Commercial Payments Bill [HL]

Baroness Alexander of Cleveden Excerpts

2nd reading
Tuesday 9th June 2026 Lords Chamber

[Baroness Alexander of Cleveden (Lab)]

My Lords, I begin with my register of interests. I chair the Joint Industry Board of the electrotechnical sector, which brings together employers and unions operating in the electrotechnical, engineering services and built environment sectors. Our employer members are a critical part of the construction supply chain, and many have felt the burden of late payments and retentions. I therefore begin by congratulating the Government on the Bill.

Noble Lords will be familiar with Ronald Reagan’s lampooning remark:

“I’m from the government and I’m here to help”,


and will know that new regulation often engenders business scepticism. However, when it comes to tackling late payments, there is broad consensus that it is past time to update the well-intentioned but, in practice, ineffective legislation put in place at the end of the last century by the previous Labour Government. SMEs have been calling for further government action for more than a decade. This Bill will now deal with outdated and ineffective legislation.

To echo my noble friend the Minister, a shocking quarter of all firms are impacted by late payments. The Bill will bring relief to 1.5 million small businesses every year. Shockingly, late payments currently lead to more than 14,000 businesses closing each year, and the total cost of late payments is estimated to be a whopping £11 billion each year. The Bill, as the noble Lord, Lord Hunt, graciously acknowledged from the Benches opposite, is a valuable economic pro-growth measure.

When the Bill reaches the statute book, it will advance the Government’s ambition for Britain to be one of the best places to start a new business, and Britain will then have the most effective late-payments regime in the G7. Knowing that payments will be made on time means that British businesses can rely on, or indeed bank on—for that is the right word—better cash flow, thereby releasing income for investment in capital and people. By delivering enforceable penalties, the Bill can change our payments culture.

I mentioned that 1.5 million small businesses are impacted each year by late payments. Some 900,000 of them are in the construction industry, so, as the Minister has made clear, the Bill will also tackle retentions in the construction industry. Retentions are justified, as the noble Lord, Lord Hunt, made clear, as security against defects, and high-quality, on-time performance matters, but retentions, as the noble Lord recognised, are not a neutral accounting mechanism. In practice, they starve supply-chain small businesses of cash. They remove cash from companies that are often working on very thin margins. The practical impact of retentions is to remove liquidity from businesses that need that cash to pay staff, apprentices, suppliers, and tax and financing costs. Retentions expose small businesses to insolvency risk and impose a costly recovery burden that is often disproportionate to the sums at stake.

These retentions are not a marginal issue. In the impact statement and in evidence to the other place, retentions were estimated at up to £8 billion a year. Some 50% of construction supply chain contractors experience partial or full non-repayment of retentions, and the construction industry experiences the highest number of insolvencies of any sector in the UK economy. This Bill, as the Minister acknowledged, goes to the heart of building a resilient construction supply chain. It will stop dominant players using market power through contractual complexity, payments delay and retention practices to fund their own working capital at the expense of smaller firms.

The Bill, if properly implemented, can tackle these issues once and for all. No longer will money earned by small companies become free working capital for larger firms. The Bill can deliver not simply legal change but a significant productivity boost. However, as noble Lords have noted in all the opening speeches so far, the devil is in the detail. So, in my remaining time, I shall ask the Minister about issues to which I hope we can return during the subsequent stages: my queries relate to enforceability, avoidance and remedies.

First, on enforceability, as the Minister is aware, while the Small Business Commissioner has been an excellent advance, construction disputes are outwith the commissioner’s powers due to the separate existing statutory construction adjudication arrangements. However, this existing construction adjudication regime is largely inaccessible for lower-value claims, so I invite the Government to consider measures to ensure that the enforcement ban that they are proposing will also be available to small construction supply chain companies. Is this the moment to consider whether the Small Business Commissioner should also have some jurisdiction in construction, or could the commissioner have a supporting role in construction payments behaviour even if the formal adjudication regime remains under the construction Act?

I turn to the second issue, which is avoidance. If the Bill is to fulfil its promise, it must prevent disguised or backdoor retentions. So does the Minister agree that the definition of “retention” in the Bill should be widely interpreted by the courts to ensure that contractors do not try to reimpose retentions by another name? In that service, will the Government commit to monitoring avoidance behaviours, including where main contractors seek alternative forms of security, which could be more expensive, more complex or simply unavailable to small companies? I encourage the Government’s commitment to use the secondary legislation powers in the Bill expeditiously when new backdoor retention practices emerge.

Thirdly, and finally, I come to remedies. The construction industry’s payment regime is already highly complex. It involves five dates and two notices. As the Minister has acknowledged, the Bill proposes to layer on top of that a further two-year transition arrangement. I encourage the Government to consider simplifying these transitional arrangements to ensure that small businesses can follow the changes without having to pay for specialist lawyers.

The Bill is a significant development in the Government’s plans for supporting growth. It will improve Britain’s payment culture and support all small and medium-sized enterprises. It will improve supply chain resilience, reduce insolvency pressures and support a more productive economy. I commend it to the Chamber.

Defending Democracy Taskforce

Baroness Alexander of Cleveden Excerpts

Monday 12th January 2026 Lords Chamber

Asked by

[Baroness Alexander of Cleveden]

To ask His Majesty’s Government what recent progress the Defending Democracy Taskforce has made on protecting democratic institutions.

[The Minister of State, Home Office (Lord Hanson of Flint) (Lab)]

The taskforce is driving forward a whole-of-government response to the threats to our democratic institutions. Recent progress includes developing new legislation to address the abhorrent harassment and intimidation experienced by elected representatives, the provision of personal cyber security advice, and the rollout of new National Protective Security Authority guidance to help protect those working in our democracy.

[Baroness Alexander of Cleveden (Lab)]

My Lords, I thank my noble friend the Minister. It seems wholly appropriate to have a Question this afternoon on defending democracy and democratic elections, although that is, of course, entirely coincidental. The Defending Democracy Taskforce is the main mechanism for tackling foreign interference in our elections. It is concerning that there has been no action to date by Ofcom under the foreign interference offence in the Online Safety Act. In this fast-moving arena, will my noble friend the Minister consider enhancing the status of the Defending Democracy Taskforce by bringing an annual Statement to Parliament about its work and key findings, and, as a signal of intent prior to any elections, consider publishing an overview of key threats identified to date to the UK’s electoral processes?

[Lord Hanson of Flint (Lab)]

My noble friend makes some valuable points. The Security Minister, the honourable Dan Jarvis, has already announced in November that he is co-ordinating a cross-government, counterpolitical interference and espionage action plan, which will report back to Parliament, in due course, from Ministers across government. A significant number of achievements have been made to date. I will take away my noble friend’s suggestions and report back to her in due course.