The Labour Party is to declare war on late payments to small business as part of its strategy for the economy.

Leader Jeremy Corbyn will tell a Federation of Small Business seminar today (11 April) that a Labour government would “declare war on late payment” to small businesses as part of its strategy for growth, jobs and the economy.

Corbyn is to make three main pledges. To take tough action on late payments, scrap quarterly reporting and to get regional investment banks to improve access to finance.

The Labour leader will call it “a national scandal” that big companies were withholding more than £26bn from suppliers, forcing 50,000 of them out of business every year.

“Cash is king for any business, and big companies are managing their cash by borrowing - interest free - from their suppliers,” said Corbyn.

“Some of the biggest names in business are holding cash piles that don’t actually belong to them. It’s a national scandal. And it’s stopping businesses from growing and causing thousands to go bust every year. It kills jobs and holds back economic growth.”

He will pledge not to increase the corporation tax rate for small businesses and said Labour would scrap quarterly reporting for micro businesses if introduced next year.

“Labour is against small businesses having to report quarterly. It’s a burden, a distraction, that will hold entrepreneurs back,” he said.

“Labour will scrap quarterly reporting for small businesses with a turnover of less than £83,000 a year to help you focus on growing your business.”

At the beginning of 2016 Tesco was found guilty of systematic breaches of the Groceries Code, including illegally deducting huge sums from companies and delaying payments owed to them.

Groceries Code Adjudicator Christine Tacon had urged Tesco to pay money owed to suppliers in accordance with the terms for payment agreed. In September 2016, Tacon said Tesco still had not fully met this, but had made progress.