Companies that pay suppliers late will be fined under new government legislation
Sir Keir Starmer said 'it's time to pay up' as the Prime Minister announced plans to impose fines on large companies that persistently pay suppliers late.
As many as 38 businesses shut down each day, partly owing to late payments, according to the Government, with tradespeople, shopkeepers and start-up founders particularly vulnerable.
It is estimated that late payments cost the economy £11bilion a year.
'Late payments are one of the biggest barriers to small business growth - causing cashflow problems that stop firms from scaling up and investing in their future,' the Government said.
'Every day, hardworking businesses close their doors because they aren't paid on time.'
The small business commissioner will be handed new powers, including carrying out spot checks and enforcing a 30-day invoice verification period to speed up resolutions to disputes.
The legislation will also introduce maximum payment terms of 60 days, reducing to 45 days, to ensure businesses are paid on time.
Small businesses have been quietly battling late payments, with the issue only worsening since the cost of living crisis.
Research by the Federation of Small Businesses trade body in 2023 found if late payments had been made on time, 50,000 business closures could be avoided each year.
The definition of prompt payment for a small business suppliers, as per the Prompt Payment Code (PPC), is to pay 95 per cent of invoices from small businesses with fewer than 50 employees within 30 days.
However, the code is voluntary and plenty of businesses flout the rules.
The Prime Minister said: 'From builders and electricians to freelance designers and manufacturers - too many hardworking people are being forced to spend precious hours chasing payments instead of doing what they do best – growing their businesses.
'It's unfair, it's exhausting, and it's holding Britain back. So, our message is clear: it's time to pay up.'
Tina McKenzie, policy chair of the FSB added: 'Today's plan is an encouraging commitment from the Government to take the side of small businesses in the great growth challenge ahead.'
The crackdown on late payments is part of a wider package, including plans to pump £4billion of financial support into small businesses.
This includes £1billion for new firms, with 69,000 start-up loans and mentoring support.
Michelle Ovens CBE, founder of Small Business Britain said: 'These job creators and economy builders will benefit from a huge boost to funding through the British Business Bank, a boost to skills, support for high streets and a long hoped for legislative backing for getting paid on time.
'We will not see economic growth without small business growth, so I am eager to get on and help the Government deliver on this agenda - and help small businesses regardless of their background start, grow and thrive.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Rhyl Journal
28 minutes ago
- Rhyl Journal
Sturgeon: Salmond happier for SNP to be destroyed than succeed without him
In her memoir, Frankly, the former first minister said she had come to the realisation that her former friend and mentor 'wanted to destroy me'. She said her relationship with the late politician began to deteriorate as soon as she became leader of Scotland. Mr Salmond, who died last year, quit as SNP leader and first minister in 2014 after the Scottish independence referendum. Ms Sturgeon also claims in her book that Mr Salmond had admitted to her that the 'substance' of one of the sexual harassment complaints had been true. The former Alba Party leader was acquitted of all charges relating to the allegations at court in 2020, while a judicial review found the Scottish Government's own investigation of him was tainted with apparent bias. Ms Sturgeon said her former mentor had created a conspiracy theory about Scotland's core democratic institutions to shield himself from accountability. She said Mr Salmond never produced a 'shred of evidence' to support these claims. She accused him of trying to 'distort' and 'weaponise' the trauma of victims. In her book, which was on sale in some places ahead of schedule on Monday, she said: 'In his (Salmond's) efforts to turn himself into the wronged person, he demonstrated that nothing and no one was sacrosanct for him. 'There was never the merest hint of concern about the damage he did to the party he previously led. 'Indeed, it felt to me that he would have rather destroyed the SNP than see it succeed without him.' She accused her former boss of having 'impugned the integrity' of the institutions 'at the heart of Scottish democracy', including the Government, Police Scotland and Crown Office. She went on: 'The fact that he never produced a shred of credible evidence that a conspiracy existed, because it didn't, wasn't enough to stop him seeking to damage the reputation of these institutions and shatter the morale of those who worked in them. 'He was prepared to traumatise, time and again, the women at the centre of it all. 'A jury concluded that what they experienced wasn't criminal, but that does not mean those experiences didn't happen. 'Even if he never said so explicitly, he was accusing them of being liars, of making it all up.' The former SNP leader said Mr Salmond had made his former allies and SNP colleagues 'mortal enemies' in the fallout over misconduct claims against him. 'In that regard,' she wrote, 'I was clearly public enemy number one. For a while, I told myself that the bonds between us would be stronger than his thirst for revenge. 'Eventually, though, I had to face the fact that he was determined to destroy me. 'I was now engaged in mortal political combat with someone I knew to be both ruthless and highly effective. 'It was a difficult reality to reconcile myself to. 'So too was losing him as a friend. I went through what I can only describe as a grieving process. 'For a time after we stopped speaking, I would have conversations with him in my head about politics and the issues of the day. 'I had occasional, but always vivid, dreams in which we were still on good terms. I would wake up from these feeling utterly bereft.'
