Mr. Maude: I Don't Know Whether to Say Wake Up or Dream On

Back from a long, peaceful and news-less holiday, I'm playing catch up - and reading the sort of news that makes me wish I could have stayed forever in a Times-less and internet-free space.

According to the July 20th issue of Business Credit Management Cabinet Office Minister Francis Maude has warned 'prime contractors'- by which he means large and powerful corporate entities - that Government Departments will "name and shame" those that are failing to pay small businesses promptly.

Mr. Maude has also apparently promised - and I am quoting from Business Credit Management's article here in case you think I am still on holiday, asleep and dreaming - that "Small companies will be able to anonymously identify sluggish payers, with the results published on the Cabinet Office website."

Mr. Peter Ewen, the Managing Director of Venture Finance and Chairman of the International Factors Group apparently thought Mr. Maude's proposition an excellent idea. I am happy to say that Mr. Philip King, the Chief Executive of the Institute of Credit Management, did not. His reasons are set out very cogently here and very glad I was to read them, since they proved to me that at least one person is in touch with reality.

We all know that, in Mr. Ewen's words "many SMEs are buckling under financial pressure caused by rising supplier costs and late payment from large, corporate customers", and we have all known that for a very long time. We all know, too - as apparently Mr. Maude does not - that laws, initiatives and Codes notwithstanding, no small supplier will under any circumstances shop a powerful customer to anyone at all for any reason at all, because anonymity is a doubtful proposition, and the consequences of whinging and whistle-blowing have been made all too clear to them, all too often.

I have said many times that I do not know the answer to this problem, and I regret to say that I am beginning to believe that there isn't one. Nice try, Mr. Maude, but no cigar.

HM Revenue & Customs is Creating a Graveyard

The Government needs money, and - as governments always have - it is looking to find it by raising or collecting taxes. Consequently, H.M. Revenue and Customs is taking an increasingly hard line all round in an effort to collect tax that it believes is owed - and actually, truth to tell, probably is owed.

The most visible result of the 'hard line' taken by HRMC is the increase in the number of Winding-up Petitions it has issued in the second quarter of this year.

HRMC was always a very good customer of the Court Service when it came to issuing Winding-up Petitions - as anyone can testify who has ever stood (as I certainly have!) in the issuing queue behind them - and in a very good economic climate that might not have been a very good thing, but it was at least an acceptable thing. At the moment, however, HMRC seems to be intent on excelling itself in this and every other area, and I wonder whether, given the present economic climate, that might not be a very bad thing indeed. I certainly find it a doubtful proposition.

Would it not be more sensible to allow companies facing 'critical' financial problems more time to pay? Would it not be more sensible to demand less tax from those companies for the time being so as to allow them to trade their way out of their problems and keep their employees, rather than sending potentially viable and vibrant businesses to the graveyard and creating further employment? Would it not be more sensible, in fact, to have a more flexible tax system?

According to Begbies Traynor's Red Flag Alert Report worst-hit sectors are travel and tourism, hotels, and general retailers. Forgive me if I'm mistaken, but I believe that the UK has been living on those particular golden eggs for years now.

So tell me, where's the percentage in winding up the Geese?