Commercial Payments Bill [HL]

Lord Hunt of Wirral Excerpts

2nd reading
Tuesday 9th June 2026 Lords Chamber

[Lord Hunt of Wirral (Con)]

My Lords, I declare my interests as set out in the register, in particular as a partner and practising solicitor at DAC Beachcroft. It is a pleasure to follow the Minister, who not only read from a brief but spoke from his heart. He has a record that anyone should be proud of in building businesses in the past.

The Minister was also very generous in the praise that he extended to the previous Conservative Government. We on these Benches have consistently championed the rights of small businesses. In government, we created a specific duty for contracting authorities to consider small-sized and medium-sized enterprises in competing for contracts. During the pandemic, we directed an additional £69 billion towards support for businesses.

That belief in small business has followed us into Opposition, often in defiance of the Government’s broader approach to industrial policy, so it is welcome to see Ministers taking a step in our direction. For that reason, I say from the outset that we do not oppose the Bill. Tackling poor payment practices will be beneficial not only to small businesses but to the wider economy as a whole.

As the Minister pointed out, an estimated 38 businesses close every day as a result of late payments, costing the country some £11 billion annually. We therefore recognise the need for reforms such as mandatory payment terms and statutory interest payments, both of which should improve cash flow and provide smaller firms with greater certainty.

However, I recognise that there is a small risk that some businesses may be negatively affected by the changes to the late payment rules. Although that is undoubtedly not the Government’s intention, the decision to exempt transactions between large businesses risks creating an incentive for bigger firms to bypass smaller suppliers altogether. I would therefore be grateful if, when the Minister comes to sum up the debate—like him, I look forward to noble Lords’ contributions to this debate from all sides of the House—he could address whether the Government have considered this possibility and what safeguards could be created to guard against such an outcome.

Similarly, in a number of countries where mandatory late payment terms have been introduced, they have in practice tended to become accepted payment dates rather than genuine deadlines. Instead of encouraging prompt settlement, they have occasionally encouraged businesses to delay payment until the final permissible day. I hope that the Minister will address this concern in his reply; I look forward, as he does, to engaging constructively on these matters in Committee.

I also ask the Minister for some clarity on the 60-day payment term. There is often a discrepancy between when a business does a payment run and when the bank actually makes the payment. There are instances where unforeseen delays cause the payment to overrun the 60-day window, after which statutory interest is automatically applied. Can the Minister confirm whether the 60-day deadline ends when the payment is made or when it is received by the supplier? Does the legislation account for delays due to payment runs or payment system delays? Perhaps these points need more clarity in the Bill’s drafting.

We similarly support the abolition of retention sums in construction contracts. We recognise that retention payments are often far smaller than the actual cost of defects, and that they have increasingly become less a form of genuine insurance and more a mechanism for unilaterally transferring risk on to smaller contractors while preserving working capital for larger firms. That does little to improve either quality or productivity in the construction sector.

Despite this, we recognise that, on occasion, retention payments have served as a legitimate, if limited, form of protection against defective work. In the construction industry, where the cost of errors tends to range between 5% and 25% of project value, the importance of ensuring that adequate protection against shortfalls is available is self-evident. Given that the retention option is being removed from construction contracts, can the Minister please explain how the Government intend to ensure that defects in construction projects will still be rectified by those responsible?

I turn for a moment to the changes proposed to the Office of the Small Business Commissioner. Bringing upwards claims into its remit is welcome, as are the new powers to enforce compliance and to distribute fines for non-compliance. The success of these reforms will depend ultimately on resources. Greater powers and greater responsibilities must be accompanied by adequate funding. The former without the latter risks creating backlogs and inefficiency, and ultimately discrediting the important work that the commissioner’s office exists to carry out. I therefore hope that the Minister can assure the House that sufficient resources will accompany these expanded duties.

I also wish to address some broader points concerning the Government’s overall business policy. This Bill is undoubtedly a step in the right direction, but I would describe it as a small step only, because it must be seen in the broader direction of the Government’s overall legislative programme. This is a Bill that rightly seeks to support small businesses in competing fairly with larger firms. It seeks to improve cash flow and to engineer greater and fairer symmetry within the market. These are worthwhile and sensible objectives. It is a great pity that those very principles should be in such obvious contrast with almost every other area of government policy.

