Speaking at the European Parliament’s SME Intergroup (the ‘all party’ groups of MEPs) John Howarth, Labour MEP for South East England, called for increased action to improve payments to small firms.
According to research conducted by the Federation of Small Businesses (FSB); 37 per cent of small firms have run into cash flow difficulties because of late payment, while 61 per cent of small firms are paid late by their big business customers. FSB estimates that 50,000 businesses would remain open and the UK economy would be boosted by £23.5 billion each year if businesses were paid on time.
John Howarth, who was a business owner and director before becoming an MEP, said: ‘Late payments are a real limit on the growth potential of small firms. When your cash is tied up servicing cash flow your potential for growth is limited.’