Commercial Payments Bill [HL]

Debate between Lord Faulkner of Worcester and Lord Holmes of Richmond

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.