Small businesses will welcome this Bill, but it will do little to relieve the broader pressures under which they must currently operate. Industrial electricity costs in the UK remain among the highest in the OECD, driven by a combination of high green levies and continued reliance on intermittent energy generation. The consequence is that large sections of our manufacturing and construction sectors are becoming increasingly uncompetitive and, in some cases, simply unprofitable. At the same time, the minimum wage has continued to rise significantly beyond the rate of inflation, discouraging investment in youth employment and training opportunities. For sectors such as construction, which already endures one of the highest turnover rates in the United Kingdom, this is particularly damaging. Businesses cannot continually absorb rising labour costs while simultaneously facing higher energy prices, increased taxation and ever-growing administrative and regulatory burdens.

I must return to the Employment Rights Act. The Government’s own figures suggest that it will impose over £1 billion in additional administrative costs on businesses. Many of us suspect that this figure may prove to be a significant underestimate. Those costs will inevitably fall most disproportionately on small and micro businesses, which lack the legal resources that are available to larger corporations. When the qualifying period for unfair dismissal is reduced to six months, many small businesses simply will not possess the capacity to manage, or even adequately assess, the additional risks involved in hiring.

Six months was a late and welcome compromise, but it will still make employers think twice and twice again before hiring people. At a time when economic growth remains weak and business confidence fragile, that is deeply concerning. Given the stated intent of this Bill—to help smaller businesses survive—I hope that, over the coming weeks, the Minister will be receptive to measures exempting some of the most vulnerable businesses from further measures within the Employment Rights Act that stand to be triggered by secondary legislation.

While we welcome this attempt to improve market practices and enhance protections for small businesses, without cheaper energy, affordable labour and proportionate employment regulation the effect of these reforms will inevitably be limited. We therefore hope that this Bill marks not merely an isolated intervention but the beginning of a broader change in the Government’s outlook towards the wealth creators in our society, without whom no progress is possible. This legislation is founded on sound principles. I only hope that the same principles will come to guide future policy more generally across the full field of industrial and economic strategy.

Commercial Payments Bill [HL]

Lord Hunt of Wirral Excerpts

Committee stage
Tuesday 21st July 2026 Lords Chamber

[Lord Fox (LD)]

Fortunately, this is a short speech so I can lengthen it by repeating that.

This amendment would confirm on the face of the Bill

“that the Act does not apply to contracts principally for the licence or assignment of copyright or rights in performances, so that royalties, advances and residuals under publishing, music, screen and similar agreements fall outside the late payment regime”

as envisioned by the Bill. Noble Lords will not be surprised to learn that this amendment has been supported by Creative UK, PRS for Music, which is UK Music, and the Publishers Association. It would insert a new clause after Clause 8—which we have now agreed—and seeks to make a clear distinction between contractual remuneration and royalties.

I know that the Minister has been in discussion with the publishing industry and that, given his business background, he is clear on this issue. However, I do not think the Bill is as clear as the Minister is on this, so it would be very helpful for him to set out in detail these distinctions, effectively putting royalties outside the scope of the Bill. I would prefer an agreed amendment to come forward on Report but, at the very least, some clear Pepper v Hart-style assurances need to be made from the Dispatch Box. I beg to move.

[Lord Hunt of Wirral (Con)]

My Lords, we are all very grateful to the noble Lord, Lord Fox, for tabling Amendment 37, which seeks clarity on this important issue. As he explained, this amendment would confirm in the Bill that the Act-to-be

“does not apply to contracts principally for the licence or assignment of copyright or rights in performances, so that royalties, advances and residuals under publishing, music, screen and similar agreements fall outside the late payment regime”.

But it also opens the debate to raise some interesting questions on whether the Bill should be sector-indiscriminate or whether there are certain industries for which regulations regarding late payment must be more bespoke. There may be strong reasons for stipulating that publishing, music and screen agreements fall outside the late payment regime. We look forward to hearing the Minister outline the Government’s position on that specific question.

