What the King's Speech means for small businesses

The political churn of recent weeks has cost small businesses time, focus and confidence. Today's King's Speech puts the agenda back where it should be, for now at least.

Five Bills in this session will directly impact small businesses: late payments, lending, regulation, trade with Europe, and how you prove who you are to the government.

Here is what each Bill means.

A serious attempt to fix late payments

DBT research puts the cost of late payments at £11 billion a year. Thirty-eight small firms close every day as a result. The average business spends 86 hours a year chasing unpaid invoices.

The Small Business Protections (Late Payments) Bill is the most significant intervention in this space for over 25 years. Its core measures:

• A maximum 60-day payment term, with strictly limited exemptions

• Mandatory interest at 8% above the Bank of England base rate

• New powers for the Small Business Commissioner to investigate, adjudicate and fine persistent late payers

• A ban on cash retentions in construction contracts

If a large customer drags out payment, the new rules give you faster recourse and harder consequences for them. The construction retentions ban matters most to subcontractors who have long carried other firms' cash flow risk.

Whether this Bill works rests on how tight those exemptions are and how aggressively the Commissioner uses its new teeth.

Easier access to finance

The Enhancing Financial Services Bill commits explicitly to improving competition in SME lending. It also reforms the ring-fencing regime that separates retail from investment banking, to unlock more finance for UK businesses.

The Bill widens credit union membership rules too, which could open up affordable finance for communities currently underserved by mainstream lenders.

Lending reform lives or dies on whether new entrants scale and whether incumbent banks change how they underwrite. Founders should hold judgement until the practice catches up with the policy.

Faster, smarter regulation

The Regulating for Growth Bill creates cross-economy "sandbox" powers. Regulators will be able to temporarily relax existing rules so businesses can test new products and services in real-world conditions.

It also strengthens the Growth Duty for major regulators, including Natural England, the Environment Agency and the Health and Safety Executive. Ministers will gain new powers to set strategic direction in each sector.

The change is less immediate than tighter payment terms but potentially more consequential. If regulators use these powers to back UK innovation, the effect will be felt over years rather than months.

Closer ties with Europe

The European Partnership Bill provides the framework for the UK-EU agreements on food and drink, emissions trading and electricity. The government estimates the combined deals are worth up to £9 billion a year to the UK economy.

For exporters, the practical gains include removing Export Health Certificates that cost up to £200 per consignment for agri-food goods, and cutting border friction at the UK-EU boundary.

The detailed legal texts are still being negotiated, so the precise benefits will take time to land.

A national digital ID

The Digital Access to Services Bill establishes the legal framework for a free, optional digital ID, accessed via the GOV.UK app. Existing identity routes stay open for those who prefer them.

The immediate benefit is less time spent proving the same information to different parts of government. The system shares only what each interaction requires, rather than exposing your full identity each time.

The bigger prize is what this unlocks: faster business banking, automated invoicing, and quicker access to credit. How the system handles verified business identity, alongside personal identity, will decide how much value founders actually see.

Enterprise Nation's head of policy, Daniel Woolf, said:

"Today's King's Speech signals a return to the practical issues facing entrepreneurs and local economies.

"New late payment laws will start to fix an £11 billion drain that closes 38 small firms every day, with 60-day payment terms, mandatory interest and stronger powers for the Small Business Commissioner.

"Reforms to open up SME lending, support innovation through regulatory sandboxes, strengthen trading ties with the European Union and roll out a national digital ID all address problems our 170,000 members live with daily. 

"Whether these Bills deliver will depend on the detail."

The devil will be in the details

The legislative direction in this King's Speech is good news for small businesses. The Bills targeting late payments, lending, regulation, EU trade and digital ID address real problems our members tell us about every day.

But announcement is not delivery. The 60-day payment term will only matter if the exemptions are tight. The lending reforms will only matter if competition genuinely shifts. The sandbox powers will only matter if regulators use them.

Enterprise Nation will work with the government across this Parliament to bring our over 170,000 members into the design of these laws, so the final legislation reflects what running a small business actually looks like.

People also read

• Full list of Bills in King's Speech 2026

• Late payments crackdown: The biggest reforms in a generation

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