Commercial Payments Bill [HL]

Lord Holmes of Richmond Excerpts

2nd reading
Tuesday 9th June 2026 Lords Chamber

[Lord Holmes of Richmond (Con)]

My Lords, what a pleasure to follow my noble friend Lord Leigh of Hurley and to hear some of his family history. I always suspected that he was a big fan of sofa government.

I declare my interests as set out in the register as adviser variously to the Crown Estate, Endava plc and Simmons & Simmons LLP. I give more than warm congratulations to the Minister for the way in which he not only clearly and precisely set out the provisions of this Bill but did it with such experience and expertise. In all my dealings on previous Bills, I have always found the Minister passionate, constructive, practical and a pleasure to deal with. That will certainly be the case for the negotiations that we have coming up on this Bill.

It is a good Bill and I welcome it. To mash up my biblical references, it is full of good intentions but we all know what good intentions have the potential to pave and, as has already been noted, the devil is in the detail. I will go to some of that detail in the first instance. Why is it that if you are a small or micro entity you have a maximum payment term of 60 days, whereas if you are a public authority you have 30 days? I am a big supporter of public authorities. The roles and responsibilities they have are extraordinary, and the difference they make to people’s lives on a daily basis is to be absolutely applauded. My old man worked for a local authority; it is in the blood. But they are in a very different circumstance from micro entities when it comes to late payments. These are not ideal, but they are less likely to break a public authority in the same way as we see in those 14,000 businesses year on year. These are 14,000 tragic stories for all those individuals involved and in how that ripples out through their families and communities.

Secondly, I ask the Minister: when it comes to the penalties, why does the Bill specify 1% of UK revenues? As has already been noted by the noble and learned Lord, Lord Thomas of Cwmgiedd, in his excellent and powerful speech, we need not only to consider the international context from a trading perspective but to understand the modern environment in which we are working. Do we not need to see something consistent with approaches that have been taken in other pieces of legislation, such as the Online Safety Act, which looks to global turnover in this respect?

The Bill is positive, with many good intentions, which I welcome, but it could be made so much more powerful and impactful if it had the golden thread of inclusion and innovation running right through it. So many of the Bill’s intentions would massively benefit from AI, data analytics and inclusion by design. Take, for example, structured payment event data. AI could perform such a profound service to the intention of the Bill in this respect. Take also the Small Business Commissioner’s enforcement action. That will result in a rich disputes intelligence database, ripe for data analytics to be applied to it.

It is worth considering a number of “no’s” currently in the Bill, which, through amendment, we need to convert to “yeses”. First, there is no digital layer or auto-enforcement provisions. The tasks and responsibilities being given to the SBC very much will the end, but without providing the means in terms of resource, funding and technologies, to set out just three. When one considers the caseload—the amount of data the SBC will have to engage with—this is completely impossible without sophisticated AI, digital case selection tools and so on. What is the Government’s intention in this respect, and, without going into the detail, would it not be better to see some more of this at the principles layer of the Bill?

A second “no” is that there is none of the data architecture required to optimise the solutions sought in the Bill. The current structure involves self- referral in bringing matters to the attention of the SBC, which will inevitably result in a reactive rather than proactive, and potentially predictive, posture on the SBC’s part. What is the Government’s intention in this respect, looking at how, with an effective data architecture framework, we could enable the use of vital data from other parts of the state in the late payment process?

So much of this is about small and medium-sized enterprises and the asymmetry they often experience. The Bill should be focused on SMEs, because, as the Minister rightly identified, they are the backbone of the UK economy and are often described as such by government; but so much more needs to be delivered in order to support that spine. It is easy to talk about, but it is much more difficult to put in place all the measures required to support them. The Bill has the potential to do that, yet it contains none of the digital tools that would enable SMEs to engage with this new process. In order to track progress, to understand their rights, to calculate what is owed to them and to understand the pathway to the enforcement and investigation process, SMEs—which are often the furthest away from digital inclusion, enablement and empowerment —will be in a similar position without greater government action to support, enable and empower them.

The Bill contains nothing on equality. Late payments are not a neutral concept; they fall disproportionately on SMEs and, often, on minority owners, older owners, disabled person owners and community-based businesses. What is the Minister’s view on the analysis we would like to see in the Bill of where late payments currently fall and their impact from an equalities perspective?

Similarly, there is nothing in the Bill on ESG, yet the supply chain is vital to this. Late payments all too often occur at what is described as the lower or bottom end of the supply chain. What provisions does the Bill contain to support the Government’s ambition for supply chain transparency and positivity? Currently, because of the way late payments impact, there is no sense of how that is measured from that critical ESG perspective.

There are some excellent provisions in the Bill, and with amendment they can be excellent plus. We need to empower and enable small and medium-sized enterprises to do what they do best: run and grow brilliant businesses and provide great goods and services right across the United Kingdom. Through amendments, we can make the Bill better economically and environmentally for everybody. With amendments, we can make the Bill well worthy of prompt payment.