Charles Wilson, CEO of Lovetts plc, described the move as well-intentioned but believes that in practise it won’t actually work.
“I fear this is just another piece of politics without any real understanding of why measures such as these have failed previously,” he said.
“Time and resource would be better spent educating SMEs on the best ways to protect their cash flow and limit their exposure to late payment,” he added.
He also claims that there has actually been very little real change in the 15 years since Late Payment legislation was established in 1998.
Late payment has become a particular issue for many firms in the current climate and evidence shows that manufacturing and construction are some of the worst offenders.
Wilson is now calling for the Government to focus on educating businesses to get the basics right in terms of their business contracts and the clear ground rules they need to put in place with suppliers so they know from the outset that late payment is not an option