Government proposes new laws to help tackle late payment culture

The Government has announced a raft of new measures designed to “support workers, businesses and entrepreneurs”, including new laws which will help tackle late payments.

In a report published today, the Business Secretary Greg Clark said the new measures will “ensure” every part of the country benefits from the Government’s Industrial Strategy.

Among the proposals, the Government said it plans to “end the unfair treatment of small businesses by companies who abuse their position by paying late for products and services.”

The measure follows recent research which shows that more than eight in 10 small firms (85 per cent) within European supply chains report persistent late payments, while just half of all invoices sent during 2017 by micro-firms were paid on time or within three days of agreed payment terms.

The proposals, which will be fully revealed in a consultation later this week, will consider the “best way to ensure company boards put in place responsible payment practices throughout their supply chain”. This includes whether all company boards should give one of their non-executive directors specific responsibilities for the company’s prompt payment performance.

Other measures include:

  • Creating a duty for employers to consider whether a job can be done flexibly and make that clear when advertising.
  • Requiring employers with more than 250 staff to publish their parental leave and pay policies so job applicants can make informed decisions about whether they can combine the role with caring for their family.
  • Ensuring that tips paid to workers are given to them in full.
  • An extra £90 million in funding to enable employers to invest a quarter of their apprenticeship funds on people working for businesses in their supply chain.

Introducing the proposals, the report reads: “The announcements build on the Government’s record of delivering right across the Industrial Strategy – from record levels of investment in research and development and the biggest transformation of technical education and retraining in a decade, to the fastest growth in infrastructure in the G7.”