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Oldham East and Saddleworth MP Debbie Abrahams has praised an announcement by Labour’s Shadow Business and Trade Secretary Jonathan Reynolds about helping to stop late payments to small businesses.

Ms Abrahams has campaigned on this in Oldham and nationally for many years, winning her several business awards in the process. She launched her ‘Be Fair – Pay on Time’ campaign in the summer of 2011 after the issue was raised with her by businesses in Oldham East and Saddleworth. Her 2013 Inquiry into Late Payments to Small Businesses made recommendations which have been adopted by the Labour Party.

Moreover, in 2019 she introduced a Public Sector Supply Chains (Project Bank Accounts) Bill to try and resolve the particular issues in the construction sector which can see suppliers lose tens of thousands of pounds, as a joinery  firm in her constituency did, or to go out of business after the collapse of Carillion. Ms Abrahams built on this work earlier this year through an amendment to the Procurement Bill which would have ring-fenced monies due to subcontractors in construction supply chains through mandating use of project bank accounts and ensuring retention monies are safeguarded in a separate and independent accounts.

In Parliament this year Ms Abrahams highlighted the evidence that 4,135 construction businesses—mainly small firms—went into insolvency over the 12 months to the end of January 2023. Unfortunately Government inaction on this issue is likely to see more firms fold.

In his speech this week, Reynolds said “I know access to finance is a huge barrier. So, we will improve access to patient capital and work with the British Business Bank to make sure Britain’s financial markets are working as they should for entrepreneurs, and we know we need to go further on tackling one of the biggest scourges to small business: late payments.

“Again, I’m pleased to hear the Chancellor acknowledge this last week, but Labour’s plans would go further, faster with new legislation to ensure all large companies, not just government contractors, will have to report on their payment practices and demonstrate they are prompt payers.”

Debbie Abrahams MP said:
“I have been campaigning on this issue for many years, ever since one of my constituents, a haulier, came to one of my surgeries to explain the impact it was having on his business. I explored this a bit further and I found how rife the practice was, not just in Oldham and Saddleworth but across the country.

“It’s an abuse of power. That’s why I am delighted to hear Jonathan’s announcement that all large companies must demonstrate that they pay on time.

“While this is very welcome, I look forward to working with Jonathan and his team to continue to develop Labour policy on this area, including through the use of Project Bank Accounts which are absolutely integral.”

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