However, if that is the case, noble Lords must ask two questions: first, whether these reasons could equally apply to other industries that should therefore also be exempted; and, secondly, whether there exist other distinct but legitimate reasons for different industries to be exempted. Even if there are good reasons for exempting certain industries, we must be wary of opening the floodgates such that this late payment regulation loses its practical force. Again, we all look forward to hearing the Minister detail the Government’s stance on this important issue.

[Lord Leong (Lab)]

My Lords, I thank the noble Lord, Lord Fox, for his Amendment 37, and I thank the Publishers Association for meeting with me. I can be very clear and confirm that the Bill does not substantially alter the contracts in scope of the Late Payment of Commercial Debts (Interest) Act 1998. Where this is the case, the protections offered by that Act will apply to a contract, and where they do not, they will not. The Bill does not alter the effect of existing case law in scope of the Late Payment of Commercial Debts (Interest) Act 1998 where it is found that the mere licence of copyright was not within scope.

Performers, authors, musicians and other creators are often freelancers or very small businesses. They may have limited bargaining power and may depend on timely payment for work created, delivered or licensed. During the Government’s consultation, we heard from authors and musicians who were waiting for many months to be paid. That is precisely the kind of poor payment practice that the Bill is designed to address. Where relevant contracts entered into by small businesses, freelancers or individual creators are for the supply of goods and services, the Bill will ensure that payment is made within the statutory maximum period of 60 days from the agreed trigger point.

However, there may be agreements involving intellectual property rights that are not properly characterised as contracts for the supply of goods or services. Some arrangements may concern the assignment, licensing or exploitation of intellectual property in ways that fall outside the late payment framework. The Government’s position is therefore clear: creators and freelancers should be paid on time where their contracts fall within the commercial payments regime.

Amendment 37 risks blurring established distinctions in contract and intellectual property law and would create uncertainty about which agreements are covered. For that reason, while I understand and sympathise with the intention behind this amendment, I do not consider it necessary or appropriate. Consequently, I ask the noble Lord to withdraw Amendment 37.

[Lord Hunt of Wirral (Con)]

Before the Minister sits down, can he address the two questions I raised? Are there other industries that might similarly be affected? If so, how do the Government intend to reach an end conclusion?

[Lord Leong (Lab)]

As far as the Bill is concerned, we are not providing any particular exemption to any particular sector. As far as intellectual property law is concerned, there were concerns from the various trade organisations that the Bill may also include the licensing of copyright. That is not the case, because that has been decided by case law under the earlier legislation I mentioned. If a contract says that someone has been contracted to write a particular book, novel or whatever, then that falls within scope of the Bill, but copyright contracts do not.

--- Later in debate ---

Moved by

[Lord Hunt of Wirral]

55: Clause 18, page 21, line 23, leave out “(but no other type of person)” and insert “or consumer”
Member’s explanatory statement
This amendment, and another in the name of Lord Hunt, is intended to probe the Government’s reasoning for restricting the adjudication scheme solely to disputes involving small businesses as claimants.

[Lord Hunt of Wirral (Con)]

My Lords, we now move to a very important part of the Bill, namely Part 2, on the Small Business Commissioner. I praise all those involved in the build-up to the Enterprise Act 2016. After a lengthy period of consultation, in which I was privileged to participate, the Conservative Government set up the role of the Small Business Commissioner. Its purpose was to tackle overdue payments and unfavourable payment practices. So it is a pleasure to open this debate by moving Amendment 55 and speaking to the others in this group in my name and that of my noble friend, because we now seek to expand the role of the Small Business Commissioner. I am pleased to start by saying that His Majesty’s Opposition support these changes. Our many amendments to this group are simply to clarify or build on the Government’s already solid proposals.

Amendments 55 to 57 probe the reasoning behind limiting the scope of the commissioner’s powers to disputes between small and larger businesses. I understand the argument that small businesses or consumers are more likely to be bankrupted by dispute proceedings, but the same cannot be said of small businesses on the receiving end of poor payment practices. I wonder whether the Minister can outline the rationale for expanding the commissioner’s powers to include these size-adjacent disputes.

