After almost nine months of consultation and consideration, on 19 June 2019 the Government announced a range of measures to tackle the UK’s £16bn late payment problem. These new measures were heavily criticised by a range of organisations including the National Federation of Builders and the Association of Accounting Technicians (AAT).
Last month, the outgoing Chancellor of the Exchequer, Philip Hammond MP, met with the CBI and FSB to try and give the measures a more positive gloss.
Following this meeting, Philip Hammond MP said, “We have already taken steps to wipe out the UK’s late payment culture. Businesses leaders were clear today that more can be done to end this blight – including through the use of innovative payment platforms.”
Small Business Minister Kelly Tolhurst MP added, “We recently announced ambitious new measures to ensure small businesses get paid on time. This includes holding company boards accountable for payment practices and proposing new powers for the Small Business Commissioner.”
However, small business owners remain less than impressed and have provided withering criticism of the measures.
Peter Humphrey of Kesblade Ltd, a small property firm based in Rochester, the small business minister’s constituency said, “The latest Government announcement on late payments was extremely disappointing.
Moving the Prompt Payment Code to the Small Business Commissioner is like shuffling the chairs on the titanic, it doesn’t change anything other than the owner. Likewise, a technology fund that amounts to around 17p for each British business is utterly pathetic.
“Big business should be forced to sign the Prompt Payment Code and pay their suppliers in a maximum of 30 days like AAT has repeatedly recommended. It’s not rocket science, but the Government just doesn’t seem to get it.”
Small business owner, Caroline Danks, owner of LarkOwl a small fundraising business in Devon said, “The Government doesn’t seem to understand small business.
“A tiny technology fund, moving responsibility for the Prompt Payment Code and adding more bureaucracy onto company boards will do nothing at all to end the multi-billion-pound problem of late payments.
“As the AAT campaign has shown, there is a lot of business and political support for a simple solution compel large organisations to sign a beefed up Prompt Payment Code that requires everyone to pay at least 95% of their invoices within 30 days, not 60, with fines for those who consistently fail to comply.
“It’s very disappointing that the Federation of Small Business has welcomed the Government measures but we must remember that most small businesses do not belong to the FSB.”
Phil Hall, AAT Head of Public Affairs & Public Policy said, “Small businesses appear to be less than impressed with Government action in this area. Let’s not forget that 73% of MPs back all three AAT recommendations to solve this problem and that the construction, finance, fashion and recruitment “industries have united around our proposals for big companies to sign the Prompt Payment Code, pay businesses within 30 days and face substantial fines if they persistently fail to do so. Government needs to urgently go back to the drawing board, look at the broad consensus for meaningful change and think again.”