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December 07, 2012

More FTSE 100 firms sign the Prompt Payment Code

A second round of letters to 75 FTSE 100 companies requesting that they sign up to the Prompt Payment Code (PPC) has persuaded a further 20 companies to sign up.

The Prompt Payment Code is part of the Be Fair – Pay on Time campaign. The campaign was created by Debbie Abrahams, MP for Oldham East and Saddleworth and is partnered by the Institute of Credit Management (ICM), the Federation of Small Businesses (FSB) and the Forum of Private Business (FPB).

Since its inception, 25 FTSE 100 companies have signed up to the code. Now 20 more companies have declared an interested in signing up. Those that have agreed include Standard Life, BHP Billiton, Vodafone, Kingfisher, Burberry, British American Tobacco, Royal Dutch Shell, Diageo and Associated British Foods.

Those that say they are "working towards signing up" include Morrisons and Whitbread. But one big name that has refused is Sainsburys – the supermarket chain wrote to their suppliers lengthening payment terms from 30 to 75 days at the same time as refusing to sign up to the PPC, according to evidence from the FPB.

Debbie Abrahams, MP for Oldham East and Saddleworth, said: "We should give credit to the 20 global companies who have agreed to sign up to the Prompt Payment Code as they are leading by example and committing to help SMEs across the UK. It shows they recognise how their actions affect the thousands of hard-working SMEs across the UK and that they are ready to be held accountable for their actions."

However, Abrahams described the late payment of smaller suppliers as a "repulsive and unacceptable business practice".

Philip King, ICM chief executive, said: "We welcome any initiative that supports a culture of prompt payment, and the work of those in government and opposition to bring payments to the front of the business agenda. The certainty of payment is critical to small businesses to help manage their cashflow, especially in the current economic environment."