Future Labour government would 'declare war' on late payments to suppliers by big businesses

Speaking at an event organised by the Federation of Small Businesses[FSB] in London, Mr Corbyn will say: “Cash is king for any business and big companies are managing their cash by borrowing - interest free - from their suppliers.

“Some of the biggest names in business are holding cash piles that don’t actually belong to them. It’s a national scandal. And it’s stopping businesses from growing and causing thousands to go bust every year. It kills jobs and holds back economic growth.”

The Labour leader will name and seek to shame large firms, citing credit agency reports, which have alleged that E.On, Capita, BT Group, Vodafone, National Grid and Marks and Spencer are among the worst offenders when it comes to late payment.

The party pointed to findings based on data from Bacs Payment Schemes Limited, which is involved in the clearing and settlement of UK automated payments.

It said current Experian credit reports gave payment times for a random selection of large firms, which included: E.On at 78 days; Capita at 82; BT Group at 89; Vodafone at 84, National Grid at 119 and Marks and Spencer 150. Labour pointed out how Marks and Spencer was, therefore, “paying suppliers more than six months after delivery of goods or completion of work”.

In his speech, Mr Corbyn will say that, in power, Labour would require any company bidding for a public sector contract to pay its own suppliers within 30 days and would look at introducing for the private sector a system of binding arbitration with fines for persistent late payers.

“We will support those striving to make a living through self-employment and in small businesses. Not just because it is the right and fair thing to do but because millions of jobs and the future of our country depends on it,” the Labour leader will say.

But Conservative MP Amanda Milling, who sits on the Commons Business Committee, said: “Despite what Labour are saying today, all that Jeremy Corbyn can offer small businesses across Britain are higher corporation tax, an increased deficit and more economic instability.

“Jeremy Corbyn’s pledge to borrow £500bn means higher taxes and would risk the jobs of ordinary working people. With Jeremy Corbyn in charge of the nation’s finances, Labour would crash the economy just like they did last time,” she added.

In a wide-ranging speech on the economy, the Labour leader will promise that taxes would fall on those with the broadest shoulders. He will pledge not to increase the corporation tax rate for small businesses and say Labour would scrap quarterly reporting for micro businesses if it was introduced next year.

“In last month’s Budget, the Chancellor bowed to pressure by delaying the implementation of quarterly reporting for small businesses by one year; that’s not good enough. Labour is against small businesses having to report quarterly. It’s a burden, a distraction, that will hold entrepreneurs back.

“Labour will scrap quarterly reporting for small businesses with a turnover of less than £83,000 a year to help you focus on growing your business,” Mr Corbyn will say.

He will also hit back at Theresa May’s recent attacks on Labour’s plans for a National Investment Bank supported by regional investment banks.

Mr Corbyn will add: “The Prime Minister frequently accuses me of wanting to bankrupt Britain by borrowing money to fund investment but, as every business person knows, there is a world of difference between borrowing for capital spending and borrowing to fund the payroll and day to day trading or service delivery.

“The risk of bankruptcy comes not when you borrow to invest in projects that will deliver growth but when you give tax breaks to big companies and the wealthy when you don’t have enough money to run public services.”