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Supply chain bullying affects one in five small businesses

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John Allan: Small businesses are no longer prepared to put up with sharp practices.

John Allan: Small businesses are no longer prepared to put up with
sharp practices.

NEW RESEARCH by the Federation of Small Businesses (FSB) uncovers alarming levels of widespread unfair dealing. In a survey of 2,500 FSB members, almost one in five (17 percent) said they faced supply chain bullying in one form or another in the past two years. The results indicate a serious deterioration of payment practices much wider than ‘pay to stay’.

The FSB is calling for a toughening up of the Prompt Payment Code, as well as fresh measures to stamp out the most heinous examples of bad practice like retrospective discounting and ‘pay to stay’. The Prompt Payment Code should be a key tool in improving payment culture. The Government has promised to toughen up the code.

The FSB wants to see any company looking to supply the public sector to extend the Government’s standard 30 day prompt payment terms to their own suppliers. Small businesses want 60 day payment terms to be set as an absolute maximum for any business signed up to the Prompt Payment Code.

If a company will not agree to 60 days they should not be allowed to sign up. As part of the FSB research, businesses were asked to give examples of the most common poor payment practices they had to deal with including pay to stay. The FSB has used these examples to create a list of the five most resented payment practices in use across the UK today:

Flat fees – ‘pay to stay’ 

Also known as ‘supplier assessment charges’ or ‘supplier investment payments,’ these are flat charges which companies levy on suppliers either as a requirement to be on a supplier list, or packaged as an investment into hypothetical future business opportunities. It is often indicated that non-payment will result in de-listing. New research has indicated that more than a quarter of a million (260,000) businesses could be facing so called ‘pay to stay’ charges after five per cent of businesses surveyed said they had been asked to make a payment by a customer or face delisting.

Excessively long payment terms – ‘pay you later’ 

In 2011 the EU issued a directive requiring all businesses to pay their suppliers within 60 days, or face interest payments on money owed. However, the UK implementation of the directive allows businesses to agree longer terms “provided it is not unfair to the creditor.” This has led to many companies insisting on payment terms of 90 or even 120 days. In effect this becomes an interest free loan from firms in the supply chain to large companies with excessive payment terms.

Exceeding payment agreements – ‘late payment’ 

As well as insisting on long payment terms, many companies are routinely exceeding agreed terms, or changing terms retrospectively to allow them to miss agreed payment dates. Also thought to be common is the practice of extending payment dates if money is owed on, or close to, the end of a financial reporting date in order to smooth a big company’s balance sheet.

 Discounts for prompt payment – ‘one for you, one for us’ 

Prompt payment discounts are arbitrary discounts big firms give themselves for paying early or even just on time. For example, a firm that has agreed to pay 120 days following receipt of an invoice may also apply an automatic discount of 3% if they pay on or before the 120th day.

Retrospective discounting – ‘balance sheet bonuses’ 

Some firms seek to apply retrospective discounts to outstanding money owed to a supplier. This involves the company effectively changing the terms of the contract signed with the supplier after a contract has been agreed. Methods used to extract these vary, but include threats of de-listing, withholding payment, ‘marketing contributions’ and previously unagreed discounts applied to specific volumes of business. John Allan, National Chairman, Federation of Small Businesses, said: “When the public think of their favourite brands, they are unlikely to connect them with the sort of immoral payment practices which are becoming all too common across an increasing number of industries. “However, it is clear that whenever these examples come to light, the public shares the same sense of moral outrage as the small firms that have to put up with them on a daily basis. “The Government has indicated that they are prepared to do more to improve the culture of payment practices in the UK and they are right to do so. “The sense I get from talking to our members is that small businesses are fast approaching the breaking point. They are no longer prepared to put up with these sharp practices. Brands that think they can continue to squeeze their suppliers with impunity may get a nasty shock when what they are doing comes to the attention of their consumers.”

 

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Business

Tenby sailing club works approved by national park

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A CALL for works to Tenby’s listed building sailing club to improve energy efficiency for the community organisation has been given the go-ahead.

In an application to Pembrokeshire Coast National Park, Harrison Richards of Tenby Sailing Club sought permission for replacing 24 timber windows at the Grade-II-listed Tenby Sailing Club, Penniless Cove Hill, with new Accoya timber double-glazed units.

The application added: “An energy survey conducted by Dragon Energy Consultants highlighted the existing single glazing and rotten window frames as a significant contributor to the club’s energy consumption.