Amendments 64 and 65 probe what additional grounds may be included in the reasons for declining to adjudicate disputes and which additional disputes may be exempted from adjudication. These powers have the potential to be used both widely and arbitrarily, which is why we have tabled Amendment 72, which would require both Houses of Parliament to approve any new regulations. In general, if the Minister could anticipate what these powers might be used for, I think we would all find that extremely helpful.

Similarly, Amendment 62 from my noble friend Lord Leigh of Hurley would require a reason to be given for declining to adjudicate a dispute. I think this is a courteous, low-cost measure that would do much to increase the transparency of the commissioner’s office.

Amendment 71 in my name and Amendment 59 in the name of the noble Lord, Lord Fox, aim to set a timeline for resolving disputes. I am conscious that the cases brought to the commissioner may differ greatly, both in scope and resolution and in the amount of time required. As such, I am aware that any timeline could create a bottleneck. That being said, I believe that some expectation should be placed on the commissioner’s office to resolve disputes in a timely manner. So, if the Minister cannot agree with either of these terms, I hope he will be able at least to suggest another solution in his response.

I also consider Amendment 75, tabled by my noble friend Lord Leigh, to be very important. Currently, under the Bill, a larger business may be investigated should it persistently engage in poor payment practices, with “persistently” being defined as an equally vague “sufficient” number of times. Businesses deserve to know what this means, if for no other reason than so that they can avoid it. Discretion should not be introduced where it does not need to be, so I hope the Minister can put a number on what exactly constitutes “persistently”.

However, these amendments are ultimately fruitless if they are not taken in conjunction with Amendments 69 and 93. The amendments in this group aim to increase the efficiency and transparency of the Small Business Commissioner’s office, which is now rightly having its powers greatly expanded—though the funds and resources the office will receive to carry them out remain very vague and opaque, so we seek more clarity from the Minister. Last year, the Small Business Commissioner had a net operating expenditure of just under £1.1 million. It was not allowed to hire permanent staff members and handled a total of 591 inquiries—not disputes.

It is not good enough for the Minister to say that extra resources will still be available, as he did at Second Reading, but not to give any further details. The time has come when we need to have a very clear steer on exactly what this budget will include and amount to. This is a root and branch reform that will not just completely change the nature of the commissioner’s office but have ramifications for businesses up and down the country. It must have a clear funding plan laid out. That is why we support Amendment 93 from the noble Lord, Lord Fox. It would ensure that the commissioner’s new functions would not be commenced until a funding plan has been laid before and debated by Parliament. This is the bare minimum, surely, for a reform of this kind.

Both the commissioner’s office and the businesses that will rely on it need to know that they will be adequately provided for. One cannot instil institutional trust in a reform if it appears that it is being underfunded. I hope the Minister can now commit to a funding plan. If there is no clear plan, neither I nor the noble Lord, Lord Fox, will be satisfied and we will return to the matter on Report. The Minister has a real opportunity now to answer all these questions; let us get ahead with this very important reform. I beg to move.

[Lord Fox (LD)]

My Lords, it is a real pleasure to follow the noble Lord, Lord Hunt, given his continued involvement with the Small Business Commissioner. There are a lot of amendments in this group. In order not to overstay my welcome, I will not speak to his amendments—but I am broadly in agreement with everything he has just said.

I have a number of amendments in this group. Amendment 59 would require payment disputes referred to the adjudication scheme to be resolved within 60 days, unless the Small Business Commissioner considers a longer period reasonable. The Bill creates a 60-day limit by which private organisations must pay back small businesses. However, although in the case of a dispute there is a time limit for the dispute to be raised, there is no time limit for the case to be resolved. This means that large companies could in effect raise a dispute and delay resolution, putting pressure on the SMEs to settle.

As can be seen from the amendment, it calls for the adjudicator to

“reach a decision determining a relevant payment dispute before the end of the period of 60 days beginning with the day on which the dispute is referred to adjudication under the scheme”.

To facilitate this, the adjudicator must

“compel parties to share relevant information with itself, if the sharing of such information is necessary for the fulfilment of the duty”.

However, where necessary, the commissioner may extend the period to resolve a particular issue, having regard to the complexity of a dispute and the conduct of the parties. The commissioner must set out reasons for any extension. This amendment addresses this, and it is an issue to which we attach quite a lot of importance.

