Asked by: Lord Sharpe of Epsom (Conservative - Life peer)
Question to the Department for Business, Innovation, Science and Trade:
To ask His Majesty's Government, further to the remarks by Lord Leong on 21 July (HL Deb cols 1068-1070), what assessment they have made of whether late payments may be the fault of a third party or a bank; and whether such payments should be subject to statutory interest.
Answered by Lord Leong - Parliamentary Under-Secretary of State (Department for Business, Innovation, Science and Trade)
The Government has not made a specific assessment of late payments being caused by third parties or a bank, but it does recognise late payments are often accidental and can arise due to issues with systems.
The Commercial Payments Bill preserves and strengthens the existing statutory interest regime, under which statutory interest arises where a qualifying payment is made late. Where a qualifying debt remains unpaid after the relevant date, statutory interest will generally accrue even if the purchaser attributes the delay to its bank, payment provider or another third party begins to run and strengthens enforcement of payment obligations.
Asked by: Lord Sharpe of Epsom (Conservative - Life peer)
Question to the Department for Business, Innovation, Science and Trade:
To ask His Majesty's Government, further to the remarks by Lord Leong on 21 July (HL Deb col 1078), in which scenarios the Secretary of State would consider adopting a business-size definition different to existing definitions.
Answered by Lord Leong - Parliamentary Under-Secretary of State (Department for Business, Innovation, Science and Trade)
For the purpose of exemptions to maximum payment terms under the Commercial Payments Bill, the Government will consider aligning with business size definitions in existing legislation. Definitions of business sizes will be set out in secondary legislation, following consultation with stakeholders. Any departure from an established definition will therefore require a clear and evidenced justification.
Asked by: Lord Sharpe of Epsom (Conservative - Life peer)
Question to the Department for Business, Innovation, Science and Trade:
To ask His Majesty's Government, further to the remarks by Lord Leong on 21 July (HL Deb col 1078), whether businesses will be expected to determine their own size, and that of their business partners.
Answered by Lord Leong - Parliamentary Under-Secretary of State (Department for Business, Innovation, Science and Trade)
For the purposes of the Commercial Payments Bill there is no general requirement for businesses to establish their size or that of their partners. Certain categories of business, will be able to benefit from exemptions from maximum payment terms – on the basis of size. Therefore, businesses wanting to rely on these exemptions will need to ensure they fall within the relevant category. This should be simple and pose minimal burden for those businesses seeking exemptions. Business size thresholds will be confirmed through regulations following a consultation with stakeholders.
The Small Business Commissioner will be able to examine whether the relevant size conditions have been met and take appropriate action where an exemption has been claimed improperly.
Asked by: Lord Sharpe of Epsom (Conservative - Life peer)
Question to the Department for Business, Innovation, Science and Trade:
To ask His Majesty's Government, further to the remarks by Lord Leong on 21 July (HL Deb cols 1068-1070), whether they plan to review the 60-day maximum payment term for non-public authorities; and what plans they have, if any, to incentivise early payment.
Answered by Lord Leong - Parliamentary Under-Secretary of State (Department for Business, Innovation, Science and Trade)
Large businesses are required to publish payment data through the Payment Practices and Performance Reporting Regulations 2017. The effects and impact of the Commercial Payments Bill will be monitored following its implementation. Sixty days is a maximum, not a target. The Government will continue to encourage businesses to agree and meet shorter payment terms. We will continue our work to encourage businesses to pay even faster with the Small Business Commissioner who administers the Fair Payment Code, encouraging businesses to pay in 30 days.
Asked by: Lord Sharpe of Epsom (Conservative - Life peer)
Question to the Department for Business, Innovation, Science and Trade:
To ask His Majesty's Government, further to the remarks by Lord Leong on 21 July (HL Deb col 1070), what assessment they have made of whether commercial contracts subject to sections 233, 233A and 233B of the Insolvency Act 1986 are treated differently to other creditors.
Answered by Baroness Lloyd of Effra - Parliamentary Under-Secretary of State (Department for Digital, Culture, Media and Sport)
All creditors in an insolvency are treated equally in their class according to a strict statutory priority. Without the provisions in sections 233 to 233B Insolvency Act 1986, essential suppliers could demand payment of existing debt, thereby undermining this priority. The provisions strike an important balance between the rights of the supplier and the benefits of business rescue, with mitigations included to prevent hardship. A 2023 review of the provisions found early positive signs that they are meeting their objectives and produced an estimated ongoing annual benefit to business creditors from increased company rescue of £73.2m.
Asked by: Lord Sharpe of Epsom (Conservative - Life peer)
Question to the Department for Business, Innovation, Science and Trade:
To ask His Majesty's Government, further to the remarks by Lord Leong on 21 July (HL Deb cols 1068-1070), what assessment they have made of the economic impact of the new section 2E(2) of the Commercial Payments and Interest on Late Payment Act 1998.
Answered by Lord Leong - Parliamentary Under-Secretary of State (Department for Business, Innovation, Science and Trade)
The Government has assessed section 2E(2) as part of the wider impact assessment for the Commercial Payments Bill as a whole, where the measures are aimed at addressing the estimated £11 billion cost of late payments to cost the UK economy each year.
