large company is found to be systematically exceeding its contractual terms of payment with small businesses, a sanction of significant fines, proportionate to the extent of the abuse of terms, will be levied.
"Fines would escalate for repeat offenders and be noted in the offending company’s statutory accounts.”
The party also said it would put a stop to the practice of firms facilitating bank loans to suppliers by guaranteeing to pay invoices at a point in the future.
“UKIP will also end a growing practice whereby large companies extend their payment terms to small companies, by arranging for their supplier to take out a bank loan to facilitate their demands,” said the manifesto.
UKIP said it would “support dairy farmers by requiring the Competition Commission to promote fair practice in the food chain, in addition to considering price and competition issues”. “We will also refine the brief of the grocery [code] adjudicator, who arbitrates on trade relationships between the large retailers and their suppliers, if necessary,” said the manifesto.
UKIP has also promised to scrap the Driver Certificate of Professional Competence for hauliers, which it describes as “an expensive second-tier requirement, which is causing job losses, because of the added administration and expense to hauliers”.