SCROOGE firms who fail to pay their bills on time could soon face big penalties, according to Euro MP Gary Titley.

He told the European Parliament that late payments "throttle many viable businesses to death".

The Labour MEP welcomed new moves to tackle the problem which he said would help create an "environment where entrepreneurs and businesses can flourish".

Under the measures proposed, creditors would be entitled to charge a statutory interest rate on their debts, encouraging debtors to pay early. And for unpaid debts, creditors would be able to recoup their costs for collecting bad debts.

Mr Titley predicted that the new laws would introduce "greater certainty" in business deals Europe-wide and encouraged small firms to take advantage of the single market.

"Membership of the single market, the largest trading bloc in the world, is crucial for jobs in the North West," he said.

"Nearly 40 per cent of small and medium-sized enterprises in the region already have trading links with other EU countries.

"And after new countries join the EU in a few years' time, they will have easy access to 500 million customers. That's as big as the American and Japanese markets put together."

The late payment measures were approved overwhelmingly. They now go to the European Council of Ministers for final decision.

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