Prime Minister David Cameron has unveiled plans for a government consultation on late payments. A government statement said it is aware that late payment continues to be a big problem for many of our small and medium sized businesses with 85 per cent saying that they have experienced this over the last two years.
The Prime Minister announced last month that the government will be launching a consultation on tackling late payment later this year where it will be calling for views on a range of questions including whether there is a case for further legislation or penalties.
David Cameron said: “It’s not right that suppliers are not getting paid on time for the work they do and the services they provide and I know that late payment can have devastating effects on our small and medium sized businesses.
“I am determined to make Britain the best place to start, grow and do business and to back people who want to work hard and get on. The government has already taken steps to help address this issue but I am clear that more needs to be done to build a business culture across all sectors of the economy that sees the fair, prompt and reliable payment of suppliers become a core corporate responsibility which is taken seriously at the most senior levels.”
Steve Halcrow, executive director at FPDC, said: “Late payment can severely damage small firms. They don’t have the same cash flow buffer as large businesses, so being paid on time can be the difference between being able to pay staff and not. And when a small firm is paid late they can become late payers themselves.”
Katja Hall, Confederation of British Industry chief policy director, said: “Late payment is a serious issue for all businesses but particularly for smaller firms, as cash flow is their life blood. Businesses already have a number of routes for recourse if they are paid late, but the reality is that few choose to act on late payment for fear of fall-out with their customers.”