The Government’s Small Business, Enterprise and Employment Bill doesn’t go far enough to address the cultural issues that underpin and drive late payment and we need to make sure that it does.
The Bill fails to stand up to powerful vested interests on behalf of small businesses and the millions of people they employ. The business associations I have spoken to see the Bill as a ‘massive disappointment’ on late payments, and I will be tabling amendments to address these issues.
The fundamental finding of the cross-party inquiry I held last year, was that late payments reflect the culture of a company, which is ultimately down to the company’s leadership. Late payments are a form of corporate bullying, because large companies are able to exert their power over small companies.
There is a power imbalance between large companies and small companies, and late payment needs to be seen as being as unacceptable as tax evasion.
I am pleased to see that some of the issues raised by the cross-party inquiry I held into late payments last summer have been acted on, for example the need to review the misused Prompt Payment Code.
Other recommendations for example to require fair payment terms for all the supply chain of public contracts have been watered down, after the Government promised that they would be introduced. But there was little to celebrate for business to business contracts; even article 7 of the EU late payment directive which gives redress for small businesses owed money from late payments whilst protecting their anonymity hasn’t been enacted by the Government. And as I say the key issue to tackle the abuse of power by large companies has been ignored by the Government.
This fact that late payments are even on the agenda is a great boost to everyone who has supported me, and my partner organisations, in the Be Fair – Pay on Time campaign because we can now see real results from our hard work.
At every step of the campaign, whenever we have achieved good publicity, we have forced the Government to take more action in this area albeit half-hearted. So we must keep up that pressure if we are to make a real difference to small and medium enterprises around the issue of late payments.