An Enterprise Bill unveiled by the new Business Secretary is poised to strengthen the rights of small businesses that supply larger retailers.

  • Small Business Conciliation Service will boost supplier rights
  • Rights of small businesses that supply larger retailers will be bolstered
  • Conciliation Service is part of the Enterprise Bill that aims to cut £10bn of red tape

Small businesses that are struggling to settle disputes between larger customers over late payments will have increased power thanks to the creation of a Small Business Conciliation Service.

Full details of the service have yet to be revealed. However, the Department of Business Innovation and Skills said it will help small firms who are currently owed more than £32bn in late payments. Many small firms are not aware of their rights or are reluctant to launch legal challenges, according to the government.

The service is part of a wider government endeavour to cut red tape for business by at least £10bn over the next five years.

New measures to support entrepreneurs and job creation will be set out today by the new Business Secretary Sajid Javid. The Bill will be announced as part of next week’s Queen’s Speech, during the state opening of Parliament.

“As part of our long-term economic plan, we will sweep away burdensome red tape, get heavy handed regulators off firms’ backs and create a Small Business Conciliation Service to help resolve disputes,” said Javid.

Tesco has been one retailer pulled into the limelight over the way it allegedly treats suppliers. In February, the grocer demanded suppliers cut their prices to reflect falling costs of commodities or else face their products being removed from shelves. As a result, the grocer is being investigated by the Groceries Code Adjudicator, Christine Tacon. Meanwhile, B&Q has faced scrutiny for demanding suppliers pay into an  ‘investment-for-growth’ programme in order to stay on its books.