The budget was followed last week by the Royal Assent for the Small Business, Enterprise and Employment (SBEE) Act. However, whether big companies take any real notice of paying SMEs on 30 day terms remains to be seen. The Act is silent on real detail.
John Allan, national chairman of the Federation of Small Businesses commented that “unfortunately poor payment culture is firmly embedded in the UK and unless we see a marked improvement soon, the FSB is calling for an independent inquiry into addressing the poor payment culture.”
Being promised by the government is an increasing transparency on payment practices and policies through a tough new reporting requirement on the UK’s largest companies. This will demand increased transparency to help address the current economic imbalance in power between small and large companies. And it will provide small firms with the information they need to negotiate fairer deals, shining a light on poor practice.
Matthew Hancock, Business Minister, said: “The first-ever Small Business Bill takes radical action on prompt payment to end the late payment culture. Explaining the Act in more detail he went on to say:
“It contains measures across the board to make it easier to start and grow a business. As someone who understands how it works, having been part of a small business myself, to be able to make the changes available today is one of the reasons I went into politics. The Government has backed small businesses like never before to build a Britain where entrepreneurs can break the mould and take on the world. I know first-hand how cumbersome bureaucracy can stifle your ambitions to grow. The Small Business Act is the first set of laws specifically to help level the playing field for small business. There really has never been a better time to start and grow a business in the UK.”