A poll by the Forum of Private Business (FPB) has said the growth of UK SMEs is being undermined by spiralling costs of doing business, suffocating red tape and bullying tactics from big companies.
The poll of more than 4,000 UK small and medium-sized businesses showed the extent of damage felt with nearly half stating that their business partners are neither interested in fostering a long term relationships (47 per cent) nor open to negotiating payment terms (46 per cent).
A majority (70 per cent) said behavioural late payment had been a problem in the past 12 months.
The report comes as the leader of the opposition told the Federation of Small Businesses (FSB) conference that it was a “national scandal” 44 per cent of small and medium-sized businesses suffered from late payments last year.
David Miliband said that according to government figures the average business was owed over £30,000.
Describing how late payments hamper SMEs’ ability to invest and grow and threaten insolvency, he said too many small firms were unable to enforce rights to charge interest on late payments.
The FPB report backed this up, with more than half (52 per cent) of those questioned saying that in the face of supply chain abuse from big businesses, they would be forced to broaden their client base to minimise any future disruption to their cash flow.
In response, the FPB has launched its Business Ethics Pledge, which calls on big business to commit to a five-point plan to protect and promote small British businesses ahead of the General Election.
CEO Phil Orford said: “Our latest poll confirms the supply chain is fit to burst with hurdles and roadblocks that discriminate against small firms. Big business has all the aces, and it is time for affirmative action from the next government to crack down further on this ethical deficit that threatens to break the backbone of British business – small businesses.
“The UK’s political parties should be judged at the election on their commitment to put business ethics at the top of the political agenda.”