Labour’s plan for small businesses
Pay to Stay
Under the Tory-led government
- Large companies – including Premier Foods and B&Q – have demanded payments from their supply chain to stay on their list of possible suppliers.
- One supplier said the practice – known as pay and stay – was like “blackmail” and BBC Newsnight reported that Premier Foods have received millions of pounds from its suppliers in this way.
- The FSB has asked for action. The government blocked moves by Labour to outlaw this practice in the House of Commons last year.
- We would ban the practice of pay and stay.
- If allowed to go unchecked, this practice will continue to give certain large firms an unfair competitive advantage over their competitors who do the right thing.
This issue received a lot of coverage from Newsnight and others last year, aren’t you just jumping on the bandwagon?
No. We tabled amendments to the Small Business Bill to ban the practice months before the story broke on the news. We’ve been concerned about this issue for some time.
The government are proposing greater transparency around payment policies, so suppliers will know what they’re getting in to. Shouldn’t you see if this will work first?
The government’s policy fundamentally misunderstands the imbalance in power between supplier and customer. Small farmers, for example, may rely on one large food company to sell their product to, putting them in a position where they are vulnerable to be exploited by practices like this.
Only a ban will give them the power they need to exert their rights.