As the noble Lord, Lord Hunt, just said, Amendment 71 looks at a 28-day limit. Separately, Amendment 79 in the name of the noble Lord, Lord Holmes, looks at 12 months for an investigation. That is a very long time, but I look forward to what he has to say.

--- Later in debate ---

[Lord Leong (Lab)]

As I said earlier, we need to have further conversations on that, which I would welcome.

[Lord Hunt of Wirral (Con)]

My Lords, I thank all noble Lords for taking part in what has been a very important debate. I am grateful to the Minister for his response. I warmly applaud what the noble Lord, Lord Fox, said about the critical need for clarity—as my noble friend Lord Holmes of Richmond emphasised, not just clarity but precision. We believe that these elements are essential, particularly on resources. It is all well and good passing legislation—ground-breaking legislation, to some extent—but, if there are no resources behind that change in legislative structures, the ultimate objective will not be achieved.

Speaking on behalf of all those who have spoken, I believe that it is the intention of all of us that the expanded Small Business Commissioner’s office should work as the Government intend it to work. The amendments in this group simply represent different views on how best to achieve this. I warmly applaud my noble friend Lord Leigh of Hurley, who always gives us the correct feedback from the world of business. He did so again just a few moments ago. His remarks about giving the cold shoulder have been proved with the effectiveness of the takeover code. We have to isolate—perhaps we have not had enough discussion about this—those companies that have poor payment practices and get through to them that, across all parties, we condemn such action, in particular when it has such a dramatic impact on small and medium-sized enterprises.

I understand that the amendments in the name of the noble Lord, Lord Fox, would include overseas turnover when calculating a company’s turnover. We need to discuss that further. We need to get UK tax law right.

[Lord Fox (LD)]

Simple—have a flat tax.

[Lord Hunt of Wirral (Con)]

Anyway, that is a debate for another occasion.

The Committee has made it clear that we support the prohibition of new regulations without what they might be used for being outlined or without them being approved by both Houses of Parliament. I have also set out our position on the timeline for the adjudication of disputes. It is an argument that I believe has some merit and would benefit from at least some guidance from the Minister, but I warmly applaud the consensus across the Committee that the question of funding must be answered before the Bill passes. As I outlined at the start of this debate, businesses must be able to trust the office for it to function as intended, and trust includes knowing that it has the means to deal with the disputes with which it has been tasked by this legislation. I understand that the Minister cannot commit today to a set amount or a timeline, but I hope that, over the summer, he and his officials will come to a solution on this issue—perhaps with the support of a rejuvenated Treasury.

I look forward to revisiting this debate. On behalf of all those who are interested, I accept the Minister’s offer of a meeting with the Small Business Commissioner and her team, which I think would greatly enhance our ability to understand some of the issues involved. In the meantime, I beg leave to withdraw my amendment.

Amendment 55 withdrawn.

--- Later in debate ---

[Lord Leong (Lab)]

Declare yourself.

[Lord Hunt of Wirral (Con)]

As the Minister has just suggested, I should declare my interest as a practising solicitor in the City of London. I acknowledge the words of the former Lord Chief Justice, the noble and learned Lord, Lord Thomas of Cwmgiedd. We do need access to justice; I just happen to believe that it is best achieved by using lawyers. But I recognise the validity of what he just said and we need to reflect on that, just as we need to reflect on what was said by my noble friend Lord Holmes of Richmond on using plain English that people can understand.

In trying to create another dispute resolution system, as we discovered with the Financial Ombudsman Service—the noble Baroness, Lady Kramer, will know this from sitting in on the debates on the Financial Services and Markets Bill—allowing the Financial Ombudsman to decide what is fair and reasonable in all the circumstances, and not to have to rely on the common law, creates a difficult adjudicatory system. At the end of the day, we want right to succeed, and it can do so only if everyone understands what the law is and it is not left to the discretion of some intermediary.

