Chancellor Philip Hammond has pledged to look at ways to combat the late payment culture impacting SMEs as part of his Spring Statement.
In a speech to the House of Commons yesterday (13 March), the chancellor claimed that the UK economy can now see “light at the end of the tunnel” following a decade of turmoil resulting from the financial crisis in 2008.
He told MPs that growth was forecast to be 1.5% this year, higher than the 1.4% forecast by the Office for Budget Responsibility last year. Hammond also alluded to the possibility of an increase in public spending after the UK leaves the European Union in March 2019.
While no substantial policy was announced in the short speech, Hammond touched on a number of issues relevant to printers, including the opening of a consultation on the possibility of the least productive UK businesses receiving advice and guidance from the most productive to aid improved performance.
At the forefront for print SMEs is concern about late payment culture. The Federation of Small Businesses (FSB) found last year that 5.7 millions SMEs are affected by the issue, with an estimated £18bn held up in poor or late payments. Hammond said the government would open consultation on how best to combat the problem.
“Getting paid on time is the lifeblood of print SMEs,” said Nationwide Print managing director Julian Hocking. “Big blue-chip businesses are especially difficult to deal with because they have the buying power to abuse this.
“There is no benefit in the long term as people will stop doing business with you if you continue to pay late. Businesses should be punished for doing so and the government needs to put laws in place to protect small businesses.
“I take these statements with a pinch of salt, though, as you do not know what will really happen until you read the fine print.”
Hammond took time to announce that £80m will be released to help small businesses recruit apprentices, though the Treasury has stated that this is “not new funding” and was already designated to fund apprenticeships alongside the apprenticeship levy on larger businesses.
BPIF chief executive Charles Jarrold said: “Overall, I think the government wants to encourage more uptake in training and that needs to be properly funded. The big question is how much money will be available for this and other issues in the Autumn Budget.
“I am not sure we can really see the light at the end of the tunnel just yet. The EU economy is thriving which I think is pulling up our performance, but the great uncertainty remains Brexit – hopefully we will know where we stand by the time of the budget.
“Our industry must get involved in consultation if the government is opening that up, it is extremely important. We are always interested in hearing our members views and I would encourage everyone by saying that the government does listen to informed consultation.”
Single-use plastic was another target in Hammond’s speech, with the proposal of a tax to deter its usage. This issue is also intended to go to consultation.
Andrew Mansfield, technical sales director for CS Labels – which is making moves into flexible packaging – urged caution, saying that taxation is not the solution needed.
“You can put a tax on plastics but the concern is if that has an effect on whether consumers dispose of single-use products properly,” he said. “A tax will simply mean packaging companies are held responsible for consumer behaviour.
“In the Netherlands, they have introduced a scheme where price is scaled up on plastic drinks bottles and the extra money is refunded to the consumer when they recycle items through deposit methods funded by private enterprises such as the drinks companies.
“Our government needs to engage with those companies in the UK, and the producers of plastic packaging, to find solutions like this which make the plastic industry more sustainable for everyone instead of punishing one segment of the industry.”
Other points highlighted by Hammond included whether the 1p and 2p coins or the £50 note remained viable in an increasingly digital payment-based economy, as well as suggesting a new “tech tax” for firms such as Google and Facebook.
Shadow chancellor John McDonnell responded to Hammond’s speech by berating his “astounding complacency” to what he described as a public sector funding crisis.