Commercial Payments Bill [HL]

Debate between Lord Holmes of Richmond and Lord Leong

Committee stage
Tuesday 21st July 2026 Lords Chamber

[Lord Leong (Lab)]

My Lords, I thank all noble Lords for their contributions and amendments in this group. The Government share the objective of fair payment rules and are committed to ensuring that businesses, especially SMEs, are paid promptly. The 60-day period was set following extensive consultation with industry, with more than 850 responses across all sectors and business sizes. The Government consider the 60-day cap to be a balanced and proportionate approach.

As I mentioned at Second Reading, there is no reason why businesses cannot pay before 60 days and I think most do. I am sure that noble Lords here who have businesses pay much earlier than 30 days; the Department for Business and Trade—now called the Department for Business, Innovation, Science and Trade—pays 99% of its bills within 30 days. We are trying to encourage behavioural and cultural change, and 60 days is a maximum. I am sure that most businesses pay within that period.

[Lord Holmes of Richmond (Con)]

Does the Minister have an analysis of the various levels and sizes of the entities that responded to the consultation, married to the length of time that they sought? If he does not have it at his fingertips, he could write. In effect, does the research show an interesting picture about which size of entities were asking for which length of payment period?

[Lord Leong (Lab)]

I am sure we do; I will speak to officials and make sure I share that information with all noble Lords.

This represents a significant strengthening of existing law, where payment terms of more than 60 days are often imposed on suppliers. Some smaller businesses argue that 60 days remains too long, while some larger businesses express concerns about the impact of maximum payment terms on working capital and established commercial arrangements. The 60-day period therefore represents a carefully considered balance between those competing concerns.

Amendments 2 and 11 would reduce payment periods either by creating a statutory expectation that the maximum period will be tightened in future or by reducing the cap for non-public authority purchasers to 30 days. Reducing the maximum period to 45 or 30 days may not work effectively across all sectors, particularly those with complex supply chains. Amendments 3 and 5 would move in the opposite direction, extending the maximum period to 35 days for public authorities and 65 days for other purchasers. The Government cannot support these changes either. The Bill’s 30-day period for public authorities is aligned with wider public procurement rules; extending those periods would weaken the Bill’s ambition and delay payments to suppliers, including small businesses.

Amendment 7, in seeking to define payment more clearly by reference to funds being received, could result in purchasers that have done their best to pay on time being punished for issues that are out of their control—for example, when a payment instruction has been made on time by the purchaser but is subsequently delayed by banking processes outside the purchaser’s control. The Government believe that the Bill provides sufficient clarity and improvement of payment practices, taking into account the need for businesses’ flexibility on how payments are made.

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[Lord Leong (Lab)]

I am grateful to the noble Lord for bringing that specific example. I need to be very specific about this, because it refers to a particular organisation; I need to get my facts correct and will write to him.

[Lord Holmes of Richmond (Con)]

My Lords, I thank all noble Lords who participated in this debate and tabled amendments, and I thank the Minister for his response. It was already clear but is particularly so with that final exchange: the SAR provisions are particularly significant and could barely be more up to the minute, timely, and in need of serious consideration to ensure that they are got right. As my noble friend Lord Leigh pointed out, it is a very specific and very different situation to that of almost all creditors in those circumstances.

I also thank the noble Lord, Lord Fox, for his example of going to a hot country for 645 days; it is not clear whether the term was only 60 days when he went there but he liked it so much that an additional 585 days were added to the term. It is also fantastic to have the noble Baroness, Lady Bowles, on the bus for the Bill.

I think we will be coming back to some of these issues on Report, and between Committee and then— particularly those pertaining to SAR situations, to stress it again. For now, I beg leave to withdraw my Amendment 2.

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[Lord Sharpe of Epsom (Con)]

My Lords, I thank my noble friend Lord Holmes of Richmond for this amendment. I am sorry that noble Lords have caught me eating a toffee, which was a terrible error.

The ability to charge statutory interest on late payments was established by the Late Payment of Commercial Debts (Interest) Act 1998. That Act, however, introduced that right only as a right to charge, which many businesses may choose not to exercise out of fear of damaging commercial relationships or losing out on contracts. With this Bill, statutory interest becomes an implied mandatory term of a commercial contract. Therefore, the interest will accrue automatically on overdue payments and the burden will not fall on the suppliers to claim that interest.

The amendment from my noble friend seeks to ensure that late payment interest is paid to a supplier within five working days. It further provides that where statutory interest is not paid within that timeframe, the unpaid interest will itself form a part of the qualifying debt and therefore be liable to a further charge of statutory interest. While we support this policy, we must ensure that businesses, particularly SMEs, are given adequate time to adapt to the new regulations.

