Commercial Payments Bill [HL]

Debate between Lord Holmes of Richmond and Lord Fox

Committee stage
Tuesday 21st July 2026 Lords Chamber

[Lord Holmes of Richmond (Con)]

My Lords, it is a pleasure to start this Committee on the Commercial Payments Bill. In doing so, I declare my relevant technology interests as adviser to the Crown Estate and Simmons & Simmons LLP, and as non-executive director of the Avalanche Foundation and Avalanche (BVI) Inc. The Bill is incredibly significant, particularly for a small business or microbusiness which has found itself for far too long on the wrong end of late payments.

In many ways, my Amendments 1 and 9 in this group go to the very essence of the Bill. There is much that is significant in the Bill but, largely, all of it is subsequent to that fundamental point around the 60-day and 30-day payment periods. Everything else in the Bill is largely supportive of that reality, so this first group of amendments addresses the fact that it is critically important that the Bill is absolutely precise as to when the clock starts and ends. As the Bill is currently drafted, it is not only entirely possible but an actuality for thousands of businesses that they will be told that they will receive 60-day payment terms, when in reality the payment may not arrive within 60 days, 80 days, 100 days or up to 120 days. That will still be possible if the Bill remains in its current form. There needs to be greater precision about the start point and end point of that clock.

Amendment 1 in my name addresses that start point and suggests that the purchaser has to give clarity to the supplier about how they are to give notice. This is critical because at the moment time can disappear, with an invoice or other notice being given by the supplier in good faith only for them to find themselves bounced around that often larger business—this is not necessarily because it is gaming, although sometimes that is certainly the case, but because of its multidepartmental and multipoint nature—until that 60-day clock starts. Amendment 1 addresses this and would sharpen up how that notice period has to begin. If clarity is not provided, the amendment would give clarity in that the notice can be deemed to have been given by the provider of the product by means of a recognised document that anybody in business would recognise—the obvious one being an invoice.

Similarly, Amendment 9 goes to the issue of verification. It would stop, as a consequence of the Bill, verification being used to expand or extend terms other than what the Bill seeks to achieve. Together, the amendments look at the start point of the clock and would give the precision required to stop days going by before day one is triggered. We will come to amendments in later groups about effective precision around ending the clock, but these amendments, particularly Amendment 1, would give the precision required for all involved to know that day one means day one. I look forward to the debate and the Minister’s response. I beg to move.

[Lord Fox (LD)]

My Lords, I will speak to Amendment 10 in my name. Before that, I commend the noble Lord, Lord Holmes, on Amendments 1 and 9. These seem to be eminently sensible suggestions. I wonder whether, if the Small Business Commissioner makes very clear their view on when the clock starts ticking, that would make it very clear should any dispute become necessary. At the very least, there needs to be clarity from the Small Business Commissioner if these amendments are not accepted.

I thank the noble Lords, Lord Sharpe, Lord Hunt and Lord Leigh, for their support of Amendment 10. The intention of the amendment is clear. Increasingly, economic activity is switching from familiar structures and supply chains to one where businesses market their goods and services via third-party marketplaces and intermediaries, and where the subsequent payment goes back through those intermediaries. The amendment would bring such marketplaces and intermediaries into the context of the Bill by providing that payment is not treated as made to a supplier until the supplier actually receives the money, by requiring any intermediary that collects on a supplier’s behalf to pay it within seven days, regardless of how the intermediary is legally categorised.

I think this is a fair change, though I am sure that there will be resistance from the sector. The focus may well be on the time needed by the intermediary to make the payment to the vendor. A distinction may have to be made between when an intermediary has control of the goods in a warehouse and when it is purely acting as an agent. I am happy to have a discussion and debate about this, and there may be ways in which this can be dealt with. However, it would be very remiss for the legislation to leave your Lordships’ House without any provision, either primary or secondary, for the Small Business Commissioner to have or take the power to bring intermediaries into the remit of the Bill.

