Commercial Payments Bill [HL]

Lord Faulkner of Worcester Excerpts

Committee stage
Tuesday 21st July 2026 Lords Chamber

[Lord Holmes of Richmond (Con)]

My Lords, there is a wonderful structure to the groupings so far. Group 1 started with Amendment 1 and group 2 starts with Amendment 2—we are all following so far. In moving Amendment 2, in my name, I will speak to Amendment 7.

Amendment 2 is simply a probing amendment and seeks to suggest 30 days as the period—period. There would be no sense of different payment periods. It would be 30 days, be you a local authority or not. In no sense am I expecting this to be accepted into the Bill. My purpose in tabling the amendment is to test where the thinking is on bringing those positions closer together over time. Ultimately, as we will come to in later groups, the potential is that, through smart contracts and fintech solutions, it will be possible to have all the terms set out. Once they are satisfied, atomic settlement automatically occurs by virtue of that smart contract and payment is instant.

Now, we are not there. On that journey, accessibility and inclusion, not least digital inclusion, need to be at the fore, and alternative means always need to be in the mix. However, as that is entirely possible today, 60 days seems somewhat old-fashioned in the light of what is already possible. It is fair to try to get all to the 60-day point because, as noble Lords will know, and as smaller micro entities out there will know even more painfully, oftentimes it is double that, never mind 60 days, if not more. However, I am interested in the Government’s plans to bring 60 through 45 to 30 on a continuing route, and to keep reducing that, because 60 is still far too long. In most instances even today, it is not justifiable or necessary.

Amendment 7 goes to the point of stopping the clock to have some greater precision as to what the end point is of that 60 or 30 days. I have used “unencumbered” funds as a proxy for that. It is not suggesting that this is the best or only measure, but there is a need for a more precise measure and to put in practical terms what this means for the service provider. If 60 days is always extended at the outset and then potentially stretched at the end, so that the funds finally get telegraphed only on the final day, there are a number of days for those funds to be unencumbered in that business’s account. But that is not 60 days. I appreciate that there are difficulties in trying to then work out what is standard practice for various financial service institutions to clear their funds. However, there are industry standards which could be considered, if not included, in that 60-day period. I look forward to the debate and to the Minister’s response. I beg to move.

[The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab)]

I advise the Committee that if this amendment is agreed to I will be unable to call Amendments 3 to 5 for reasons of pre-emption.

[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.