ITV News
28 minutes ago
- ITV News
Keir Starmer promises government's 'full backing' to get Sunderland's Crown Works Studios on track
Sir Keir Starmer has promised the Government's 'full backing' to get Sunderland's flagship Crown Works Studios project back on track. It emerged earlier this summer that the main private backer behind the £450 million film and TV studio development had pulled out. North East leaders are now pushing to find new investors to ensure that the huge regeneration, earmarked for the banks of the River Wear in Pallion, can go ahead. Speaking to the Local Democracy Reporting Service on Tuesday, the Prime Minister pledged his support in the hunt for new investment that can deliver a project hailed as the biggest boost for the region since the arrival of Nissan. The Government has already put £25 million into the Crown Works plans, via the devolution deal which established the North East mayor last year, while the local authorities have committed to a total public investment of up to £120 million. Asked what support Downing Street had offered since Cain International's withdrawal from the Crown Works deal, Sir Keir said: 'Let me be really clear on this because I know it really matters – we really want to see this landmark project come to fruition. It is such a good project, good for jobs, good for growth. 'We announced £25 million of funding for the studios in the Autumn Statement to support filmmaking and economic growth, and we are working with the mayor [Kim McGuinness] very closely because we need to get private investors to get in behind this. 'I am determined that we will do everything we can to see this project come to fruition. It is really important locally, it is a huge thing, and we need to give it our full backing.' Global entertainment company Fulwell Entertainment, who were behind the Sunderland 'Til I Die Netflix series, had partnered with Cain on the joint venture to build 19 sound stages on the riverside plot. The firm has said it remains committed to working with Sunderland Council to find new funding for the filmmaking hub. It had been hoped that the scheme could create more than 8,000 jobs and Labour's new creative industries strategy specifically highlights the 'game-changing plans for film production in Sunderland'. Planning permission for the development was secured last year, but detailed approval has only been granted for a first phase of building that would include four sound stages, production offices, workshop buildings, and a multi-storey car park. City council leader Michael Mordey has previously said that he expects to have new funding secured by the time that land remediation works at the site are completed later this year.
