Tesco and the Free Market Tradition.

There’s a news item here in Britain today, reporting the fact that the supermarket giant, Tesco, has been deliberately delaying paying its suppliers in order to improve its own financial position. This is a bad state of affairs, but it’s nothing new.

Back in the early eighties, a man called Lord Weinstock – head of the multi-national giant GEC – went public with advice to large companies: ‘Change your payment terms to your small suppliers. Pay them three monthly instead of monthly in order to improve your cash flow.’

I was a young revenue inspector at the time, and I saw many small traders in serious trouble. They were losing their livelihoods, their homes, and even their marriages in some cases, because they were contracted to large companies and their own cash flow was drying up. They had plenty of work on, but no money to pay their creditors. The lives of small people were being all but ruined.

Weinstock’s advice was the face of Thatcherism at the time, and it seems her ghost haunts us still.