New laws have been unveiled to clamp down on late payment and unfair retention practices, a step the UK Government says will strengthen the financial resilience of British firms.

Announced as part of the King's Speech, in which Charles III outlined a wider plan for economic growth, the package includes the Small Business Protections (Late Payments) Bill aimed at tightening payment discipline across supply chains.

Fiona Hodgson, Chief Executive of SNIPEF, welcomed the commitment and said the sector has been waiting for substantive action: "SNIPEF welcomes the UK Government's commitment to tackling late payment and unfair retention practices within the construction supply chain.

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"For many plumbing and heating businesses, particularly SMEs, delayed payments and withheld retentions continue to place unnecessary pressure on cash flow, investment and apprenticeship recruitment."

Under the proposals, payment practices between businesses would be overhauled: large companies would be limited to a clear 60-day term when paying smaller suppliers; interest on late invoices would become compulsory at 8% above the Bank of England base rate; and withholding retention sums under construction contracts would be prohibited.

Fiona added: "The plumbing and heating industry, and the wider construction sector, have waited a long time for meaningful reform in this area, and stronger protections for smaller businesses are overdue.

"However, it is essential that any changes do not simply replace one burden with another. Reforms must be practical, proportionate and avoid creating costly or complex alternative arrangements that could disproportionately impact SMEs and specialist contractors.

"Improving payment certainty and fairness across the supply chain is critical, but the detail of implementation will determine whether these reforms genuinely support smaller businesses in practice."