To ask the Secretary of State for Business, Innovation and Skills, what steps his Department has taken to enforce prompt payments to small and medium-sized enterprises by large companies.
The Government is taking forward a suite of measures to tackle prompt payment.
Through the Small Business, Enterprise and Employment Bill, currently before Parliament, we will introduce measures to improve transparency on payment practices and policies. Increased transparency, through a tough and transparent new reporting requirement on the UK’s largest companies, will help take significant steps to addressing the current imbalance in economic power between small and large contracting parties. Our consultation on draft secondary regulations to underpin these measures closed on 2 February. We will publish a summary of responses shortly.
The Government is currently seeking views on how to best give representative bodies wider powers to be able to challenge grossly unfair payment practices on behalf of members. The discussion paper is available online and is open until 9 March.
The Government is also working to strengthen the impact of the Prompt Payment Code. We are currently considering proposals, including introducing a maximum payment term for Code signatories, more rigorous monitoring of signatory behaviour, and the enforcement of tougher sanctions on bad payers. We will announce our proposals in Spring.
These measures will drive forward a shift in payment culture that will make it unacceptable for large companies in positions of extreme bargaining imbalances to exploit smaller suppliers.