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[Lord Holmes of Richmond (Con)]

My Lords, I support my noble friend Lord Sharpe, having signed all the amendments in his name. There are two key principles at stake here, as he eloquently set out: first, not to introduce yet another definition and, secondly, to take the opportunity to bring some clarity, consistency and coherence of definition. This would not just be beneficial for this Bill but have benefits far beyond it. As he rightly set out, this Bill may not be the place for that second objective. It is obviously the place for the first but, if it is not the place for the second, it would certainly seem to provide the right level of focus and spotlight to enable the department to look at this and bring forward plans to have definitions and classifications that are clear and consistent but also provide what anybody in whatever size of business they are involved with needs. So those definitions are useful.

[Lord Fox (LD)]

My Lords, the noble Lord, Lord Sharpe, brought up a number of important issues, but I do not think he brought up any viable solutions. He spoke at the beginning about the proliferation of definitions, then sought to add to that proliferation with some new definitions.

He is right that some level of consistency should be required. For the purposes of this Bill, that consistency has to come from the purchasing Act 2023, unless that is not available. However, the point made by the noble Lord, Lord Holmes, is that there should be a more concerted effort in another place to get meaningful definitions of business sizes. The noble Lord, Lord Sharpe, made a point on the ease of determining those definitions. As the noble Lord, Lord Leong, will know, I am always keen to have a look at Companies House and see how it is doing. It has an important role in a number of different areas; this is just one. A progress report on Companies House when we get back would not be amiss.

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[Lord Holmes of Richmond (Con)]

My Lords, it is a pleasure to follow my friend, the noble and learned Lord, Lord Thomas, and the excellent and eloquent way in which he introduced his amendment, which I was delighted to sign. As he rightly pointed out, this could be seen as the absolute premier DBIST amendment. It goes to the heart of what the department is. It has business and innovation at its very heart, and it would make complete sense for the department to pass it before Ministers have even changed the stationery in their various departmental boxes.

It was a pleasure to serve under the chairmanship of the noble and learned Lord as he chaired the Special Public Bill Committee on the then Electronic Trade Documents Bill. I variously described the Bill as

“the most important Bill that no one has ever heard of”.—[Official Report, 19/7/23; col. 2326.]

and the blockchain Bill that rightly never mentions blockchain. It was perfect in its two-page shortness—perfect, in that it never mentioned any specific technology. It merely set out criteria that any technology would have to meet to perfect an electronic trade document. When we talk about electronic trade documents, we are talking about economic, environmental and social benefits and, for the purposes of this Bill, payments efficiency and payments benefits.

The ability to combine everything in an electronic digital format is possible only because of the criteria that blockchain and distributed ledger technology allows to have a possessory document—that is, if you hold the document, you hold the goods. Only through those technologies is it possible to thus have those possessory documents in electronic form. This would be good for payment but it would also be good for UK trade. There is currently a huge trade finance deficit painfully suffered by many businesses already involved in trade but, perhaps even more significantly, by all those tens of thousands of businesses that currently do not trade internationally but could. The provisions in this amendment really highlight that opportunity.

As the amendment so clearly sets out, international trade should be within the purview of this Bill and, in many ways, this lays the groundwork for many of the technology amendments which we will come to later this evening. It makes the point about what is possible today without insisting that it has to be used and come into force on the date the statute comes into force. By being in the statute, with the time period as set out in the amendment, it states the case clearly. It provides the time for adoption but really speaks to the possibility and, largely, the economic opportunities for all those businesses, particularly small and micro-businesses, which could avail themselves of all the benefits of international trade.

[Lord Fox (LD)]

My Lords, very briefly, this would seem to be the perfect amendment for the Minister to accept. As pointed out, it signals an innovative forward direction for the new department, it utilises complex legislation that has already happened, it does not cost anything, and nothing will happen for two years—perfect.

