Employment Rights Bill (Twelfth sitting)

(Limited Text - Ministerial Extracts only)

Committee stage
Thursday 12th December 2024 Public Bill Committees

[Sir Ashley Fox (Bridgwater) (Con)]

It is a pleasure to see you in the Chair again, Ms Vaz. My hon. Friend the Member for Mid Buckinghamshire has explained that this is a probing amendment to find out the Government’s intentions, but I put it to the Minister and Labour Members that each of the Government’s proposals seems to be based on the premise that we need to legislate against the worst possible outcome.

The hon. Member for Worsley and Eccles referred to P&O, and that was in fact a scandal. But the problem with this approach, of course, is that a regulatory burden is imposed on each and every other employer, and the labour market is made less flexible and employing people is made more expensive. Therefore, every time the Government see a problem with one employer and say, “We have to regulate for everyone,” the whole labour market is made more expensive and less attractive to foreign investors—less like Britain and more like France. As we look across the channel, we see a country with a similar-sized economy, but an unemployment rate approximately double our own.

Combine that, for example, with the proposal on unfair dismissal, and employers could be less likely to employ that marginal worker. In this case, as Matthew Percival from the CBI said, it becomes more attractive, perhaps, for employers to make their workers redundant than to try to renegotiate terms and conditions.

I ask the Minister to consider the cumulative effect of each and every one of his proposals. It is easy for him to stand up and say, “This proposal on its own is modest and reasonable and good,” but the whole Bill will add £5 billion of costs to industry, and the majority of that falls on small and medium-sized enterprises. My fear is that the Minister, through the very best of intentions, will end up with unemployment higher at the end of this Parliament than when he started.

[The Parliamentary Under-Secretary of State for Business and Trade (Justin Madders)]

It is a pleasure to see you in the Chair this afternoon, Ms Vaz. For the benefit of the Committee, I again refer to my entry in the Register of Members’ Financial Interests and my membership of the Unite and GMB trade unions.

It has been an interesting debate. I think we are on the opposite end of the spectrum from where we were in the earlier debate about where the balance lies with our measures to end fire and rehire. I think that the fact that we have two arguments from other ends of the spectrum suggests that we are in about the right place—but if the shadow Minister expects us to believe that cows queue up to be milked in the morning, I just say to him: pull the other one!

[Sir Ashley Fox]

They get worse.

--- Later in debate ---

[Justin Madders]

Yes, they do get worse—it is Thursday afternoon.

The shadow Minister did raise some important points, though. He gave the example of a dairy and its changing practices. Of course, a change in job function does not necessarily mean that terms and conditions have to change or indeed become worse. History is full of examples where technology has come in and made jobs different. As we look forward to the advent of automation and AI in our economy, I hope that people find new jobs and new roles and that those jobs are more fulfilling as a result of technological development.

I will say a few words about the comments from the hon. Member for Bridgwater. We are talking about overall impacts in this Bill of 0.4% of employers’ total costs—a very small price to pay for a comprehensive set of reforms that really are needed for workers. It is about rooting out bad practices and making sure that those bad employers, who we all rightly condemn, are not able to exploit existing loopholes. It is about stopping the race to the bottom. It is about creating a level playing field. One reason why P&O said that it took the action that it did was that its competitors were undercutting it. We do not want to see that race to the bottom continue. We want to see good employers rewarded for respecting and rewarding their employees well by being able to compete on a level playing field.

The general thrust of the shadow Minister’s remarks was interesting. There is nothing to stop an employee agreeing to changes to terms and conditions. Indeed, proposed new section 104I(2)(b) of the Employment Rights Act 1996 makes it clear that these provisions will not apply if the employee agrees to the changes. Changes and discussions happen every day of the week in industry—that is called negotiation, and that is what good industrial relations looks like. That is the sort of thing that we want to encourage.

We are trying to stop a situation that we have seen far too often, where an employer might just say, “Well, here are your new terms and conditions. If you don’t like it, there’s the door.” That, I am afraid, has become far too prevalent in our country. We have heard plenty of evidence about how many employers have been doing that. It is about recognising that there is a loophole in the law. This may be a probing amendment, but it would certainly make this clause ineffective, and arguably, it would make the situation worse than the status quo, because it would effectively legitimise some of those actions by employers. They could point to this legislation and say, “Well, the law says that we are able to do it.”

The way the amendment worded is quite broad. There is a reference to “outdated” terms and conditions. My hon. Friend the Member for Birmingham Northfield gave a good example of where reasonable dialogue between the trade union and the employer would see that change. The shadow Minister’s old colleague, Jacob Rees-Mogg, might have a different view about what “outdated” means. He might think anything after 1874 could be considered modern—[Interruption.] He probably does, yes. There would be very broad latitude for an employer to say that something was outdated. That is why I am concerned that the amendment would make things worse than they are now.

