This plan outlines its intention to tackle late payments, an issue that costs the UK economy £11bn a year and forces 38 businesses to shut down every day.

Richard Beresford, chief executive of the National Federation of Builders (NFB), said: “As the Government has rightly recognised, SMEs employ 60% of the country’s workforce and generate £2.8 trillion in turnover.

“In construction, they train eight in ten construction apprentices. Therefore, it is promising to see the Prime Minister acknowledge the devastating implications of late payments on SMEs and the construction sector.

“We cannot train enough skilled workers, drive business growth, retrofit our buildings, deliver infrastructure, and build 1.5 million homes in an environment where late payment and unfair terms are acceptable.” 

Key announcements from the plan include:

• New £4bn finance boost including 69,000 Start-Up Loans to inspire the next generation of entrepreneurs and small business owners.
• Plans to introduce the strictest laws on late payments in the G7.
• New laws are expected to give stronger powers to the Small Business Commissioner to empower them to wield fines, worth potentially millions of pounds, against the biggest firms who persistently choose to pay their suppliers late.
• The Small Business Commissioner will be given new powers to carry out spot checks and enforce a 30-day invoice verification period to speed up resolutions to disputes.
• The introduction of maximum payment terms of 60 days, reduced to 45 days, giving firms certainty that they’ll be paid on time.
• Audit committees, under the proposals, will also be legally required to scrutinise payment practices at board level, placing greater pressure on large firms to show they’re treating small suppliers fairly backed by mandatory interest charges for those who pay late.