The survey, commissioned by engineering services bodies BESA and ECA, identified mental health issues in SME staff due to late or unfair payments including: stress (29 per cent), depression (14 per cent), extreme anger (nine per cent) and suicidal feelings (three per cent), directly resulting from late or unfair payment.

Other major findings included:

• More than two in 10 (22 per cent) SME owners have had to reduce their salary or stop taking a salary for a period of time, as a result of late or unfair payment.
• Those working for SME businesses in London reported the highest number of mental health issues among staff due to late or unfair payment (42 per cent). Businesses in the North and East reported the smallest number of mental health issues (34 per cent each).
• Compared to over 55s, under 35s were eight times more likely to say someone at their business had experienced suicidal feelings (eight per cent vs one per cent), and four times more likely to recognise self-harm among staff from unfair payment (four per cent vs one per cent).

BESA director of legal and commercial, Debbie Petford, stated: “This poll confirms what previous industry-wide surveys have shown – a dual crisis of mental health problems and unsustainable business practices. With this growing evidence of the huge social and economic damage caused by systemic unfair payment practices, the question should no longer be what is the cost of reforming the status quo, but how can we afford not to?”

ECA director of legal and commercial, Rob Driscoll, commented: “These shocking new findings show how late and unfair payment is causing a wave of mental health issues right across the economy and society. With mental health now rightly in the spotlight, it’s beyond the pale that large businesses continue to impose such issues on SMEs across industry.”

Overall, just over seven in 10 SMEs (71 per cent) across the entire economy are paid late. The worst affected sectors were legal (90 per cent) and construction (82 per cent).

The construction sector, which faces the additional burden of cash retentions which other sectors do not encounter, also fared poorly among mental health issues from unfair payment.

BESA and ECA are calling on the Government to give the small business commissioner tougher powers to sanction late payers across every sector, as well as to legislating for a retentions deposit scheme to protect construction SMEs from systemic abuse of cash retentions and upstream insolvency.