A cross-party group of MPs is being assembled to address the growing problem of supply chain bullying by major brands.

Some large companies, particularly supermarkets that have embarked on a price war, have been accused of squeezing small suppliers with punitive payment rules.

The Federation of Small Businesses (FSB) says one in five businesses – about one million in total – have been subjected to immoral payment terms.

One in 20 had been asked to “pay to stay”, in other words pay a lump sum to their client for the privilege of remaining within its supply chain.

A cross-party roundtable was hosted by the FSB today, with Debbie Abrahams MP, who led an investigation into late payment practices last year, hosting the debate.

Abrahams said: "Late payment is something that CEOs and board members in big businesses can influence and I have always maintained that a late payment culture in a company is set at board level.

"That makes it a leadership issue and it's time that deliberately paying late, finding ways to pay late, or making unilateral changes to pre-agreed contracts is seen as being as unethical as tax evasion.

"It's simply a case of big businesses using smaller businesses as a credit line by applying bullying tactics that are unfair and have the knock-on effect of stifling growth in the economy.”