2 months is a long time in politics!
It took approximately two months between the last government announcing the setting up of a Credit Adjuducator to help SMEs access bank finance, and the complete scrapping of the idea by the new coalition. In between, the idea had become a little bit of a dead duck anyway, with credit professionals in particular questioning how the scheme could ever work.
Back on april 1st in this blog, I wondered why it took Labour so long to introduce the idea of a credit adjudicator- if the ex- chancellor Alistair Darling had brought the scheme in at the height of the credit crunch, like the French did, it may have been very helpful indeed. however, leaving it to his March 2010 budget, when the UK was already creeping out of the recession, was just a tad too late!!
I reckon if BIS wants to do something concrete about helping small business’s credit problems, how about trying to persuade Government ministers to firstly recognise the moribund nature of the Late Payment of Commercial Debts (Interest) Act, and secondly introduce some legislation that really tackles the deep rooted problem of late trade payment in this country of ours. Hundreds of thousands of SMEs in this country suffer serious cash flow problems because of the large company habit of paying invoices late.
Giving small businesses the right to slap interest on overdue bills just doesn’t work in the real world- suppliers are too worried about upsetting their large clients and losing them as a result. Maybe the government needs some help to come up with alternative schemes. Have any accountants out there got any ideas?
