Sajid Javid to tackle late payments owed to small businesses in new enterprise bill
The new business secretary will today promise to cut red tape and put at least £10bn back in the pockets of business owners over the next five years.
Speaking at a business centre in Bristol, Sajid Javid will announce a new enterprise bill to be included in the Queen’s speech next week. He will say: “As part of our long-term economic plan, we will sweep away burdensome red tape, get heavy-handed regulators off firms’ backs and create a Small Business Conciliation Service to help resolve disputes.”
The new conciliation service is expected to help settle disputes between small and large businesses. According to the department for business, innovation and skills, small firms in Britain are owed over £32bn in late payments from larger entities.
Christian May, head of campaigns at the Institute of Directors (IoD) welcomed the announcement, telling CityAM that Javid is “absolutely right to identify late payment as a serious problem for small firms.”
“Two-thirds of our SME members have suffered from late payment, with knock-on effects for business growth,” May said, citing an IoD survey from last year that found more than a quarter of businesses receiving money late had to delay payment to their own suppliers.
An existing government initiative, the Prompt Payment Code, requires company signatories to pay their suppliers on time, but many business leaders agree more must be done.
John Longworth, director general of the British Chambers of Commerce, said yesterday: “Businesses have been let down by successive governments promising to make inroads, so we will be watching carefully to make sure these proposals are delivered.”