Government crackdown on late payments
20 May 2015
Newly-appointed business secretary Sajid Javid yesterday used his first speech to promise the government would introduce powers to tackle late payments from big companies to their suppliers.
Late payments are set to exceed £40 billion this year, with the average small business owed more than £30,000.
It’s bullying – pure and simple
Business secretary Sajid Javid
“There’s a situation familiar to small business owners up and down the country,” said Javid, speaking at a business centre in Bristol on Tuesday.
“A letter turns up from a larger customer changing payment terms, or charging them to remain a supplier, and in some cases even deducting that charge on the spot against payment owed. This pattern of behaviour is an outrage. It’s bullying – pure and simple.”
Javid said the government would launch a consultation later this year to widen the powers of trade organisations “to act on behalf of their members to challenge grossly unfair payment terms”.
He also said the government would fulfil its general election manifesto pledge to set up a Small Business Conciliation Service.
“The purpose is to avoid expensive legal costs and maintain business relationships by reaching mutually satisfactory agreements,” said Javid.
“This model has worked in Australia. We will explore it, and other models, and find what works best here in the UK.”