“Tenby Sailing Club is a community organisation which seeks to organise activities year-round but faces significant energy costs being housed in a historic building. The current windows are beyond repair, with cracked glazing, decay, water ingress, and poor energy efficiency.

“The two windows at balcony level are not included, as they were previously replaced and remain in good condition. All new units will replicate the existing profiles, dimensions, glazing patterns, and overall appearance, ensuring no visual change to the building’s character.

“The neighbouring three-storey harbour stores occupied by Tenby Sea Cadets have previously replaced the building’s windows with double glazing. This like-for-like replacement in appearance will improve durability, weather resistance, and thermal performance while preserving the special architectural and historic interest of the listed building.”

An officer report recommending approval said: “The Sailing Club was built as a warehouse c. 1825, abutting the C17 sluice. Originally wine stores, it was later used by the local fishermen for stores and is now the home to Tenby Sailing Club, established in 1936.”

It said no adverse comments to the proposals had been received.

It added: “The proposal is to replace the majority (24 total) of windows in painted timber, double-glazed with face-mounted glazing bars of traditional scale and profile. Whilst a modern practice of glazing, the proposal involves no loss of historic fabric, provides an obvious visual improvement and addresses concerns as to heating costs.”

It finished: “The scheme is considered to be in keeping with the character of the listed building, and its setting in terms of design and form. As such, the application can be supported subject to conditions.”

The application was conditionally approved by planners.

 

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Business

Taxi fare shock in Milford Haven as drivers switch to meters

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TAXI passengers in Milford Haven are facing a sudden jump in fares, as drivers increasingly switch on their meters and charge full council-approved rates.

One Herald reader said a short return trip from Milford Haven to Neyland cost £30 — around double what he expected to pay.

But drivers insist the prices are not new — they are simply the official tariff now being applied.

Under Pembrokeshire County Council rules, the standard daytime fare starts at £4 for the first mile (£5 after 6pm), rising by around £3 per mile thereafter. Waiting time is also charged, meaning even short return journeys can quickly add up.

Higher rates apply in the evenings, at weekends and on bank holidays.

End of the £3 taxi

Milford Haven has long been known for cheap taxis, with short in-town journeys often costing as little as £3 — far below official rates.

That was down to competition, older vehicles, and the need to keep prices low in a town where many rely on affordable transport.

Drivers say those days are now over.

One local driver told The Herald: “People got used to cheap fares, but that was never the real price. Now we have to use the meter or we’re losing money.”

Fuel costs biting

Most taxis run on diesel, now around 170p per litre locally. For drivers covering long distances each day, the increase has hit hard.

Global tensions in the Middle East have pushed up oil prices, feeding directly into higher fuel costs in the UK.

With fare increases requiring a lengthy council process, many drivers say they have no option but to charge the full tariff.

Vulnerable hit hardest

The change is being felt most by those who rely on taxis the most.

Elderly residents, people on low incomes and those without access to a car are now facing higher everyday travel costs.

There has been no recent increase in Pembrokeshire’s official taxi fares, which have remained broadly unchanged since 2022.

The difference is simple: drivers are now charging them.

As one put it: “We’re not putting prices up — we’re just finally charging what we’re supposed to be charging.”

 

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Business

Cardiff Airport expects Easter passenger surge as demand rises

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CARDIFF AIRPORT is preparing for a busy Easter getaway, with more than 46,000 passengers expected to travel through the airport over the holiday period.

The figure represents an 18% increase compared to the same period last year, reflecting growing demand for both sunshine destinations and European city breaks.

The busiest routes this Easter are set to be Alicante, Dublin and Málaga, with flights operated by airlines including Ryanair, Vueling and TUI Airways.

Travellers heading for warmer weather can also take advantage of direct flights to the Canary Islands, including Tenerife, Lanzarote, Gran Canaria and Fuerteventura, alongside popular destinations such as Faro and Palma.

The airport says the increase builds on a strong start to 2026, with passenger numbers continuing to rise.

Chief executive Jon Bridge said the airport is approaching the one million passenger mark and expects the summer season to be its busiest since the pandemic.

He said: “It’s been an incredibly positive start to the year, and we’re looking forward to welcoming more passengers over the Easter period.

“Our teams are working hard to ensure travellers can start their holidays smoothly.”

Passengers travelling over Easter are being advised to allow extra time for their journey and check with airlines for the latest updates.

A total of 46,158 passengers are expected to pass through the airport between March 27 and April 12, with arrivals and departures almost evenly split.

Cardiff Airport said it continues to expand its range of destinations, including the addition of a direct service to Toronto, as it looks to strengthen its role in connecting Wales to international travel.

 

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