A Bill progresses at pace through Parliament
It may have been all change on the political front this week but my Office has been focused on its mission to make life easier for small firms by getting money moving. A key plank of this work is introduction of the Commercial Payments Bill which will position the UK with maximum 60-day payment terms, apply automatic interest to late payment, and give new powers to the Small Business Commissioner. The Bill made its next step by going to Committee Stage. In this post, I share journey of the Bill to date and introduce you to terminology that I have had to learn, and hope will interest you!
It starts with consultation
Before introducing a new law, government must first consult on proposed measures and ask the market to alert it to any unintended consequences. This was carried out from July to October 2025 and, in the case of the Commercial Payments Bill, government consulted on nine measures which you can see here. Thanks again to all those who submitted responses.
Government intent
On 24th March this year, government responded to the consultation with an intent to move forward with all nine measures. I’m told this is unusual as consultation periods can lead to proposals being amended or aspects not taken forward following feedback from stakeholders but in this case the measures proposed were greeted well by businesses (large and small), with strict exemptions introduced to take into account views heard at consultation stage from groups such as retailers who import, and booksellers who pay when books are sold.
The King’s Speech
The measures were written up in the form of a draft Bill – now known as the Commercial Payments Bill, which we were delighted to see included in The King’s Speech in May. The King’s Speech covers the laws that the government of the day would like to take forward in the next Parliament.
Introduction to the House
A lead Lord was appointed to manage the Bill’s ‘passage through Parliament’ in the form of the excellent Lord Leong, a former businessman who understands the need for prompt payment. Lord Leong introduced the Bill to the House of Lords on 19th May 2026 in what is referred to as the First Reading. I have come to learn that Bills can start in either House of Lords or House of Commons and they move between each House as points of the proposed new laws are debated.
Second reading
Just a couple of weeks later the Bill moved to its second reading which is when the debate begins and members of the Lords offer their reaction. Following this debate, amendments to the Bill are ‘tabled’ which is an intense and busy time for the team, made up of lawyers and prompt payment policy officials, as amendments come in overnight and have to be rapidly addressed. A total of 103 amendments were received, ranging from questions on resource requirements for the Office of the Small Business Commissioner to the definition of a small firm for the purposes of adjudication.
Committee Stage
This is the point we have reached this week and is when government responds to the amendments raised. You can watch the full proceedings here with Commercial Payments Bill starting at 17.17 and running for circa 4 hours 🙂
What next?
The next phase is referred to as ‘Report stage’ and sees the Bill updated with any agreed amendments. This Bill is then presented to the House of Commons to take through that Chamber, which will hopefully happen in October.
The ideal is for the Bill to have made its passage through both Houses by end of this year/early 2027 when it receives what is referred to as Royal Assent, meaning HM The King signs off on the primary legislation and it becomes an Act.
At that point the process moves into what’s called ‘secondary legislation’ which will go into further detail on how the law will be implemented. This usually takes 3-4 months before the journey reaches its end point and the Act comes into effect.
Throughout, we are working to ensure firms of all sizes will be ready. For small businesses, to know your rights, and for large firms to ready for compliance. I will continue to offer updates through this weekly newsletter – hope you find it helpful.
Emma