By Daniel Hunter
With new faces joining the Cabinet this week, details on the priorities of the Government’s first Queen’s Speech are also beginning to be confirmed.
Key among these will be a new Bill focusing on small business deregulation which, according to Beatrice Bartlay, entrepreneur and founder of specialist employment company 2BInterface, should address the key issue of late payments head on.
Ms Bartlay said: “Over the past few years I have been repeatedly calling for action to be taken on late payers including looking at imposing fines on businesses that fail to pay their suppliers promptly. For many small businesses, cash flow is king. If a business does not pay their supplier on time then that has a huge impact on that enterprise, which then ends up acting as paymaster and banker. This simply cannot be fair or equitable and has been a huge challenge throughout the economic downturn.
“Back in 2013, I joined both the Government and my peers in agreeing that the repercussions of late payment ought to be financial — indeed, many companies do struggle to enforce ‘interest added credit’ style charges on payments for goods and services rendered that come after the period stated on individual agreed terms. But any reforms to how late payments are treated should consider VAT-style fines — which are re-invested by the Government into our country’s small businesses.”
Bartlay added: “Fines levied on late payers should be given to those SMEs who are applying to the Government for help through both grants and also Time To Pay, which is a service run by HMRC for those who are struggling to meet tax and National Insurance liabilities.”
“The news that the Queen’s Speech will include a new Bill encompassing not only prompt payments, a strengthening of the Prompt Payment Code and also the creation of a Small Business Conciliation service to mediate in disputes, including late payments, has to be welcomed. As ever, the devil will be in the detail, but we are already warmly anticipating its publication,” she said.
The Conservative Party manifesto gave a clear indication of the key priorities it intends including in the Bill:
“We will cut a further £10 billion of red tape over the next Parliament through our Red Tape Challenge and our One-In- Two-Out rule This will support our aim to make Britain the best place in Europe, and one of the top five worldwide, to do business by 2020. We will also treble our successful Start Up Loans programme during the next Parliament so that 75,000 entrepreneurs get the chance to borrow money to set up their own business We will raise the target for SMEs’ share of central government procurement to one-third, strengthen the Prompt Payment Code and ensure that all major government suppliers sign up We have already helped small businesses by increasing the Annual Investment Allowance, reducing the burden of employment law through our successful tribunal reforms and supporting 27,000 new business mentors We will go further by establishing a new Small Business Conciliation service to mediate in disputes, especially over late payment.”
Bartlay concluded: “The last Budget did not address late payments enough, however I wait with baited breath to see what the next 12 months will bring. I am confident that with the support of the industry, and the Government, that a change is overdue, and will come. I firmly believe that any supposed weakness can be turned into an advantage, and the damaging effect that late payments have on business should be flipped into helping to support those who are knocked the most.”