Product Regulation and Metrology Bill [HL]

Debate between Lord Holmes of Richmond and Lord Fox

Report stage
Wednesday 26th February 2025 Lords Chamber

[Lord Holmes of Richmond (Con)]

My Lords, following the theme of benign attention from government to amendments that have washed up in this group, I shall speak to my Amendment 41. In doing so, I declare my technology interests as set out in the register, not least as it applies to Socially Recruited, an AI business.

There are many things that are not in the Bill, data centres being one of them; yet these are the factories and foundries that are going to fuel our fourth industrial revolution, which is already well under way. We might think back to all that Victorian factories legislation, all quite appropriate and proper, whereas all I am seeking here is not even a whole statute—which we could have on data centres alone—but merely one amendment, which I hope the Government can look benignly upon. It simply asks the Government to undertake a consultation to look at a new standard for the measurement of the power usage of data centres.

We are going to rely increasingly on data centres for almost everything that we do in this country. How we power them, where we site them, the inputs, the outputs, where the technology comes from—all of these are key features currently utterly unconsidered in any legislation or regulations. All that my Amendment 41 seeks to do is suggest that the Government launch a consultation, following the passage of the Bill, to look at the effectiveness of a,

“metrology standard for the power usage of data centres”,

and, not least, to reconsider the current power usage effectiveness—PUE—standard and whether it is up to the job in hand.

[Lord Fox (LD)]

My Lords, this has been a really interesting debate. It is a shame that we cannot have this debate on group 3, where we could set out some of the issues that I am going to explain very briefly—without repeating the speech that I am going to make in group 3 —on how scrutiny can be enhanced for secondary legislation. I share the concern of your Lordships’ House that insufficient and inadequate scrutiny happens even when we have statutory instruments. As the noble Lord, Lord Hunt of Wirral, pointed out, we need something better than the way in which we deal with statutory instruments at the moment. Very rarely, if ever, are they turned away; we have regret Motions that, in sum, make no difference at all.

To some extent, we are protecting a paper tiger here. What we should be talking about is whether there is a way we can make sure that these future regulations go through a process that is properly scrutinised. The proper debate on that will happen in group 3, and we will take it through. I completely agree with the noble Lord, Lord Jackson, that the issue of criminal sanctions is a concern and that we need to have a way of scrutinising it. That will be included when I speak to group 3, as will be the environmental measures raised by the noble Lord, Lord Holmes, in this group, and by the noble Baroness, Lady Bennett, in the next group.

We do have a way of having greater transparency, but it is not by statutory instrument to be nodded through over and over again. We have to be honest with ourselves about what we actually do when we are dealing with secondary legislation. That is why I have been working very hard, and why I welcome the conversations I have had with the Minister and his team, to try to open up something that will not only give us better scrutiny—I would say nearly proper scrutiny—but also something that will survive contact with the government majority at the other end. That is the opening point which, to some extent, is a speech for a different group.

With respect to this group, Amendment 61 mandates additional consultation, and Amendment 55—which has strangely been put in group 12—strengthens the affirmative process. I was very pleased to see the name of the noble Lord, Lord Anderson of Ipswich, added to those amendments; I very much appreciated his speech today, and that of the noble Lord, Lord Pannick. Those amendments add further resilience and help to meet some of the issues that were raised by your Lordships’ committee.

Once we have discussed the changes in group 3, hopefully with the response of the Minister, they will also contain some of the issues raised by the noble Lord, Lord Deben. Again, the fundamental question is: how do we properly review legislation? I am hoping that we have come up with a way that will do this. That is why we are keeping our powder dry on these Benches. We have put a lot of work and a lot of hope in what we are going to be doing in the next group, and I think we can give your Lordships’ House, and indeed parliamentarians as well as all the external bodies, a way of participating in the proper pre-scrutiny of statutory instruments before they ever reach your Lordships’ House, whether it is by affirmative or negative process when they get here.