Skip to main content

New Enterprise Bill to help small businesses settle late payment disputes

20 May 2015

In his first speech as Business Secretary, Sajid Javid has announced that a new Enterprise Bill aimed at tackling problems faced by small businesses will be brought forward and included in the Queen’s Speech.

Speaking at a business centre in Bristol, Mr Javid said: ‘Small businesses are Britain’s engine room ... As Business Secretary one of my first steps will be to bring forward an Enterprise Bill that helps them to succeed and create jobs. We will sweep away burdensome red tape, get heavy-handed regulators off firms’ backs and create a Small Business Conciliation Service to help resolve disputes.’

The proposal for a Small Business Conciliation Service was included in the Conservative Party’s manifesto. The new body would assist in settling disputes between small and large businesses, especially over late payment practices, and would help companies to avoid costly legal expenses.

Mr Javid said: ‘There’s a situation familiar to small business owners up and down the country. A letter turns up from a larger customer changing payment terms, or charging them to remain a supplier and in some cases even deducting that charge on the spot against payment owed. This pattern of behaviour is an outrage. It’s bullying – pure and simple.’ He said that in 2008 late payment cost British business £19bn but this year the figure is set to exceed £40bn.

Chris Bryce, chief executive of the Association of Independent Professionals and the Self-employed, welcomed the announcement of the conciliation service, saying: ‘[This] could play a key role in making sure the smallest businesses have somewhere to turn when they are being paid late and could help deliver a better payment culture where small and large businesses work more harmoniously together.’

Other measures to be included in the Enterprise Bill are: plans to cut red tape for business by at least £10 billion over the next five years, which involves targeting independent regulators for the first time; an extension of the primary authority scheme, which allows businesses to get advice on regulation from a single local council; and a review of the business rates scheme.