Commercial Payments Bill [HL]

Baroness Goudie Excerpts

2nd reading
Tuesday 9th June 2026 Lords Chamber

[Baroness Goudie (Lab)]

My Lords, I welcome this Bill. I welcome that there is great support for it across the House and that we can get it through and help everybody else to make Britain a much better and more welcoming place.

I am pleased to speak in support of this Bill. It addresses a practical problem that has very serious consequences. For small businesses, timely and reliable cash flow predicts many serious matters: whether wages can be paid, whether rent can be met, whether investment into a company can be made and, at the end of the day, whether a viable company can survive.

The economy of the United Kingdom is built on small and medium-sized enterprises. At the start of 2025, SMEs made up 99.9% of the 5.7 million private sector businesses and accounted for 60% of employment and 51% of turnover. Therefore, a conversation focusing on supporting SMEs is really a conversation that is focused on improving the quality of our economy as a whole. Additionally, we know that, when we talk about SMEs, we are also talking about the jobs, families and local high streets that are attached to every single enterprise.

This Bill goes to the heart of our economy by improving business conditions for these vital companies. Approximately 44% of invoices from SMEs are paid late. Those very late payments are estimated to cost the UK economy almost £11 billion each year, forcing 14,000 businesses to close annually because of late payment. Every single closure represents a person who has taken a risk and who has often employed others and created work for their community.

I particularly welcome the Government’s recognition that payment culture matters. A small business should not have to act as an unofficial bank for the larger customer, and nor should entrepreneurs spend precious time chasing money that is already owed to them when that time could be spent growing their business, training staff, improving services or winning new contracts.

Much has already been said in this House about construction. I welcome the Bill’s attention to that issue. However, I wish to focus on small businesses and women’s role in the SME sector. For women who are building businesses, working as sole traders, employing local people and supporting their families, reliable payment is central to confidence, independence and growth. Women-led businesses can face particular barriers in accessing finance. The Government are trying to make this easier by talking to the banks, but we need more support networks and investment. When payment is delayed through no fault of their own, these barriers become harder still. A late invoice can mean postponed childcare, delayed wages, additional borrowing or the loss of confidence to take on the next contract. If we want more women to start and scale businesses, fair and prompt payment must be part of that ambition.

I welcome the Bill’s provisions to strengthen maximum payment terms, to make interest on late payments more effective and to give the Small Business Commissioner stronger powers. I hope that, as the Bill progresses and once it is implemented, Ministers will keep under close review whether the overall timetable for acceptance, verification and payment is sufficiently ambitious for the smallest firms. It is really important that we have some clause allowing us to look at this after a year or so. In practice, a period approaching 90 days can still feel very long for a small supplier managing a tight cash flow.

I hope that the strengthened Small Business Commissioner will be visible, accessible and trusted by the smallest firms—including sole traders and women-led businesses that may not have legal teams or finance departments behind them. This is a welcome Bill. It is pro-business, pro-growth and pro-fairness. Most importantly, it seeks to change not only the rules but the culture. I look forward to supporting the Government in that endeavour and to ensuring that small businesses, entrepreneurs and women-led enterprises are at the heart of its success.