VINCE Cable is considering fining companies who do not settle invoices on time, it was reported last night.
Under the plan, being considered as part of an autumn push on “responsible capitalism”, a firm that does not pay its suppliers on time could face legal action.
A spokesman for the Department of Business, Innovation and Skills confirmed a report in the Financial Times that Cable would ideally like to ensure invoices are settled within 30 days, although 60 days is considered a more realistic target.
However, it remains unclear how the rules would be enforced. Business groups point out that many suppliers would be reluctant to report their customers for slow payment in case they lose future orders.
Last year the government launched the voluntary Prompt Payment Code, a set of guidelines that aims to codify best practice. Just 1,453 firms have signed up so far, although most FTSE 100 groups are on board.