Consultation launched on plans to tackle late payment culture
The government has launched a consultation on plans to bring in tough new laws to tackle late payments.
The Department for Business Innovation and Skills has announced new proposals following a Downing Street summit on payment practices to give business groups further powers to challenge unfair payment terms.
The new laws would toughen the current Prompt Payment Code, increase transparency on payment practice of large and listed companies and give representative bodies greater powers to challenge unfair payment terms and practices.
The government hope that under the new laws small businesses will have more confidence to speak out against poor practice by larger customers.
Thwe government will also use public procurement to lead by example by committing to paying 80% of our invoices within 5 days, with a maximum of 30-day terms on all public sector contracts.
Business Secretary Vince Cable said: “Large companies using their economic might to impose unreasonable terms on their suppliers causes real problems for small businesses. It is a significant issue and there is agreement that we need to keep the pressure up to bring about real change.
“This is about making the UK a fairer and more trusted place to do business.”
Business Minister Matthew Hancock said:
“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.
Details of the consultation can be found on the Department for Business Innovation and Skills website.