From the top · 4 October 2018

Will new small business minister Kelly Tolhurst finally end the late payment crisis?

New small business minister Kelly Tolhurst announced the government’s proposals
Latest government late payment crackdown: More white noise or the real deal? Why new small business minister Kelly Tolhurst means business.

As conference season for Britain’s two main political parties closes, small business owners found themselves side-lined ahead of party leadership debates and national issues such as the housing crisis. On the penultimate day of conference, however, business secretary Greg Clark threw SMEs a lifeline.

At the Conservative Party conference this week, on-stage dance moves distracted from the key issues of business rates and late payments for small business owners. One thing was clear, however the government’s post-Brexit immigration policy could spark a serious labour shortage. Both the Confederation of British Industries (CBI) and the British Retail Consortium (BRC) immediately warned that an end to unskilled migration? would limit access to workers and hurt businesses across all industries.

However, there were signs of small business issues being discussed. At a fringe event in Birmingham, Clark hinted at reform to the business rates system, in recognition of the role of high street retailers in Britain’s towns and communities, before he announced a fresh attempt at tackling late payments. Meanwhile, chancellor Philip Hammond said the UK could go it alone? and introduce a digital tax to level the playing field between online and offline retailers.

Following the party’s conference, substance has been added to the late payments debate. The Department for Business, Energy and Industrial Strategy (BEIS) announced new proposals designed to pull small companies out of the damaging cycle of late payments and unpaid invoices.

Late payments facts

? 2.5bn lost to economy annually
? Causes 50, 000 businesses to fold each year
? End to late payments could create 3.4m jobs

The government’s proposals include measures to allow trade bodies to highlight the worst offenders in payment behaviour, encouraging firms to open positions specifically for prompt payment practices and helping small business owners access up-to-date accounting technology to manage payments effectively.

late payments still blight SMEs because the Conservatives refuse to address the imbalance between large companies and small businesses. Today’s astonishingly weak policy announcement won’t change that one bit.”
? Rebecca Long-Bailey, shadow business secretary

Fresh targets have also been set within the public sector, where previous research revealed that nine in ten government suppliers had been affected by late payments. The government has committed all departments to paying 90% of disputed invoices from SMEs within five days.

Respond to the government’s call for evidence.

The policy proposals were announced by new small business minister Kelly Tolhurst, who replaced former minister Andrew Griffiths following a sexting scandal.

over the past 5 years the amount owed to businesses in late payments has halved, but we will go further to make sure all of our small businesses are treated fairly, Tolhurst said.

today’s new call for evidence will help us identify the most effective way possible to tackle this issue once and for all and ensure small businesses are on a level playing field with their larger counterparts.

The new proposals follow numerous efforts to tackle the late payment problem in recent years. The voluntary Prompt Payment Code was introduced in 2015 and asked businesses to publish payment records, before tougher measuresefforts to increase supply chain transparency were introduced in January 2017. A formal complaints procedure also opened at the end of last year.

late payments


Named and shamed: 35 worst offending late payers and the crippling impact on small businesses

Here we round up the 35 worst offending businesses for late payments and what to do if you’re owed payment from a key customer.




Praseeda Nair is an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.

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