Government late payments crackdown – a welcome move, says RHA

This week the Government announced its "Time to Pay Up" plan, a crackdown on late payments that impacts businesses throughout the supply chain, including many of our members and businesses in our industry. We welcome this development, as late payments significantly impact businesses. Running a business is becoming more expensive month on month.

Higher operating costs and lower volumes are regular features for many operators. With average profit margins of just two percent, we need policymakers working collaboratively with us to minimise financial burdens on companies. To achieve long-term growth, Government must partner with industries like ours that are crucial to the economic health of the country.

Late payments in particular cost the UK economy GBP11bn annually and shut down over 38 firms every day (according to the FSB). They're one of the biggest barriers to business growth. We've continually argued that these antiquated payment terms pressure businesses who must pay for fuel, maintenance, and wages upfront.

These new reforms, particularly the legal cap on payment terms and increased oversight, directly address those concerns, and this is to be welcomed. Companies across our sector are run by working people. Many are smaller, medium-sized firms, often family-owned and economic anchors in their communities.

These businesses cannot afford additional costs. If implemented and enforced effectively through continued dialogue with industry, these plans could go some way to significantly improving financial resilience. As the Autumn Budget approaches, businesses want clarity and certainty through ongoing engagement.

Investment is the lifeblood of the economy. To encourage business investment, firms need conditions that allow them to thrive, conditions best developed through partnership between government and industry. This work continues and we'll be engaging with Ministers in the weeks and months ahead.

Ensuring businesses are paid on time and creating conditions where everyone has a chance to succeed are crucial priorities for companies, communities and the economy.

There's much work to do, but this is a good start from Government, and an important stepping stone in the process of kickstarting economic growth through collaborative policymaking.