The impact assessment recognises that small and medium-sized businesses will shoulder

“a higher proportion of net costs”

associated with this policy. It further states:

“The policy does not create specific mitigations for SMEs, rather information will be provided to all business, to support their understanding and complying with the new policy requirements, in line with previous guidance issued on statutory interest”.


Those words might not be particularly comforting for many small businesses that are already struggling. Might I suggest that the Government do a little more to explain precisely how they will support those businesses? What kinds of information will they provide?

I have tabled an amendment to the commencement clause of the Bill, to be debated later, which would prevent that clause being brought into force for one year. That is the kind of measure that will give businesses the time to adapt, understand the new guidance and prepare for the new regime. I hope that when we come to debate that amendment, the Minister will give it serious consideration.

[Lord Leong (Lab)]

My Lords, I thank the noble Lord, Lord Holmes, for this amendment. I understand the concern that statutory interest is not always claimed or paid in practice, and I agree that it is important to find ways to make the systems work better for suppliers. However, the Bill already strikes the right balance. It strengthens the existing framework by making the right to statutory interest universal, ensuring it cannot be contracted out of, and underpinning it with significantly stronger enforcement and transparency. This signifies a significant advancement, transitioning from a system where the right exists, but remains underutilised, to one where all suppliers are explicitly entitled to it and are supported in its enforcement.

This amendment would go further by introducing rigid and prescriptive requirements that risk undermining the balanced approach. A fixed five-day deadline for the payment of interest does not accurately reflect the practical realities of commercial and accounting practices and processes; it may pose a risk of technical breach to businesses that are otherwise compliant. The proposed definition of payment as an

“unequivocal and unencumbered use of cleared funds”

could lead to legal and operational uncertainties, diverting attention from timely payment to technical disagreements over banking procedures.

Additionally, classifying unpaid interest as new qualifying debt, which then accumulates more interest, risks creating disproportionately large and growing liabilities. The obligation for directors to report instances of non-payment to the Small Business Commissioner would also introduce supplementary administrative burdens, without a distinct enforcement advantage beyond the provisions already established in the Bill.

Taken together, these provisions risk creating complexity and uncertainty, rather than improving payment outcomes in practice. The Bill aims to enhance behaviour by establishing clear rights, enforceability and robust oversight, rather than specifying detailed operational rules in primary legislation. I therefore ask the noble Lord to withdraw his amendment.

[Lord Holmes of Richmond (Con)]

My Lords, I thank my noble friend Lord Sharpe and the Minister for their comments in this short debate. In spite of the Minister’s comments—I particularly appreciate his comments on the five-day period—there is a principle at the heart of this, which is worth exploring between Committee and Report. For now, I beg leave to withdraw the amendment.

Jaguar Land Rover Cyberattack

Debate between Lord Holmes of Richmond and Lord Leong

Wednesday 10th September 2025 Lords Chamber

[Lord Leong (Lab)]

I thank the noble Baroness for that. I am sure that most noble Lords will appreciate that it would not be appropriate for me to comment on any ongoing incidents. However, the Computer Misuse Act continues to enable the prosecution of those who have undertaken unauthorised access to computer systems for a range of malicious reasons including crime and espionage. The Government are in the process of reviewing the Act and the Home Office will provide an update on further proposals once they are finalised. In recent years, the Government’s policy has focused on supporting the insurance industry, to strengthen and grow the commercial cyber insurance market. Pool Reassurance, or Pool Re, was created to ensure the effective functioning of the UK’s terrorism insurance market. The Government do not have any plans to extend Pool Re’s remit to include further cyber-related risks.

[Lord Holmes of Richmond (Con)]

My Lords, the scale, sophistication and sources of cyberattacks are increasing exponentially. To that end, I ask again: when will the Government introduce the cybersecurity and resilience Bill? Will it be this autumn? When that Bill arrives, will it contain provisions for the wholesale reform of the Computer Misuse Act to enable our cyber professionals to do what they do best, which is protect this country and protect us as citizens?

[Lord Leong (Lab)]

My Lords, perhaps the noble Lord did not hear my last answer. Tackling cyberthreats and improving our national cyber defences is a priority for this Government. As I mentioned, when parliamentary time allows, the Government will introduce the cybersecurity and resilience Bill to raise cybersecurity standards in critical infrastructure and essential services such as water, energy and the NHS and, I am told, food security.