The Small Business Protections Bill, which will deliver legislation aimed at tackling the issue of late payment of invoices suffered by small firms, is being introduced to the House of Lords today.
First announced in March and confirmed in the King’s Speech, the Bill includes stronger powers for the Small Business Commissioner to investigate, adjudicate
There will also be a 60-day cap on payment terms for large firms, mandatory interest on late payments, and action to ban the practice of retentions in construction.
Late payment of invoices causes the closure of 38 businesses every day and costs the economy an estimated £11 billion a year.
Prime minister Keir Starmer said:
“Small businesses are the backbone of our economy – run by people who take risks, create jobs and keep communities going. This government is firmly on their side.
“Too many small business owners are spending hours chasing money they are owed and when payments don’t come through, the cost is personal. It’s about whether you can pay your staff, keep the lights on, or invest in your future.
“Today we’re changing that with the toughest action on late payments in a generation, so small businesses get paid on time and get the backing they need to grow, create jobs and serve their communities.”
Small business minister Blair McDougall said:
“I’ve spoken to too many business owners who do everything right and are still left lying awake at night wondering how they’ll pay their staff or cover their bills because they haven’t been paid what they’re owed.
“Introducing this Bill is about standing up for those people, to restore fairness, dignity and security for small business owners and the self-employed, so they can focus on doing what they do best: growing their businesses and the economy.”