A SOUTHAMPTON MP has led a rallying call to crack down on late payments to small businesses in Southampton.

Alan Whitehead MP said small business are the “lifeblood” of the city’s high streets and has called for them to be protected.

Mr Whitehead’s calls come after the Labour Party revealed that nearly half of small businesses in Southampton Test, his constituency, experienced late payment from bigger companies last year some out of business.

The damning statistic has been slammed by Mr Whitehead, who said: “With almost 8,000 small businesses in Southampton Test, any threat to their cash flow risks the stability of our local economy.

“Supporting those striving to make a living through self-employment is vital for Southampton but also the health of our national finances.”

Mr Whitehead said government had the opportunity in its budget to support small business but instead “kicked the quarterly reporting into the long grass for another year”.

He added: “They also messed around with announcing and then binning a national insurance rise.

“Labour will take action on late payees by imposing a maximum 30 days payment term on the public sector, and introducing fines for persistent late payers in the private sector.

“In addition, a Labour government will scrap quarterly reporting for small business. It’s a burden and a distraction that will hold entrepreneurs, and our communities, back.”

Mr Whitehead’s comments came after Labour declared war on late payment practice.

Party leader Jeremy Corbyn said: “Cash is king for any business, and big companies are managing their cash by borrowing – interest free – from their suppliers.

“Some of the biggest names in business are holding cash piles that don’t actually belong to them.

“It’s a national scandal – it is stopping businesses from growing and causing thousands to go bust every year.

“It kills jobs and holds back economic growth.”

Mike Pavitt, chairman of insolvency and restructuring trade body R3’s southern committee, said the failure of one company can have a “serious knock-on effect” on others, especially small and medium enterprises.

He added: “A business can have a great product and great staff, but if it doesn’t get paid for what it sells, or if it is over-reliant on one supplier or customer, things can go wrong very quickly.

“This is something I have seen all too often in our region over the past 20 years, although in my experience large private sector corporate customers, upon which multiple small business suppliers or service providers rely, have been the worst offenders.”

Mr Pavitt, a partner at Paris Smith in Southampton, added that businesses must not be complacent when it comes to checking who they are trading with.