Small firms call for late payment reforms

Responding to this year’s Queen’s Speech the Federation of Small Businesses (FSB) has urged the need for late payment reform.

Federation of Small Businesses (FSB) National Chair Martin McTague said “A worsening late payment crisis is currently threatening the futures of more than 400,000 small firms. The Audit Reform Bill creates space to take forward our proposal to make audit committees directly responsible for supply chain practice, thereby moving prompt payment up the corporate environmental, social and governance agenda and alleviating the devastating personal impacts of poor payment practices, which keep thousands of small business owners awake at night.”

“Small firms have been waiting for action on this front for three years, whilst poor payment practices worsened over lockdowns. Legislating to make reporting on payment and supply chain practice mandatory in annual reports is the most effective measure at our disposal to spur change.”

“Ensuring more small firms can be part of public sector supply chains would be hugely beneficial to local economies, the taxpayer and the quality of public services. The message again is clear: words should be matched by action.”

“We look forward to working with policymakers on protecting access to cash as part of the new Financial Services Bill, ensuring vulnerable groups can access notes and coins freely, and giving the City regulator a clear mandate where cash is concerned.”

“Energy security has rightly moved up the Government’s agenda in recent months. On the ground, we have a situation where small firms are caught between the consumer price cap and the leverage that big corporates can yield when negotiating contracts.”

“More direct financial support is what will make the difference to our members – reducing the risk that further hikes in utility bills feed through to even higher consumer prices – alongside a Help To Green initiative to incentivise on-site energy generation.”

Dr Roger Barker, Director of Policy at the Institute of Directors, said “We welcome the Government’s stated ambitions of driving economic growth and easing the cost of living. We also welcome the Government’s focus on higher education reform, championing international trade, boosting renewable energy, delivering jobs across the country, the creation of the UK Infrastructure Bank and providing new opportunities for small businesses in public sector procurement. The reform of Companies House within the Economic Crime and Corporate Transparency Bill will also be important for directors.”

“We are glad to see that, despite recent media speculation, the Government will bring forward draft legislation to create new competition rules for digital markets and the largest digital firms, as well as improve the governance of English football through the creation of a new regulator.”

“Despite being overlooked in the speech itself, we are also relieved to see that the Government will be publishing an Audit Reform Bill, even if only in draft form. Recent scandals, such as Carillion, BHS and P&O Ferries, have shown that there are gaps in our corporate governance framework, reducing trust in British business. We have been working with the Government to ensure that these proposals are both robust and practical. A year on from the Government’s white paper, these widely supported and uncontroversial changes are now long overdue and we would urge Government to ensure that the proposals are implemented in a timely fashion.”

The Institute of Directors has welcomed plans announced in the Queen’s Speech to complete the establishment of the UK Infrastructure Bank, utilising its £22bn financial capacity to “support growth, improve connections across the country and help level up the UK whilst supporting our transition to net zero by 2050”. The GMB union also supported the move saying it was a “great opportunity to stop UK renewables jobs going overseas.