Small business commissioner to clamp down on late payment culture

Enterprise Bill announcement will see commissioner signpost free mediation services to settle payment disputes

The government has announced the appointment of a small business commissioner, as part of its Enterprise Bill, to tackle the growing problem of late payments from clients to smaller firms.

With small businesses owed an estimated £26.8bn in late payments according to Bacs, the commissioner will direct companies whose clients have failed to pay them towards a single mediator to settle disputes.

New rules for late payments will also be extended to the insurance company, requiring them to pay out claims to businesses within a reasonable time frame.

The commissioner role is a new addition to the bill, which was originally announced by business secretary Sajid Javid in May, pledging to cut £10bn in red tape over the next five years. The government will begin advertising the position next Spring.

Additionally, the bill has laid out proposals to penalise companies who attempt to pass off inadequate training schemes as apprenticeships and will help small firms by implementing rules that ensure regulatory advice between local councils is homogenous – mitigating hassle for companies whose business transcends local boundaries.

The Enterprise Bill will also update the existing Industrial Development Act to support the roll out of telecoms and broadband across the country. Both houses must pass the bill before it comes into effect.

Anna Soubry, small business minister, commented: “My experience from talking to bigger businesses at the highest level is that when they discover what’s happening, they are as horrified as anyone else would be. They say, ‘That’s not right. That’s not the ethos of our business’ and they sort it out. That’s why the small business commissioner will be so valuable.”

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