The Independent
28 minutes ago
- The Independent
Starmer accused of ‘abject failure' as people smuggling arrests fall under Labour
People smuggling arrests by the UK's organised crime agency have fallen under Labour, despite Sir Keir Starmer 's pledge to "smash the gangs", as the number of small boat migrants arriving since he took charge soars past 50,000. The latest National Crime Agency (NCA) data shows 192 people were arrested for organised immigration crime in the year to April – down 16 per cent from 229 under the Tory government the previous year. Labour has faced growing criticism over its failure to cut the number of people making the perilous crossing, with education minister Baroness Jacqui Smith admitting the figures were 'unacceptable'. Former Tory immigration minister Robert Jenrick said the latest arrest figures proved 'it's never been easier to be a people smuggler', while former home secretary Chris Philp said they proved Starmer's big talk about smashing the gangs has been an 'abject failure'. It comes as the government ramps up its efforts to tackle the issue amid growing public anger, which has sparked a series of violent protests outside migrant hotels across the country. The prime minister has adopted a hardline approach on immigration, with a string of new measures announced, as he tries to win back voters and fend off the surge in popularity from Nigel Farage's Reform UK. Earlier this year, Yvette Cooper announced an extra £100m to tackle people-smuggling gangs, including 300 more staff at the NCA ' focused on intelligence targeting crime gang members'. And last week, Sir Keir confirmed that the first migrants had been detained under the new 'one in, one out' swap deal between the UK and France – although none have yet been sent back to Europe. The Home Office has also expanded its 'deport now, appeal later' scheme, which sees foreign criminals deported before their appeals have been heard. Despite the fall in people smuggling arrests last year, the NCA said it has "dedicated more resources than ever before' to tackling the threat from organised immigration crime. NCA acting deputy director Dan Barcroft said: 'Arrests on their own are not the only way to judge impact. We have also achieved record numbers of disruptions against people smugglers – 347 last year, up almost a third - each of which will have removed, prevented or reduced a criminal threat.' 'Arrest figures may fluctuate, but over the last four years the NCA has been involved in more than 900 arrests relating to organised immigration crime in the UK and overseas.' The Home Office told The Independent that further people smuggling arrests have been made by Immigration Enforcement and police forces, but refused to share any details. A spokesman said: 'We are taking firm and targeted action to dismantle the organised criminal networks responsible for dangerous small boat crossings – networks that put vulnerable lives at risk and undermine border security.' Reacting to the figures, Mr Jenrick said: 'Starmer said he'd smash the gangs but arrests of people smugglers are down and record numbers of migrants have crossed this year. For all of Starmer's talk, it's never been easier to be a people smuggler.' A Labour MP on the right of the party told The Independent they were 'frustrated' by the government's pace of action. They said: 'The public think we're basically not doing anything and don't believe smashing the gangs will make any material difference. And so far, their suspicions are being borne out by the facts. We have to move heaven and earth to get and show we have control.' Over the past decade, the NCA has been involved in over 2,200 arrests linked to immigration crime in the UK and overseas, with a 93 per cent conviction rate. While the figures do not exclusively cover small boat migration, a large proportion of such crimes involve bringing people across the Channel. This includes arrests across the people smuggling operations chain, from those who supply small boats to lorry drivers illegally ferrying migrants. The NCA told The Independent it is currently leading 91 investigations into organised immigration crime. Despite lower arrest numbers, the NCA said its increased disruptions 'reflect a move towards taking the fight to gangs upstream, focusing on the highest harm networks, and hitting them where the impact on their business will be greater'. One such example last month saw the NCA and Bulgarian law enforcement seize 25 inflatable boats set for use by people smugglers crossing the Channel. Sunder Kutwala, director at the British Future thinktank, said the government's best shot at tackling the problem is to scale up the one-in-one-out deal with France to 500 or 1,000 people a week. 'If [people smuggling] is a lucrative business, and the barriers to entry are pretty low and the cost of getting your dinghy slashed is quite low – or getting low-level operatives arrested is low – you'll always get new entries to the market' he told The Independent. 'The government has now got a shot at establishing the returns deal and, with enforcement, it looks more viable than any of these offshoring models [like Rwanda]. If I was the government, I would [scale up] quickly not slowly.' The number of migrants crossing into the UK by small boats is up 47 per cent from the same time last year, at record levels. Fourteen people have already died this year trying to cross into the UK, with the highest on record (73) last year, and a woman, 30, died on Monday while trying to board a boat attempting to make the crossing to the UK from Dunkirk. The Mayor of Dunkirk, Patrice Vergriete, said that the situation "can't stand much longer". He called for the creation of a "legal immigration route to the UK" saying "our coastline is a daily witness to an absurd, ineffective and terribly cruel management of the migration crisis".
