Commercial Payments Bill [HL]

Baroness Bowles of Berkhamsted Excerpts

Committee stage
Tuesday 21st July 2026 Lords Chamber

[Lord Leigh of Hurley (Con)]

My Lords, I rise to follow my indefatigable noble friend Lord Holmes and congratulate him on his Amendments 2 and 3. I agree that there is a real risk that 60 days will become the default, whereas 30 days is the market norm. I took the trouble to check with one of the co-directors of my family company—for which I declare an interest along with the others on the register—and he told me that we always pay the week after receipt of invoice, which I did not know. Therefore, one does not want to do anything that encourages companies to pay longer than their current practice is the case. The Government perhaps might have made it clear that the maximum is a maximum, but to say, “Thank you, good luck, and carry on”, for people who were paying earlier.

In respect of Amendment 4, we do need to clarify what is a public authority for these purposes; it is very important. But on the meat of the group, in terms of a company involved in an SAR—a special administration regime—I am grateful for advice and guidance given to us by some suppliers who have been in touch and are affected by this. It is estimated that some £835 million will be written off by those who are Thames Water suppliers, and that is just a direct cost; there will be a ripple effect for subcontractors and others. It does not seem right that, even though a supplier will be paid after an SAR, they may have to write off all their invoices for services provided to Thames Water before an SAR. This could be a disaster for many SMEs. Of course, contractually they have to keep supplying to make sure that, for example, the sewage is not running in the streets, and that the other essential services of Thames Water continue. This is very acute and needs immediate attention on the part of the Government.

I am surprised that the noble Lord, Lord Fox, has not signed our Amendment 100, as he normally likes these sorts of reviews. But I hope he and all others see the merit in having that.

Amendment 51 is a bit of a probing amendment, but it could become very important, as we could see, in the future, large purchasers contractually forcing smaller companies to accept cryptocurrency. It is not specified in the amendment that it is cryptocurrency, but it is clear that is what we mean. Many people would not want to be forced to accept cryptocurrency, but such is the power of a larger company they may find themselves in a position so to do. The amendment is predicting what might happen in the marketplace and asking the Government to think about it now and let us know their view. It would be perfectly reasonable for this to happen if both parties genuinely agreed, but not if one is, frankly, bullied into it.

I am very interested in Amendment 52 from the noble Baroness, Lady Bowles, and look forward to hearing her arguments.

[Baroness Bowles of Berkhamsted (LD)]

That was a hint to rise. I will speak to my Amendment 52, but I must first apologise to the Committee that I was unable to speak at Second Reading, my scrutiny hours having been occupied in the passage of another Bill, which also accounts for why this was rather a last-minute—almost literally—amendment, so there was no pre-discussion with anybody, but I would have liked to give it some airing.

I wholeheartedly support the core intention of the Bill, and I will make no secret of the fact that I would have preferred an immediate 45-day limit rather than 60 days. But scanning through the Bill and the amendments once I was released to have the time to do so, it seemed to me that there is a blind spot in that there were no rules to ensure that small businesses could receive stage payments, leaving them at risk of being forced to rely on end-of-contract invoicing. In some instances, way-stage payments may be agreed, but many businesses feel that they cannot take the risk to bid for a contract in the first place. Others are exploited and put dangerously at risk of non-payment in contractor insolvencies, the very issues that the Bill seeks to resolve, so there is a huge loophole.

In the Government’s own consultation phase last year, small business federations and independent suppliers explicitly warned against an invoice-centric blind spot. Yet here we are, with it unsolved. We do not need to look far for a solution. Stage payments have been a standard procedure in construction for 30 years, so why not follow that precedent? If it works for construction, why not for the wider economy?

My amendment proposes a simple entitlement: for contracts exceeding 45 days, small undertakings—which I have defined as having up to 50 employees—must have the right to invoice at intervals of no more than 45 days. If you do the sums on this, under my amendment a small firm must fund its own costs for 45 days before invoicing, but then it still has to wait up to 60 days for payment. That is 105 days, or three and a half months, before a single penny arrives, during which all the salaries and business costs have to be paid. That is still an enormous burden. But without this amendment, that gap is effectively uncapped.