Commercial Payments Bill [HL]

Baroness Thornton Excerpts

2nd reading
Tuesday 9th June 2026 Lords Chamber

[Baroness Thornton (Lab)]

My Lords, I am very pleased to welcome the Commercial Payments Bill and to take part in this Second Reading. I congratulate my noble friend the Minister on his absolutely outstanding introduction to it. I intend to make two points about why the Bill is so important to our business community, particularly those seeking to establish and grow enterprises of all kinds: small businesses and social enterprises.

But first, I want to say that I support this legislation for personal reasons. At a very early age, I was aware of the importance of invoices being paid in good time. My dad, Peter Thornton, was a master plumber who set up a plumbing and building business in Bradford when I was a child. It was a successful business that grew to employ a few dozen employees and provide apprenticeships for plumbers, electricians and brickies. He remained proud of that for the whole of his life. Even at 10 years old, I was aware that there were moments in the early days when customers delaying payment caused anxiety and belt-tightening times at home. Sad to say, some of this was the local authority dragging its bureaucratic feet and not paying bills in a timely fashion.

Many years later, having worked on a freelance basis and self-employed, I set up my own small business with a business partner. We were a micro-business— I think we employed 10 people at the most—and a very happy company. But again, my business partner and I had moments of anxiety caused by clients delaying payment of invoices and dragging their feet, particularly large companies that did not recognise the effect that an extra 30 or 60 days, or delays that were arbitrarily imposed, had on our company and its cash flow.

My second reason for supporting this Bill is that I am the founding chair of Social Enterprise UK, of which I am now patron. I am currently vice-chair of the Social, Cooperative and Community Economy All-Party Group, and a senior associate of E3M, an organisation that supports social enterprises contracting to deliver public services. Social businesses are businesses. Many are small and face the same challenges as all SMEs. They seek to make surpluses, like any business. The thing that distinguishes them, of course, is what they use those surpluses for: to fulfil their social purpose. Equally, they depend on the timely payment of invoices and suffer in the same way that many noble Lords, including my noble friend the Minister, have spoken of from delayed payments and non-payment. There is an unfairness in that, sometimes with disastrous consequences.

A recent consultation by Social Enterprise UK about procurement, asked: to what extent do you agree or disagree that requiring contracting authorities to exclude suppliers from bidding on major contracts if they cannot demonstrate prompt payment of invoices to their supply chains within an average of 60 days would help improve payment by suppliers to the public sector? Of course, there was agreement about this. One of the comments—I am glad I am following the noble Lord, Lord Lansley, saying this—was:

“A 60-day requirement should be the minimum, but we would like to see it set to at least 30 days. This reflects what the Fair Payment Code recommends for SMEs, and would also reduce barriers for social enterprises, where healthy cash flow is crucial and late payments are often a barrier to entry. We would also suggest altering the wording of this recommendation to a ‘maximum of 30 days’ rather than an ‘average of 60 days’, to reflect the importance of prompt payment of invoices”.


This is why I am pleased to follow the noble Lord, Lord Lansley, who at least suggested 45 days, and I think thousands of SMEs would agree with that quotation.

I seek assurance from my noble friend the Minister that this legislation will apply as much to social enterprises, co-operatives and community businesses as all other businesses. On that note, I welcome this Bill and I wish it speedy progress through the House.