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The Forum of
Private Business
www.fpb.org
RELEASE DATE: 19 September 2005
RELEASE TIME:
IMMEDIATE
DEFRA faces £40 million late payment bill over foot and
mouth
Private businesses are set for an astonishing £40m payout in
taxpayers' money after scoring a high court victory over DEFRA.
For the
landmark judgement could mean the Government department will be forced to
reluctantly pay out millions to a long queue of other contractors still waiting
to be paid for disposing of millions of livestock during Britain's foot and
mouth epidemic five years ago.
Ironically, the Government department was
forced to fork out several million pounds extra as a penalty for delay in
payment, under recent legislation which gives a firm a statutory right to
interest on a debt.
"We welcome this court judgement as it proves even
officials of a Government department cannot get away without paying their
debts," said Nick Goulding, chief executive of The Forum of Private Business
(FPB) which championed the introduction of Statutory Right to Interest
(SRI).
The late payment act was brought in to tackle the major problems
many firms face in having to wait excessively long periods for payment of money
owed to them for goods or services.
The FPB, which campaigns for the
rights of more than 25,000 private firms across the UK, spent four years
fighting in support of a number of private contractors kept waiting for payment
by DEFRA for work carried out during the foot and mouth outbreak.
Now
they achieved a major success in supporting the case of Harry Ruttle plant hire
of Chorley, Lancashire. This company took DEFRA to court and won their claim for
outstanding debts over £10 million plus costs and interest on what they were
owed for digging disposal pits on farms during the foot and mouth
outbreak.
DEFRA officials were criticised in the high court judgement for
having no real grounds for refusing to pay the bill. And DEFRA will have to pay
Ruttles over £1 million for the cost of the lengthy court hearing in
London.
"This case was only the tip of the iceberg where DEFRA refused to
pay a host of contractors for legitimate work they carried out during the foot
and mouth outbreak," said Mr Goulding.
"As a result of the precedent set
by this court judgement, we will be encouraging several other contractors we
have been supporting to pursue DEFRA for payment , and claim interest at a rate
of over 12% for late payment as their statutory right. This will mean
DEFRA having to pay out up to another £40 million plus interest."
FPB
BACKGROUND:
The Forum of Private Business (FPB) was formed in 1977 and is
a pressure group fighting on behalf of private businesses. The FPB represents
approximately 25,000 UK-based businesses employing in excess of 600,000 people,
and is a powerful lobbying voice in both the UK and the European
Union.
The FPB, as the only full UK member of UEAPME - the organisation
that represents small and medium-sized enterprises (SMEs) in Europe - is the
most prominent advocate of UK SMEs in Brussels and has a track record of
positively affecting legislation prior to its introduction in the UK.
The
FPB also provides a range of business services aimed at increasing member
efficiency and profitability. Visit www.fpb.orgMEDIA CONTACTS:
Ben Pinnington, media manager
Tel: 01565 626019
Mobile: 07887 562900
Email: ben.pinnington@fpb.orgRex Garratt, press officer
Tel: 01565
634709
Mobile: 07775 756307
Email: rex.garratt@fpb.orgPress office fax: 0870 241 9570
Head
Office:
Ruskin Chambers
Drury Lane
Knutsford
Cheshire
WA16
6HA
FPB, Ruskin Chambers, Drury Lane, Knutsford, Cheshire WA16
6HA