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Business Update

Last week I published a Call for Evidence seeking views on the extent and impact of late payment and measures to go further in tackling the issue. This follows the commitment made by the Chancellor of the Exchequer in his 2018 Spring Statement that the Department for Business, Energy and Industrial Strategy would lead on a Call for Evidence to ‘eliminate the continuing scourge of late payments’.

Since 2012, the overall level of late payment debt owed to SMEs has fallen substantially, to £14.2 billion last year, down from £30.3 billion five years ago according to BACS, the payment service provider. While the halving of late payment debt is welcome, I am determined to see this reduce still further.

Alongside this publication, I announced that the Government would take immediate action to tackle late payment, by introducing the following measures:

• A new, tough and transparent compliance regime to underpin the Prompt Payment Code. The Small Business Commissioner will join the Code’s Compliance Board to provide independence from industry and the Board will report on all cases of signatories being removed from the Code. Further reform to the Code will be considered through the call for evidence, including whether the Small Business Commissioner should have a greater role in its administration.

• The Call for Evidence will also consider the best way to ensure all companies have responsible payment practices in their supply chains, including whether all company boards should give one of their non-executive directors responsibilities for prompt payment.

The Call for Evidence will be open until 29 November and I encourage businesses of all sizes to respond; I want to understand the impacts, experiences and reasonings for particular payment practices and views on what more can be done to enhance the payments process.

I will be depositing copies of the Call for Evidence document in the Libraries of the House.