The government estimates that SMEs are owed £26bn in late payments, and they are spending on average £10.8bn a year in an attempt to recover overdue payments.
Under the government plans, the commissioner would act as the first point of contact for small businesses that are having issues with late payments. The commissioner would provide support and advice on how best to avoid or resolve disputes.
He or she would also provide access to mediation services that will help resolve the disputes quickly and at a reasonable cost – “at a fraction of going to court”.
The commissioner would also have an investigatory role – he or she would look into complaints over unfair practices and file regular reports.
The minister for small business, Anna Soubry, said that the new position would redress the “imbalance” in power between small and large businesses.
The issue of late payments can be very damaging to smaller businesses, especially when so many have experiences it. Over 80 per cent of small businesses that had experiences with late payments have said they only received the payments a month or more after the agreed deadline.