Having now pleaded the case for the lawyers, I thank my noble friend Lord Leigh of Hurley for introducing what has been a very important debate. I acknowledge the fight of the noble Baroness, Lady Kramer, for the Cabinet Office to take a role in any whistleblowing regime. I hope she will understand that I am nervous about establishing another office within the Office of the Small Business Commissioner, but we look forward to hearing what the Minister says about that.

Amendments 86 and 87 are in my name and those of my noble friends Lord Sharpe of Epsom and Lord Holmes of Richmond. The Bill represents a shift in the Government’s policy, in that it favours small and medium-sized businesses. Payment terms and retention contracts will do much to prevent exploitative counterparts, while increasing the powers of the Small Business Commissioner will introduce another layer of protection.

However, I call it a “shift” because it is antithetical to the road that the Government have pursued until now, which has placed businesses, both small and large, under ever more regulatory and financial burdens. I am of course referring to the Employment Rights Act of last year. It seems unfair that businesses should be expected to comply with new payment practices that reduce cash-flow flexibility while the Government are simultaneously doing the same with their policies. The worst provisions of that Act have not even been implemented yet but are expected to cost an additional £1,000 million at a minimum. This will undoubtedly have an impact on the ability of businesses, especially smaller businesses with tighter margins, to pay back the debt that they owe within the allotted time.

--- Later in debate ---

[Lord Fox (LD)]

My Lords, these amendments are very much of the style that I had expected, knowing that the noble Lord, Lord Holmes, was involved in the Bill, and he certainly made his arguments. To some extent I think there is a mixed thing here, with some of it mandating tools that the SBC could or should use. I do not think we need primary legislation to mandate that at all. I think the point that the noble and learned Lord made on Amendment 78 was slightly different from the one that the noble Lord, Lord Holmes, made. I may have misunderstood. But it is very important to know where AI is being used for decision-making and resolution. I think that was the point that the noble and learned Lord was making, and there I have complete agreement.

The use of distributed ledger is probably a very good idea. Do we need primary legislation to make or advise the SBC to use it? I am not sure. There is a mixed bag here, but the important element is that technology will change how the commissioner will approach her job and she needs to be financially and technically resourced in order to be able to address those changes and, I hope, to be one step ahead of them.

[Lord Hunt of Wirral (Con)]

We are all very grateful to my noble friend Lord Holmes of Richmond, not only for his amendments in this group but for his wise words. I also commend the noble and learned Lord, Lord Thomas of Cwmgiedd, and the noble Lord, Lord Fox, on their points.

Amendment 73 would require the Small Business Commissioner

“to provide a plain-language digital pathway into the SBC adjudication scheme, including an eligibility checker, interest calculator, and guided referral process”.

I believe there is a lot of common sense behind this amendment, and I suppose I declare an interest having been UK chair of the English-Speaking Union and global chair for a number of years. Placing a statutory duty on the commissioner to provide a digital service would ensure that small businesses could more easily get the essential and relevant information about the scheme. The inclusion of a plain language eligibility checker would mean that small businesses could determine whether they are entitled to refer a relevant payment dispute to the scheme. This would not only benefit the taxpayer, as time and expense will not have to be expended sifting through ineligible applications, but would also benefit small businesses that may otherwise have to spend money on legal fees and advice.

Amendment 78 would establish

“an algorithmic accountability framework for any AI or automated tool used by the Commissioner. It requires transparency, regular bias audits, human oversight, and a right of explanation for businesses selected for investigation”.

There is clear reasoning behind this amendment. If a business is put under investigation, it should be entitled, upon request, to understand the factors that led to the initial decision to investigate. Not only will this provide transparency and act as a safeguard against particular businesses being targeted, it will mean that businesses are able to reflect on their existing practices and amend them as necessary.

I turn to what my noble friend described as one of the most important amendments, Amendment 92, as well as Amendment 94. Amendment 92 would require the Secretary of State

“to commission an AI-assisted payment monitoring tool for the Small Business Commissioner”.

Amendment 94 would require the Secretary of State

“to establish an open, machine-readable register of payment practice reports”.

Both these amendments rest on the principles that technology and data, when used in a constructive way, can yield more effective and efficient outcomes. An AI-assisted payment monitoring tool could be used by the Small Business Commissioner to cross-reference data that companies are required to publish with other government databases to identify businesses whose reported payment performance is incompatible with other available financial and legal data. Such a tool would provide the commissioner with more accurate and robust data, which could be considered before the launching of a potential investigation.

