New measures to tackle the issue of late payment to small businesses have been unveiled today by the Small Business Minister Kelly Tolhurst, who has also launched a call for evidence on the matter.
Part of the Government’s Industrial Strategy, the proposals include measures to empower trade bodies to highlight best and worst practices in order to deliver practical improvements in payment behaviour.
Nearly a quarter of UK businesses report that late payment threatens their survival, while research produced by the Federation of Small Businesses suggests tackling the issue represents a huge opportunity for economic growth, and could add £2.5 billion to the UK economy.
The new proposals include:
- a call for evidence to consider the best way company boards can put in place responsible payment practices throughout their supply chain, for example giving a non-executive director specific responsibilities for the company’s prompt payment performance;
- empowering trade bodies to highlight the best and worst practices in payment behaviour
- promoting innovative technologies, such as the latest accounting software, to help small firms manage their payments processes.
Commenting, Ms Tolhurst said: “Our 5.7 million small businesses are the backbone of our economy, and ensuring we remain one of the best places in Europe to start and grow a small business is a key part of our modern Industrial Strategy.
“Over the past 5 years the amount owed to businesses in late payments has halved, but we will go further to make sure all of our small businesses are treated fairly.
“Today’s new call for evidence will help us identify the most effective way possible to tackle this issue once and for all and ensure small businesses are on a level playing field with their larger counterparts.”
CECA is seeking members’ views on this issue – if you would like to input on our work on this matter contact CECA Director of External Affairs Marie-Claude Hemming.