New proposals have been unveiled that gives business groups further powers to challenge unfair payment terms and practices on behalf of their members.
New laws are being introduced, with existing codes of practice being bulked up, to tackle the issues of late payment and other unfair payment practices.
Some of the measures include:
- Consulting on ways to tackle poor payment practices, such as by giving representative bodies greater powers to challenge grossly unfair payment terms and practices
- Leading by example on public sector procurement
- New laws to increase transparency on the payment practices of large and listed companies and help change corporate payment culture
- Toughening up the Prompt Payment Code
With the organisations having further powers to challenge unfair payment terms on behalf of their members, it is thought that it will give small businesses more confidence to speak out against poor practices of their larger clients.
Business Secretary Vince Cable said:
“Large companies using their economic might to impose unreasonable terms on small businesses cause’s real problems. It is a significant issue and there is agreement that we need to keep the pressure up to bring about real change.”
Business Minister Matthew Hancock added:
“Small businesses are the economic backbone of the UK, but some large companies are squeezing the life out of them by imposing unreasonable payment terms. This behaviour must stop, once and for all.
I want to pay tribute to the efforts of the FSB in highlighting these payment practices and for working with us to start stamping them out.
Greater transparency is key and we are setting an example in government, by committing to paying 80% of our invoices within 5 days, with a maximum of 30-day terms on all public sector contracts.”