The power wielded by large companies over smaller businesses is always going to be an issue. Smaller businesses will not want to rock the boat, or risk losing the work (even where they are paid extremely late).
Having the ability for the CBI and other business groups to challenge late payments on behalf of their members, only works where the members want challenges to be made.
How the "new rules", which will permit High Court injunctions to be raised, will work remains to be seen. However, as always the devil will be in the detail.
Will this step help change the tide of slow/later payers? Maybe; although it will take some time before the rules are introduced and being used before an assessment as to their effectiveness can be carried out.
In the meantime, it is up to small businesses to take a positive stance on payment. If you have to wait in excess of 120+ days before being paid, after you have bought materials, paid staff and completed the work, you need to ask yourself whether the long wait is worth that customer's business. At the end of the day, who wants to work for free?
The CBI and other business groups will have the power to challenge late payments on behalf of their members under legislation to be introduced tomorrow in the wake of the Carillion scandal. The new rules will allow trade bodies to seek High Court injunctions if contractors are paid late by state departments or private companies. That will mean businesses do not have to pursue individual actions. The collapse of Carillion last month has put thousands of small businesses at risk and highlighted the issue of late payment. The construction giant was notorious for this, with some small companies said to have waited more than 120 days. The government estimates that the economy would get a £2.5bn boost if contractors were paid on time. The new regulations will come into force at the end of the month.