Sunday, 17 December 2017

Racking up debt is just theft in disguise

A TOTAL of £36.4 billion is owed in late payments to small and medium-sized businesses in the UK, according to

A TOTAL of £36.4 billion is owed in late payments to small and medium-sized businesses in the UK, according to research.

The Federation of Small Businesses has found that 73 per cent of small firms have experienced problems with late payments over the past 12 months. Some bills (an estimated 20 per cent) are simply never paid.

These are shocking figures as they reveal a nation which runs up debts easily but does not necessarily have the means to pay them. Perhaps it is because we have become used to deferring payment by using a credit card.

There is something glamorous about the sitcom moment when the characters grab their cards and head to the shops for “retail therapy”. The fact that the items acquired have been paid for only with a promise to the credit card company obscures reality.

Credit card companies are large, though, and can look after themselves. They can, for example, increase interest rates punitively when faced with non-payers. Small businesses generally do not have credit card facilities and certainly have no mechanism for adding interest to a late or non-payment. For the continued existence of their business, they rely on prompt and full payment. As the figures show, this is not happening.

Some of the worst offenders are larger concerns and government bodies, with their slow-moving accounts departments and multiple signatures. There is a particular injustice here as the Government regularly admonishes the banks for not giving loans to small businesses to keep them afloat.

For loans, read debt. Debts cost money. Unpaid bills mean that the small trader may take out a loan and slide into debt on behalf of his non-paying customer. That seems grossly unjust. It is not just large bodies, though, who cause problems through non-payment. The ordinary householder who thinks that it is all right to delay payment for a service for weeks while, of course, paying for restaurant meals and theatre tickets on the nail is equally contributing to the misery of small and medium-sized business people.

As you will have guessed, I have a vested interest. Since living on the income from a small independent business, I have become very conscious of this issue. Whenever I meet other small businessmen and women I ask what their experience is and the answer is, depressingly, almost always the same. School fees remain unpaid; carpenters, plumbers, upholsterers waiting weeks for payment; small shops waiting for customers to clear accounts. Garages and hairdressers seem to be the only ones to avoid this plague.

If a person was to pick up a pair of shoes and walk out of the shop without paying for it, he would be prosecuted and would have a criminal record. I am struggling to understand why, if that person takes someone’s time and skill or goods and refuses to pay for it, they may well get away with it, at least for months. The worst that will happen is a county court judgment but that does not carry the same stigma as a prison sentence.

The 10 Commandments state quite baldly that we should not steal but there is much hidden stealing going on in our society today. We do need to ask ourselves if we are contributing to that figure of £36.4 billion.

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