U.K., Oct. 28 -- UK Parliament issued the following news:
The Government has strengthened its commitments to Britain's small businesses following sustained scrutiny by the Business, Innovation, Science and Trade Committee – but major questions remain over business rates, energy bills, tax and late payments ahead of the forthcoming Budget.
Read the response
In its latest response to the Committee's Small Business Strategy report , the Government has advanced a series of commitments going further than its original response in July .
These advances include stronger accountability for government departments failing to meet small business procurement targets, additional measures to tackle late payments, plans to strengthen powers against high-street crime, and fresh research into protections for franchisees.
The Committee welcomes the progress. But its assessment of the Government's response shows that significant recommendations remain unresolved, particularly on the costs that make it harder for small firms to survive, invest and grow.
The main areas of progress include:
Government contracts: Ministers will personally sign off annual reports on departmental spending with small businesses. Departments falling behind their targets must update their action plans and publish progress - but the consequences for failing to meet targets remain unclear.
Late payments: The proposed Commercial Payments Bill will strengthen enforcement and introduce mandatory interest and penalties for late payment. But, the Government has declined to commit to the Committee's proposal for 30-day payment terms across the economy by the end of this Parliament, despite the cash-flow pressures that late payments impose on smaller suppliers.
High-street crime: The Government has proposed doubling the maximum duration of closure orders from six to twelve months, but only subject to consultation and parliamentary time, to help tackle premises associated with persistent criminal activity.
Energy costs: Ministers have provided further assurances that the British Industrial Competitiveness Scheme is not expected to increase electricity bills for other consumers and businesses - but there is still no economy wide strategy for helping small business. Many smaller businesses outside energy-intensive industries continue to face high and unpredictable energy bills without significant new support.
Employment protections and franchising: The Government has promised a consultation on employment status, including bogus self-employment, and commissioned research into the franchising sector, although it has not committed to the statutory protections sought by the Committee.
Reviewing the Response, Chair Liam Byrne said the forthcoming Budget must address the bigger questions that remain.Business rates continue to place pressure on high-street firms; the Government has declined to review restructuring VAT to support small business growth; and ministers have not accepted the Committee's proposed 25% reduction in the administrative costs of complying with the tax system.
Chair comment
Rt Hon Liam Byrne MP, Chair of the Business, Innovation, Science and Trade Committee, said:
"The Government deserves credit for listening. Its first response left too many of our recommendations unanswered. This second response shows welcome movement, with stronger accountability for government contracts, tougher action on late payments and high-street crime, and a willingness to examine protections for franchisees.
"But small businesses cannot pay their bills with promises. They need lower costs, faster payments and fairer rules, backed by enforcement that works.
"Too many firms are still struggling with business rates, expensive energy, complicated taxes and customers who simply don't pay on time. Those pressures drain the cash businesses need to hire workers, invest and grow.
"The Budget is the next big test. Ministers have begun to address the problems we've identified. Now they need to tackle the costs and barriers that are holding Britain's entrepreneurs and high streets back.
"Britain's small businesses aren't asking for special treatment. They're asking for a fair chance to succeed. That means clear rules, bills they can afford, contracts they can win and payment they can rely on.”
Further information
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Business Innovation, Science and Trade Committee
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