The Bill as drafted makes it very clear what the obligations of a responsible employer are. They are the sort of things that responsible employers do already. We recognise that there will be unfortunate situations in which an employer has no alternative but to change terms and conditions, but the Bill makes sure that, if there is a positive for the employees—there often is from a change in terms of conditions; that is what negotiations often involve—there is a way for that to continue. We are not going to stop that. If employees consent to changes, they will be able to be made under this Bill. I urge the shadow Minister not to press the amendment to a vote.

[Greg Smith]

I understand the argument that the Minister has set out, and I appreciate that this particular probing amendment was at the extremer end of the spectrum in trying to probe that response from him. I accept that there are many mechanisms whereby employees can consensually work with their employer to change contracts, and that is clear. I am still a little nervous—the proof of the pudding will be in the eating, as the Bill progresses and no doubt becomes legislation—about the nightmare scenario of businesses simply saying, “Rather than trying to engage in this process, as we were warned by the CBI, we will just make everyone redundant instead.”

There needs to be a clear, previously set out mechanism from the Government so that, if that disaster-zone eventuality comes to pass—I hope I am wrong; I do not want to see people being made redundant—there is a quick snapback or sort of provision to allow secondary legislation to throttle those measures down, or to fix them in some other way that still stops the exploitative practices without tying businesses’ hands behind their backs, because the net result will be job losses. I would be incredibly disappointed and sad if these issues, which both the Opposition and businesses have warned about throughout the passage of the Bill so far, became a job killer. The Government need to be ready, if they have got it wrong, to have a process that will give businesses the confidence again to properly engage in negotiations, such as those good industrial relations that the Minister spoke of, and not just make people redundant. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

[Justin Madders]

We are back on fire and rehire again; I should probably count up how many times I have spoken in debates on this issue in the last few years. It has taken a lot of parliamentary time, and rightly so. We all remember the obloquy directed towards P&O when it took those actions, several years ago, and I am afraid that fire and rehire has become far more prevalent in our economy than anyone would want to see.

Investigations by the Trades Union Congress found that around 38,000 employers were using fire and rehire as a tactic. Research from the Chartered Institute for Personnel and Development found that, between August 2021 and 2023, the proportion of firms that had used fire and rehire had almost doubled. The impact assessment estimates that there are around 178,000 workers facing the threat of fire and rehire at this very moment, so the problem is not going away—indeed, because of the way that P&O has been allowed to get away with it, employers see it as a golden opportunity to take a sword to hard-fought terms and conditions.

Other Members have spoken about the household names that have attempted to do that, and USDAW’s written evidence included some notable household names. Once upon a time, fire and rehire was a seldom-used part of the employment law and industrial relations landscape but, as part of the wider pattern of insecurity at work, it has become a much more common tool. I am afraid, as we have seen, it is far too often an act of first—rather than last—resort, and the Government are committed to ending that practice.

The solution to dealing with many of the concerns raised by the shadow Minister and others is to point to what good and bad industrial relations look like, and to say, “This is what bad employer practice looks like.” Good employers and industrial relations will take workers with them. Again I refer to USDAW’s written evidence, which noted occasions where negotiations had begun with fire and rehire on the table almost from the start. That is not a healthy place to have sometimes very difficult discussions about changes to terms and conditions. The impact assessment notes that the power asymmetry can provide incentives for the more powerful party, in this case the employer, to act in a strategic manner to suppress wages and conditions. Such tactics are why we have seen such a slump in wage growth over recent years.

--- Later in debate ---

[Steve Darling (Torbay) (LD)]

Fire and rehire is an absolute scourge to those people who are impacted by it. Whether in significant numbers or a minority, it is utterly shameful. My Liberal Democrat colleagues broadly welcome the amendments, and we look forward to supporting the clause.

[Justin Madders]

It is good to hear that we have the support of the Liberal Democrats. Most of the country supports this measure; fire and rehire is rightly seen as a practice that should see its end. I quote the former right hon. Member for Welwyn Hatfield, Grant Shapps, who said at the time, when P&O first started on that course, that

“we will not allow this to happen again: that where new laws are needed, we will create them, that where legal loopholes are cynically exploited, we will close them, and that where employment rights are too weak, we will strengthen them.”—[Official Report, 30 March 2022; Vol. 711, c. 840.]

I have news for the Committee: I am afraid that only this week several Members of this place have told me about fire and rehire tactics going on in their constituency. A fire and rehire situation is taking place right now in Wrexham. The loopholes have not been closed. That is why we need to act.

To put the shadow Minister’s mind at rest, I believe that proposed new subsection (5) gives employers a real guideline as to how they need to deal with this. Furthermore, as was common to much of the evidence we heard, responsible and good employers do all those things anyway, so they will not be penalised or face any additional burdens, but rather will be able to operate on a level playing field.

