I would say that the measures in the Bill are not enough. There is a power imbalance between the large companies and the small companies, and late payment needs to be seen as being as unacceptable as tax evasion.
The Government’s proposals to remedy the situation are disappointing. They have taken up a number of recommendations from my inquiry, but those have been very watered down. For example, clause 1 fails to describe how the prompt payment code will be updated. As we have heard, the code is already being abused by a number of prominent large companies, so, without that detail, it is legless. Similarly, the Government have reneged on their promise made last December to introduce 30-day payment terms throughout the public procurement supply chain. Instead, clause 3 states that regulations “may” be introduced to require large companies regularly to publish information about their payment practices. That is very disappointing indeed.
Another example is the Government’s failure to reform the pre-qualification procedures for public sector contracts, which have been estimated to cost the construction industry alone more than £1 billion annually. One of my recommendations on the pre-qualification questionnaire was that there should be regular updates on the past payment performance of such companies, but such a provision has been omitted. Article 7 of the EU directive on late payment, which protects small businesses and allows them to maintain their anonymity when challenging grossly unfair practices, has still not been implemented. The mystery shopper scheme in clause 34, which allows small businesses to complain about poor practices, including late payments, does nothing to address the climate of fear in reporting these events. This is not good enough; it really does not go far enough. The fundamental point I made earlier about the bullying culture and the power imbalance has not been addressed at all in the Bill.