Business secretary announces proposals to give trade associations power to intervene on behalf of members
Business secretary Sajid Javid has announced proposals to give trade associations power to intervene on behalf of their members to challenge unfair payment terms.
As well as 鈥渨idening the powers for representative bodies鈥�, Javid said in his first speech as business secretary that he would legislate to set up a Small Business Conciliation Service designed to settle payment disputes.
The service鈥檚 purpose will be to enable the firms to avoid expensive legal costs and maintain business relationships, while settling payment disputes with large corporations.
According to the Department for Business, Innovation and Skills, small firms are owed over 拢32bn in late payments, but many of them are not aware of their rights or are reluctant to launch legal challenges.
Creating the new service will form part of the Enterprise Bill, which will be included in the Queen鈥檚 speech this month.
Brian Berry, chief executive of the Federation of Master Builders, welcomed the moves, saying the organisation 鈥渆agerly鈥� awaited further details of new powers for trade associations.
He added: 鈥淚t is often difficult for small firms to highlight poor payment terms directly without biting off the hand that feeds. This is partly why the problem has raged on for so many years.鈥�
Rudi Klein, chief executive of the Specialist Engineering Contractors Group, commented that this was 鈥渁nother measure in the right direction鈥�, but added that its success will depend on small businesses being willing to take it up.
He added that since 2008 there have been about 20 measures from governments to tackle unfair payment terms, and yet inroads had not been made. He said: 鈥淲e have to be mindful of the fact that we need to do a lot more to get rid of this embedded attitude and bad practice on payments.鈥�
No comments yet