Crackdown on late payment

Businesses have urged the government to make an example of companies that delay payments. The call came after pharmaceutical retailers Alliance Boots wrote to suppliers indicating that bills would be paid up to 75 days late with a 2.5% settlement discount for paying them within the extended period. Alliance Boots said the policy was standard across the industry. But the Federation of Small Businesses said the firm's behaviour was typical of large companies that "unashamedly" made SMEs wait over 100 days before paying up, often changing terms and conditions without notice. It believes that this amounts to an unofficial form of credit and corporate intimidation but also notes that government departments are often just as guilty. A large number of firms went out of business or had to settle for 50% or less when dealing with the Department for Food, the Environment and Rural Affairs (DEFRA) after the operation to deal with the last foot-and-mouth outbreak.