In it, he promises:
- red tape to be cut by at least £10 billion and for the first time target independent regulators
- EU Commission also set to unveil plans to cut EU red tape
- new Small Business Conciliation Service to help settle disputes over payment.
As part of its long-term economic plan, the Government will cut red tape for business by at least £10 billion over the next five years in a new Enterprise Bill that will back business to create jobs.
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He said: "Small businesses are Britain’s engine room and the success of our whole economy is built on the hard work and determination of the people who run and work for them. As Business Secretary I will always back them and, in my determination to get the job done, one of my first steps will be to bring forward an Enterprise Bill that helps them to succeed and create jobs.
"As part of our long-term economic plan, we will sweep away burdensome red tape, get heavy-handed regulators off firms’ backs and create a Small Business Conciliation Service to help resolve disputes."
The newly-appointed Business Minister Anna Soubry claimed it would be a 'no nonsense Bill to back small businesses and help create jobs, giving financial security and economic peace of mind to hardworking people across the country'.
She said: "We will be asking businesses for evidence in the coming weeks and months. We want them to be our partners in identifying and scrapping needless burdens at home and in Europe. It’s important Government gets behind small businesses – enabling them to get finance, get paid on time and get rid of red tape."
Enterprise BIll
In a change, the Government’s ambitious target for cutting red tape will look beyond Whitehall and extend to independent regulators for the first time. They will be expected to contribute to a target of at least £10 billion.
Another central measure in the Enterprise Bill will be the creation of a Small Business Conciliation Service to help settle disputes between small and large businesses, especially over late payment practices. Small firms are owed over £32 billion in late payments, but many of them are not aware of their rights or are reluctant to launch legal challenges. This service will build on the existing suite of measures to tackle poor payment practices.
The Bill will also support businesses through the extension and simplification of Primary Authority. This scheme allows a business to get advice on regulation from a single local council and this advice must then be respected by all other councils - reducing the time and cost to businesses of having to obey different rules.
The European Commission is also announcing proposals to cut red tape in Europe. Measures being pushed for include a commitment to propose lighter regimes for small businesses in new EU legislation, greater independence for the Commission’s Regulatory Scrutiny Board, and improved consultation and impact assessments.
Welcome
The new measures were generally well accepted by the small business community.
Beatrice Bartlay, owner of specialist staffing agency 2B Interface, said: “Late payment is one of the biggest issues confronting small businesses today. Small businesses are fragile and rely immensely on their cash flow to support operations and growth. If a business does not pay their supplier on time, it has a critical impact on that enterprise, which essentially ends up acting as a paymaster and banker, chasing for any payments owed to them.
“The news that the Government will be introducing a small business conciliation service, along with the new Bill, is a monumental move in the right direction. It will give small businesses the much-needed backing when struggling with the payment process and will help mitigate the risk of small businesses losing that much needed financial support,” she said.
“Over the past few years, the lack of legislative support to ensure organisations pay on time has meant that small businesses have been threatened with the prospect of losing money and struggling to deal with late payments. To Britain’s small businesses, a bill paid can mean the difference between staying above water, or sinking, and I am confident that the Enterprise Bill will give SMEs that much needed support to truly make Britain’s ‘engine room’ of SMEs thrive and grow.”
Sceptical
However, others were more sceptical about the wider impact of the creation of the Small Business Conciliation Service. Lovetts the commercial debt recovery legal firm welcomed the move but fears the service will help only a small proportion of firms struggling with late payment of their invoices.
Lovetts CEO, Charles Wilson said: “Just one per cent of the debts coming to us for legal intervention are disputed so while this measure is a step in the right direction, it is not really addressing the problem.
“Javid needs to focus his efforts on persuading late paying businesses that it is in their economic interests to pay on time. Late payers rely on the reluctance of their suppliers to take firm action against them – Javid has acknowledged this.
"The Government needs to help small businesses to use the tools and late payment law already available to them to claim late payment compensation and interest.
"Under the Late Payment law, they can make claims for debts going back six years. In addition, more realistic recoverable legal costs would further discourage late payers from risking court claims, and encourage the new culture that business so badly needs.
“Both these measures will send a strong message to habitual late payers that it doesn’t pay to delay. If more big businesses were aware of the legal claim their suppliers have to interest, costs and compensation I believe there would be a major change in late payment practices in the UK.”
A promising step
Freelancer and self-employed body, IPSE, welcomed the announcement that a Small Business Conciliation Service will be created and said that it reflected their own calls for a service where microbusiness owners can resolve disputes without the need for lengthy court action.
Chris Bryce, Chief Executive of IPSE, said: "Late payment is a crippling issue for the self-employed who need to be paid on time to keep their business afloat. The Small Business Conciliation Service was a central part of our recent manifesto to help bring an end to the scourge of late pay without the need for lengthy and costly court action.
"A newly established Conciliation Service could play a key role in making sure the smallest businesses have somewhere to turn when they are being paid late and could help deliver a better payment culture where small and large businesses work more harmoniously together. We look forward to working with the Government to make the Conciliation Service a success and help small business owners get a fair deal.
"The self-employed and small businesses want a regulatory environment that encourages them to succeed and the upcoming Enterprise Bill could play an important role in this regard. The self-employed have been very clear in what they want this Government to achieve and this announcement is a very promising first step."
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Susie Hughes © Shout99 2015
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