LOBBY groups have joined forces to call on the Government to do more to tackle the culture of late payment to help small businesses survive during the economic downturn.

They have written to Business Minister Mark Prisk, asking for a plan of action to address the issue which devastates small firms’ cash flow.

The group, which includes the Forum of Private Business, Lloyds TSB and credit referencing agency, Graydon UK, is supporting the Government’s new Finance Fitness campaign.

The group’s demands include strengthening of the Prompt Payment Code to make it something that businesses have to opt out rather than opt into.

It also wants the public procurement process to promote best practice, assessing evidence of prompt payment via Pre-Qualifying Questionnaires (PQQs) and avoiding using businesses with over 250 employees if they are notoriously bad payers.

And it said that the new Groceries Code Adjudicator should be able to impose financial penalties on retailers who are found guilty of treating their suppliers unfairly.

Research from Graydon UK shows that 76% of respondents believe the Government is not doing enough to protect UK businesses from late payment.