Ministers vow crackdown on late payments in bid to help small businesses
2 min read
Ministers have promised a fresh crackdown on companies that fail to pay their suppliers on time.
Late payments are thought to cost the UK economy some £2.5bn a year, with small firms particularly badly affected by the practice.
Under new plans being considered by the Government, big companies could be forced to appoint a director responsible for ensuring suppliers are paid on time.
Meanwhile ministers have also pledged to pay 90% of the Government's own invoices from small businesses within five days - up from a current pledge of 80% paid in that timeframe.
Unveiling the plans, Small Business Minister Kelly Tolhurst said: "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."
She added: “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."
But Labour’s Shadow Business Secretary Rebecca Long-Bailey accused ministers of “tinkering around the edges" with an "astonishingly weak" announcement.
The frontbencher said: “Late payments still blight SMEs because the Conservatives refuse to address the imbalance between large companies and small businesses."
"Today’s astonishingly weak policy announcement won’t change that one bit. This is just tinkering around the edges.
"We know that the Government doesn’t care enough to do anything about this enormous problem for SMEs. After Carillion’s collapse we saw just how reluctant they were to use the powers they already have to prevent late payments."
Mike Cherry of the Federation of Small Businesses welcomed the latest move, however, saying late payments were the biggest challenge affecting small firms.
“It is good to see the government getting serious about the issue, especially when it comes to large firms paying their supply chains promptly.”
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