Red tape and late payments targeted in new bills – Daily Business

The King’s Speech delivered a new legislative programme

Speeding up competition issues and easing other regulatory burdens feature in the new legislative programme announced in the King’s Speech.

Bills to boost growth in the financial services sector, tackle late payments and build closer ties to the EU have been welcomed as measures that will boost growth and reduce the cost pressures on businesses.

The government has confirmed it will update the ring-fencing regime that separates retail banking activities from investment. Banks have branded the 15-year-old legislation “redundant”.

There is emergency legislation to nationalise British Steel, which is based in Scunthorpe, employs 2,700 people and owns the UK’s last remaining blast furnaces. 

However, there was disappointment at no mention of long-promised business rates reform and concern from the oil & gas community that the government will not allow new licences in the North Sea.

A new Financial Services Bill intends to make the UK more globally competitive by consolidating the regulatory framework, which includes merging the Payment Systems Regulator into the Financial Conduct Authority to reduce fragmentation.

Gail Boag, CEO of the Institute of Chartered Accountants of Scotland (ICAS), said: “The UK’s regulatory system needs to be modernised to ensure it is clear, trusted and predictable, and backed by regulators that command confidence.

“Getting this reform right is essential to maintain the UK’s position as a global financial centre and support long‑term, sustainable economic growth.”

Ms Boag noted that while the UK government must pursue growth, regulation should not be viewed as its enemy, as purposeful design provides the investor confidence that drives the economy.

Gail Boag: regulation should not be seen as an enemy

“Good regulation is there to protect the consumer, and also investors, and we should be wary of reform at the cost of accountability and clarity,” she added.

To further support local finance, the Bill updates the ring-fencing regime and improves membership rules for credit unions, aiming to double the size of the mutual and co-operative sector.

The Small Business Protections (Late Payments) Bill will introduce the strongest legal framework in the G7 to address a crisis that costs the UK economy £11 billion annually.

Late payments currently lead to 38 business closures every day, a figure that totals 14,000 firms a year. The new laws will impose a maximum payment term of 60 days and mandate interest at 8% above the Bank of England base rate for late settlements.

The Small Business Commissioner will also receive new powers to investigate and fine persistent offenders.

Colin Borland, Scotland director of the FSB, welcomed the crackdown on big businesses using small suppliers as a “free overdraft”, noting that 62% of Scottish small firms have experienced late payments in the last three months.

Susan Love, ACCA Scotland’s engagement lead, added: “After highlighting the pernicious problems of late payment for many years, we’re particularly pleased to see proposals for reform moving forward. We hope reform will make a real difference to SME cashflow, better positioning firms to grow and invest.”

Shevaun Haviland, director general of the British Chambers of Commerce, said:   “Today’s King’s Speech had some positives for business with action to tackle late payments, simplify trade with the EU and strengthen apprenticeships. 

“These steps can make a real difference to cashflow and confidence on the ground. 

“But there are also significant gaps where the Government has not gone far enough. Businesses will be disappointed to see no clear progress on reforming business rates, which remain a major cost burden for firms across the UK.”

Rain Newton-Smith, CBI chief executive, said: “As the country continues to feel the effects of strong global headwinds, businesses were looking for the King’s Speech to put stability, resilience and growth firmly at the heart of the government’s legislative agenda.

“Moves to strengthen energy security, bolster transport connections and streamline financial services regulation are welcome, as are concrete measures to deepen ties with Europe.”

However, she added: “Firms want to go for growth, but they need strong leadership from government to reform an unfair business rates system, lower business energy bills, and find appropriate landing zones on the Employment Rights Act.”

Rain Newton-Smith: strong leadership required (pic: DB Media Services)

Richard Stone, chief executive of the Association of Investment Companies, said: “It’s disappointing that the government has missed an opportunity to push forward with the reforms it has promised to enfranchise retail investors.

“Unfortunately, we are still in a situation where platforms and other nominees can choose whether to pass on company information and voting rights to underlying retail shareholders.

‘The resulting dislocation between companies and their shareholders hands disproportionate power to motivated minority shareholders like Saba Capital.

“We will continue to press the government to fulfil its promise to enact the Bill of Shareholder Rights proposed by the Digitisation Taskforce.”

SNP Westminster leader Dave Doogan, said: “This was a typically and massively underwhelming policy agenda from a dismal Prime Minister who promised change but has only delivered chaos.

“It does nothing to help families with the cost of living, which has soared under the Labour Party, and it shows why Scotland urgently needs a fresh start with independence – because real change will never come from Westminster.”

Scottish Conservative leader Russell Findlay said: “Labour’s crazy decision to double down to block new drilling is a kick in the teeth for Scotland’s proud oil and gas workers.

“Driven by completely unrealistic net zero targets, they are happy to kill off the industry no matter how many jobs are lost or how much it will force up people’s energy bills.

“But the SNP are just as culpable because they still oppose new drilling no matter how hard slippery John Swinney tries to dupe people.

“The Scottish Conservatives will continue to stand up for our oil and gas workers and fight to save this world-leading sector.”

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