New measures designed to tackle late payment by big businesses to their suppliers will only work if the Government enforces it.

That is the view of Graham Lamont, chief executive of Lamont Pridmore, after Chancellor Philip Hammond announced what he described as a “first step” in tackling a long-running issue facing many small and medium sized business.

In his Spring Statement this week, Mr Hammond said Audit Committees at large companies across the UK will now be required to review their payment practices and report on them in their annual accounts.

He told MPs that business secretary Greg Clark would announce further details in the near future.

And while the move was welcomed by Mr Lamont, he also raised concerns over its policing and the potential reaction the new measures could spark from big businesses.

“The measures will be positive – if they work,” he told in-Cumbria.

“While it will be quite good in terms of shaming the big corporations into paying quicker, whether it works in practice will depend on how hard the Government pushes. It will be difficult.

“And there could be a danger that the big companies look to cut the number of suppliers they have to pay and look to place bigger contracts with fewer suppliers. That’s what small businesses could be faced with.”

The measures were also welcomed by Rob Johnston, chief executive of Cumbria Chamber of Commerce, who said they would reduce the likelihood of companies exploiting their suppliers by delaying payments to them.

In a Spring Statement overshadowed by Brexit, and from a Cumbria perspective, dominated by the Government award of £260 million to The Borderlands initiative – adding to the £85m pledged hours earlier by the Scottish government – there were few major announcements from the Chancellor.

Mr Hammond dedicated the majority of his address to MPs to stress the positive economic outlook for the UK – as long as a Brexit deal was reached.

Describing the UK economy as “remarkably robust”, he revealed growth forecasts for the next five years topping 1.6 per cent and a continued fall in public borrowing. Employment and wage growth are also at record levels, he added.

But Jim Meakin, partner and head of tax at accountancy firm Armstrong Watson, warned: “It is clear that whatever relatively good economic news there is, it is subject to both the realities and the uncertainty factor of just what solution we end up with to the Brexit question. 

“Achieving certainty and stability is an essential aspiration for our country and for businesses which are striving to make the best of the opportunities which do exist.”