Late Payments
Thursday, 15 October 2026
Contributions
Cat Eccles (Stourbridge) (Lab)Labour
7. What steps his Department is taking to help tackle late payments to small businesses.
The Parliamentary Under-Secretary of State for Business, Innovation, Science and Trade (Blair McDougall)Labour
The Government are determined to tackle the scourge of late payments, which causes the closure of 14,000 businesses and costs the UK economy almost £11 billion a year. The Commercial Payments Bill currently progressing through Parliament will give the UK the strongest laws in the G7 and represents the most significant reform of payment practices in over 25 years. The Bill will ensure that small businesses spend more time on growing, investing and creating jobs and less time on chasing late payments.
Late payment destroys thousands of viable small firms each year, and poor practices have seen large firms using small suppliers as a free overdraft. In my constituency, the impact is felt by manufacturers and fabricators, with local metalwork and transport supply sectors facing the longest payment delays in the UK. How is the Minister ensuring that there is a change in payment culture and lifting that burden from small businesses?
My hon. Friend is absolutely right; I know from personal experience how frustrating it is to have large firms use small firms as a source of free finance. The Commercial Payments Bill will clamp down on late payments by introducing maximum payment terms, providing stronger rights to interest and strengthening the powers of the Small Business Commissioner. She is right about the need for a culture change. The message from Government is that this legislation and this change is coming, and large companies should get their payment practices in order right now.
Jim Shannon (Strangford) (DUP)Democratic Unionist Party
Rising business rates, wages going up, energy prices rising, national insurance contributions—all those things have an impact on small businesses. My small businesses talk to me about the very issue that the hon. Lady referred to: those who do not pay on time. What can be done to help firms who are not getting the money from the suppliers? Is there somewhere that they can refer to for help?
The hon. Gentleman is right to raise the issue. I know it is a huge problem in Northern Ireland, as it is in the rest of the UK. One of the great problems with the current system is that a small business has to be aggressive towards its own customers to chase those late payments. The Commercial Payments Bill will turn that power relationship on its head, and people will expect to be paid on time. If they are not, there will be mandatory interest on that.
Source: UK Parliament Hansard API. Debate ID: 5417805.