An overwhelming majority of MPs have backed reform plans to tackle the industry-wide problem of late payments by issuing fines to companies who continue to flout rules.
A new survey shows that almost three quarters (73%) of MPs agree with changes recommended by the Association of Accounting Technicians (AAT) to the voluntary Prompt Payment Code.
The changes include making the code compulsory for companies employing more than 250 employees, maximum payment terms halved from 60 to 30 days and small businesses to be supported by a clear, simple financial penalty regime for persistent late payers, enforced by the small business commissioner.
The YouGov poll found that a further 16% of MPs neither agreed or disagreed, 11% didn’t know, while no MP disagreed with the proposals.
Phil Hall, AAT head of Public Affairs & Public Policy, believes that with such high cross-party MP support, it would be difficult for the government to not pay attention and not back the recommendations.
“Late payments lead to thousands of insolvencies every year, damage productivity, restrict investment and can also impact on the mental health of small business owners and their employees. Government action to tackle this problem, from the voluntary payment code to compulsory but feeble reporting requirements – as well as the creation of a small business commissioner with no real power – have all predictably failed to stem the scourge of late payments. We trust that the small business minister will bear these facts in mind when she considers what to do next.”
The latest research shows that support within Westminster for tackling the continuing scourge of late payments is growing. It follows a separate survey undertaken in April 2018 which revealed over 100 MPs were in favour of ring-fencing of retention monies.
In the wake of the Carillion collapse at the start of 2018, a coalition of over 75 bodies (representing over 340,000 businesses) united behind Peter Aldous’ retentions reform efforts, proposing that cash retentions owed to the supply chain are held in trust.