Similarly, an open payment data register would enable analysis by sector, business size and payment performance over time. If this register were publicly accessible and machine readable, third parties would also have the ability to deploy their own large language models to gain insights into the sector, as well as potential businesses that must be referred for investigation. Crucially, by making the register public, large businesses may be further incentivised to ensure that they are complying with existing payment practices and regulations. I look forward to the Minister’s response on these matters.

Amendment 95 would require

“a pilot of distributed ledger technology for construction retention records during the transition period”,

while Amendment 96 would require

“post-quantum cryptographic standards for all digital infrastructure supporting the Commissioner’s functions”.

These are technical amendments which require careful consideration.

In the absence of a clear cyber strategy, which the Government have promised would be released—they have promised it again and again—it remains unclear how the digital infrastructure supporting the commissioner’s functions remains shielded from cyber threats. I hope that the Minister will be able to inform us all of when such a strategy will be published.

--- Later in debate ---

Moved by

[Lord Hunt of Wirral]

103: Clause 31, page 41, line 34, at end insert—
“(2A) Section 4 comes into force on the day after the last day of the period of 12 months beginning with the day on which this Act is passed.”Member’s explanatory statement
This amendment seeks to provide a one year transitional period before statutory interest payments come into force, so as to allow businesses to implement the underpinning technology and deal with the incoming regulation.

[Lord Hunt of Wirral (Con)]

My Lords, Amendment 103 would delay commencement of the statutory interest provisions by one year to allow businesses time to prepare. As we are on the final group of the day, I will seek to keep my remarks brief.

My noble friend Lord Holmes of Richmond made the point with Amendment 24 that statutory interest should be calculated and remitted promptly, within five days, which is a sentiment that we agree with, but that amendment also highlights that businesses will need to take on new administrative burdens to carry out this new duty. Obviously, we want to encourage people to pay on time, but businesses who have previously had payment terms of 90 or 120 days will need time to adapt. That is why Amendment 103, in the names also of my noble friends Lord Sharpe of Epsom and Lord Holmes of Richmond, would delay the commencement of statutory interest by a year. It acknowledges that underpinning technology will likely be necessary, especially for large multinationals with immensely complex payment systems. I hope that the Minister will be able to agree. I beg to move.

[Lord Leong (Lab)]

First, I thank the noble Lords, Lord Hunt and Lord Sharpe, for this amendment and the noble Lord, Lord Hunt, for his contribution. The Bill will strengthen an existing right that suppliers who are paid interest late enjoy, through Clauses 5 and 6. These clauses will simplify the law on when statutory interest runs and remove the ability for contracts to use an alternative remedy to statutory interest. Clause 4, which this amendment relates to, preserves the effect of Section 1 of the existing Commercial Payments and Interest on Late Payment Act 1998 and implies statutory interest into all contracts to which the Act applies. The amendment brought forward by the noble Lord to require Clause 4 to be commenced within 12 months would not delay the right to statutory interest, as it is already in legislation. I can reassure him that we have considered the impact that strengthening of interest rights will have, as set out in Clauses 5 and 6, and that there will be sufficient time for businesses to adapt their processes before these provisions are commenced. I hope I have reassured the noble Lord and that he will withdraw his amendment.

--- Later in debate ---

[Lord Hunt of Wirral (Con)]

My Lords, perhaps I may take this opportunity of thanking the Minister for the way he has approached the Bill. He has certainly given us all an opportunity to scrutinise it line by line, but he has also made a number of offers, which we have accepted, of further meetings, which we hope will take place as soon as possible—perhaps giving a little time for a short recess. I commend his approach, which is an example to all his colleagues, and I thank him for his reply on this amendment. The Bill has to be able to balance encouraging good payment practice alongside regulatory burdens. Statutory interest achieves the former yet has the potential to increase the latter. I hope that when we come to Report, the Minister will be able to bring forward a solution that addresses this issue, but until then, I beg leave to withdraw my amendment.

Amendment 103 withdrawn.