Business – DTI faces pressure on pay policy

The Department of Trade and Industry came under renewed pressure this week to rule on whether Rentokil Initial’s controversial 60-day payment policy for small suppliers breaks the Late Payment Act.

Earlier this week, Nick Goulding of the Forum of Private Business sent a second letter to small business minister Barbara Roche demanding a ‘definitive’ ruling over the legality of Rentokil’s payment policy by the end of the week. He also asked if it broke the code of the government-sponsored Better Payment Practice Group, set up to champion prompt payment.

Rentokil’s chief executive Sir Clive Thompson, who is also president of the CBI, which is a BPPG member, has faced calls to resign from his CBI post. Last week, Rentokil appeared to backtrack by offering to pay small suppliers interest on overdue balances.

But pressure was mounting within the BPPG for Sir Clive to rethink his payment stance.

The BPPG code requires members to agree and stick to supplier payment terms. At least one Rentokil supplier denied signing or being informed of a payment agreement. A BPPG member said: ‘One would hope internal pressure from the CBI committee will get Thompson into line.’

Another added: ‘Thompson should go back to the drawing board and improve his own firm’s practices.’

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