Section 2E(2) provides a targeted exemption from the statutory payment term restrictions, where the purchaser is the smaller party, preserving flexibility for smaller purchasers when contracting with larger suppliers. The impact assessment looks at the costs of businesses identifying and implementing exemptions. Exemptions introduce additional administrative burdens for businesses, with larger estimated costs for large businesses compared to smaller ones. The full assessment can be found in the costs and benefits analysis annex of the published impact assessment: https://assets.publishing.service.gov.uk/media/69c054b11263ce46c3690c7c/prompt-payments-primary-legislation-impact-assessment.pdf
Asked by: Lord Sharpe of Epsom (Conservative - Life peer)
Question to the Department for Business, Innovation, Science and Trade:
To ask His Majesty's Government what steps they are taking to help small- and medium-sized enterprises to manage periods of employee ill health more effectively; and to reduce avoidable economic inactivity.
Answered by Lord Leong - Parliamentary Under-Secretary of State (Department for Business, Innovation, Science and Trade)
The Government is committed to helping businesses, particularly small and medium enterprises, to support staff who are balancing work and health conditions. The Government has welcomed the Keep Britain Working Review’s findings, including its emphasis on shared responsibility for workplace health. It is progressing this through employer-led Vanguards to identify practical and scalable solutions, including representation from smaller businesses. We are also making changes through the Employment Rights Act to make it more likely flexible working requests are accepted, with many employers already offering flexible working arrangements. Together, this will support more people to remain in, and return to, employment.
Asked by: Lord Sharpe of Epsom (Conservative - Life peer)
Question to the Department for Business, Innovation, Science and Trade:
To ask His Majesty's Government what assessment they have made of the availability of evidence on the efficacy of employee health benefits to support decision-makers in small- and medium-sized enterprises to invest confidently in workforce health solutions.
Answered by Lord Leong - Parliamentary Under-Secretary of State (Department for Business, Innovation, Science and Trade)
The Keep Britain Working Vanguard Phase is focused on tackling health-related economic inactivity and promoting healthy and inclusive workplaces. We are partnering with employers, including small and medium sized enterprises (SMEs), and employee health benefit providers, to test and identify which interventions are most effective in preventing and managing employee ill health. This will help strengthen the evidence base on what works in practice. The programme will also explore the barriers SMEs face, including access to clear and relevant evidence, and consider what support they need to make confident, informed decisions about adopting appropriate workforce health solutions.
Asked by: Lord Sharpe of Epsom (Conservative - Life peer)
Question to the Department for Business, Innovation, Science and Trade:
To ask His Majesty's Government what assessment they have made of the reasons why British Steel has not filed statutory accounts for the year ending 31 December 2024; what discussions they have had with (1) the company, (2) its directors, (3) Companies House, or (4) the Financial Reporting Council, about the delay; and when they expect those accounts to be filed.
Answered by Baroness Lloyd of Effra - Parliamentary Under-Secretary of State (Department for Digital, Culture, Media and Sport)
To date, funding of £484m has been provided to British Steel Limited under the provisions of the Steel Industry (Special Measures) Act, and the full amount is recoverable as a debt due to the Crown, as set out in section 3(6) of the Act. There are no conditions attached save the requirement for the funds to be used in accordance with the purpose set out in legislation. All funding released to British Steel is reviewed and approved in advance. Recoverability of this debt is currently being assessed, and the resulting treatment will be reflected and published in the Department for Business and Trade's accounts for 2025-26.
HMG has set out its policy and operational intent to British Steel’s auditors under the Steel Industry (Special Measures) Act 2025. This does not constitute a financial guarantee, indemnity or underwriting of liabilities and reflects material already in the public domain.
British Steel remains owned by Jingye and HMG’s powers to intervene under the Steel Industry (Special Measures) Act 2025 are designed to maintain steelmaking and avoid a disorderly closure of the blast furnaces. We continue to work with Jingye to find a pragmatic and realistic solution for the future of British Steel.
The preparation and filing of statutory accounts are a matter for the company and its directors. The arrangements for preparing and approving company accounts are a matter for British Steel and its directors, in line with their statutory responsibilities.
Asked by: Lord Sharpe of Epsom (Conservative - Life peer)
Question to the Department for Business, Innovation, Science and Trade:
To ask His Majesty's Government what arrangements are in place to enable the directors of British Steel to prepare and approve company accounts.
Answered by Baroness Lloyd of Effra - Parliamentary Under-Secretary of State (Department for Digital, Culture, Media and Sport)
To date, funding of £484m has been provided to British Steel Limited under the provisions of the Steel Industry (Special Measures) Act, and the full amount is recoverable as a debt due to the Crown, as set out in section 3(6) of the Act. There are no conditions attached save the requirement for the funds to be used in accordance with the purpose set out in legislation. All funding released to British Steel is reviewed and approved in advance. Recoverability of this debt is currently being assessed, and the resulting treatment will be reflected and published in the Department for Business and Trade's accounts for 2025-26.
HMG has set out its policy and operational intent to British Steel’s auditors under the Steel Industry (Special Measures) Act 2025. This does not constitute a financial guarantee, indemnity or underwriting of liabilities and reflects material already in the public domain.
British Steel remains owned by Jingye and HMG’s powers to intervene under the Steel Industry (Special Measures) Act 2025 are designed to maintain steelmaking and avoid a disorderly closure of the blast furnaces. We continue to work with Jingye to find a pragmatic and realistic solution for the future of British Steel.
The preparation and filing of statutory accounts are a matter for the company and its directors. The arrangements for preparing and approving company accounts are a matter for British Steel and its directors, in line with their statutory responsibilities.