Use Spring Statement 2019 to act on late payment, chancellor told
Philip Hammond should use next month’s Spring Statement 2019 to translate his words on how to stop late payment hurting small businesses into actions, a lobbyists says.
Speaking in March 2018, the chancellor promised to launch a call for evidence on ways the government can “eliminate the continuing scourge of late payments”, points out the FSB.
That call for evidence closed in November 2018, and officials have been assessing the responses ever since, cueing up Mr Hammond’s March 13th statement as the ideal time to act.
“In last year’s Spring Statement, the chancellor…promised to act on the late payments crisis,” said Mike Cherry, national chairman of the Federation of Small Businesses (FSB).
“As this year’s Spring Statement approaches, small businesses want him to follow up these words with tangible actions.”
Chief among those actions, if the federation got its way, is to grant the Small Business Commissioner the ability to undertake ‘mystery shopper-style’ investigations.
These would be conducted into the payment practices of large companies including verifying ‘Duty to Report’ on payment practice data and investigating supply chain bullying.
IPSE, the contractor trade body, which said on Monday that late payment was still a “serious problem” for tiny firms across the UK, agrees that the commissioner needs extra teeth.
“Paul Uppal should be given more powers to clamp down on late payment – including fining the worst offenders,” said IPSE senior policy adviser Jonathan Lima-Matthews.
“And we would urge the Office of the Small Business Commissioner to roll out its new ‘traffic light’ system soon to shine a light on bad practice.”
The FSB says large firms should be made to make a non-executive director responsible for payment practice, and wants all FTSE 350 firms to sign a stronger Prompt Payment Code.
“Our [recommended] reforms are not the silver bullet that will suddenly signal the end of poor payment practices,” Mr Cherry conceded, “but are certainly important and necessary steps towards this.”
His comments coincide with another business lobbyist, the British Chambers of Commerce, describing cashflow as a continuing concern for firms, given that the balance of them reporting improved cashflow in this first quarter was “weak.”