FSB calls for Small Business Commissioner later payments powers

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The government is consulting on plans to appoint a Small Business Commissioner. You can express your views on gov.uk.

Here’s what the government envisages the new role to do: “The Commissioner’s services will enable smaller firms to resolve disputes with other businesses quickly and easily. This will preserve important commercial relationships without the need to go to court.”

Sounds useful. But the Federation of Small Businesses (FSB) has called for the new Commissioner to have real teeth, especially with regard to late payment. Small Business Commissioner must have clout to tackle late payment, says FSB

John Allan of the FSB says:

“We are encouraged by the Government’s consultation process which will include businesses of all sizes. But it’s important to ensure that the new Commissioner has the confidence of the entire business community, a clear focus on tackling supply chain bullying, and sufficient powers to intervene and resolve late-payment disputes in a timely and effective way. The Commissioner will have a unique overview of patterns of bad practice in late payment culture and should have the ability to refer these to the Competition and Markets Authority if those practices are considered harmful to the working of the market.

“Recent FSB research found that only one in five (21%) of our members are confident the current Prompt Payment code will be enough to address the UK’s poor payment culture. In addition, the EU Late Payment Directive from March 2013 is simply being ignored by many large and multi-national companies to the detriment of small businesses and the sustainability of their supply chain.

“Late payment culture in a company is set at board level. It’s something that CEOs and board members in big businesses must take responsibility for and put at the top of their agendas. Big businesses must respect the supply chain and stop using smaller businesses as a credit line by delaying payments and applying bullying tactics.”

One Response

  1. problems vary by industry

    for instance stories of poor payment typically come from suppliers to big retail and the construction business

    both have one thing in common – massive size difference twixt buyer and seller

    certainly there are all sorts of fixes and penalties that can be applied – but my old (not necessarily very wise) head suspects that most good intentions can be dodged by the most determined bent buyer

    one possibility is to introduce factoring – compulsory to the buyer but optional to the seller

    this would at least guarantee a cash value at a certain time and allow the supplier to work out the real value of a supply contract

    it would have to be involved at the negotiation stage

    this would help those of us supplying the retail / wholesale distribution trades

    the problems of the construction trade are more intractable – the illusion that the price of ‘being one of the lads’ involves verbal ‘contracts’ continues to undermine safer practice at the base of the transaction pyramid

    the issue of ‘retentions’ still defies solution

    again other question of the involvement of another party with a financial interest is tempting

    view construction as separate

    this army of egos manages to perennially underquote throughout the contracting process and yet be rated as dismally inefficient when compared with similar businesses abroad

    something to do with sub-contracting?
    who knows?
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