10/12/2008 - New payment code to support SMEs
The Government is to launch a prompt payment code to encourage big businesses to pay small companies faster.
Business secretary Lord Mandelson will unveil the code, which will set out guidelines for when companies should pay small and medium-sized enterprises, to business leaders at a summit in London.
Lord Mandelson said: "I want this code to make a difference. We have opened up a dialogue between businesses and the Government to ensure we are doing all we can to support them through the difficult economic climate.
"It is critical we understand what payment issues are affecting small businesses and this summit will give us greater insight into the situation at ground level.
"The prompt payment of bills is an economic imperative and crucial if we are to protect supply chains from collapse."
Lord Mandelson hopes the code, which was developed by the Institute of Credit Management, will stop companies going against payment terms.
If companies fail to comply with the rules then their membership to the Institute of Credit Management will be suspended for three months while any complaints are investigated.
Copyright © Press Association 2008
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