To refer to the evidence given by DFDS about this particular matter, or to someone working in an area very relevant to it, they said that they were pleased that fire and rehire was going to be dealt with, because as an operator, they are

“simply looking for a fair and level playing field.”––[Official Report, Employment Rights Public Bill Committee, 26 November 2024; c. 56, Q54.]

That is why we need to act today.

I also refer to the support of the Institute of Directors; approximately two thirds of its members who were polled supported this action, too. I think it will come to be seen as a watershed moment in industrial relations in this country, where we finally got rid of one of the most obnoxious and outdated practices that this country has ever seen.

Question put and agreed to.

Clause 22 accordingly ordered to stand part of the Bill.

Clause 23

Collective redundancy: extended application of requirements

[Justin Madders]

I beg to move amendment 58, in clause 23, page 34, line 27, at end insert—

“(3A) In section 197 (power to vary provisions), in subsection (1)—

(a) in paragraph (a), for “188(2)” substitute “188(1A)”;

(b) in the words after paragraph (b), for “188(2)” substitute “188(1A)”.”

This amendment would correct incorrect cross-references in section 197 of the Trade Union and Labour Relations (Consolidation) Act 1992.

This is a purely technical amendment to fix an incorrect cross-reference in section 197(1)(a) of the Trade Union and Labour Relations (Consolidation) Act 1992. Section 197(1)(a) provides that the Secretary of State may make secondary legislation to amend the minimum time period for collective consultations in section 188(2) of the same Act. However, as I am sure the shadow Minister had already noticed, that reference is incorrect: “section 188(2)” should read “section 188(1A)”. A consequential amendment was missed when section 188 was amended by the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 1995. That instrument renumbered section 188(2) as section 188(1A). Of course, it should have also made a consequential amendment to section 197(1)(a), but did not.

The amendment will not change the law, which can already be interpreted to refer to the correct cross-reference by way of the Interpretation Act 1978. The 1978 Act provides that where an instrument repeals and re-enacts a provision then, unless the contrary intention appears, any reference in any other enactment to the repealed provision is to be read as a reference to the re-enacted provision. The amendment will improve the clarity and accessibility of the law, which I am sure we will all be relieved to hear.

[Greg Smith]

I can be very brief on this amendment, Ms Vaz; in fact, I will channel the questioning style of my right hon. Friend the Member for New Forest West (Sir Desmond Swayne). This is what happens when a Bill gets rushed to meet an arbitrary political deadline, is it not?

[Justin Madders]

The shadow Minister will be pleased to hear that we have picked the error up at this stage, so that when the Bill is enacted it will of course be absolutely correct.

Amendment 58 agreed to.

Question proposed, That the clause, as amended, stand part of the Bill.

[Justin Madders]

Employers are currently obliged to collectively consult when they propose to make 20 or more employees redundant at one establishment. Collective consultations are an important part of ensuring fairness and transparency between employers and employees.

In the year to November 2024, approximately 3,500 employers in Great Britain gave notification that they were initiating a collective redundancy process at a single establishment. The benefits of consultation are felt by both employees and employers. Consultation ensures that affected employees can input into the process with a view to avoiding or mitigating redundancies wherever possible, and it helps employers to retain skilled workers and reduce the risk of disputes.

That is why the Government intend to strengthen the collective redundancy framework. The clause will amend the framework to ensure that employers must fulfil collective consultation obligations whenever they are proposing 20 or more redundancies, regardless of whether the redundancies take place at one establishment or not. This will ensure that more employees—many of them in vulnerable positions—will now benefit from redundancy consultation, and that affected employees can participate meaningfully in the redundancy process, regardless of how they might be dispersed across an employer’s business. The clause will also make it easier for employers to understand when they have to comply with these obligations.

I know that businesses have raised some concerns about the practical implications of the clause and I will take this opportunity to clarify its scope. First, the clause does not mean that employers will need to consult with the entire workforce in their organisation whenever they propose 20 or more redundancies. As is currently the case, they must consult only the relevant trade union or employee representatives of employees being proposed to be made redundant, or those who may be affected by measures implemented as a result of the proposed redundancies, such as relevant line managers.

Secondly, when an employer is required to undertake collective consultation with employees across different establishments, they have the flexibility to tailor the process to suit each location. For example, they are not required to undertake a single, uniform consultation across affected locations, but can hold separate consultation activities with each group of affected employees to ensure that discussions are both localised and meaningful.

--- Later in debate ---

[Michael Wheeler]

I am sure it is not. I worked in a retail establishment that did not benefit from trade union representation and that went through consultation, not on redundancy but on a variation of contracts, so it is relevant to what we were talking about before. It was actually a relatively smooth and easy process for employee representatives to be appointed and elected from among our number, despite the lack of an existing structure, and to engage with the company in those consultation exercises. While I would love there to be a trade union fighting the corner for every worker, when it is absent it is not a burdensome process to have employee engagement in these processes.

[Justin Madders]

I recognise that the shadow Minister welcomed the clarification I provided. No doubt there will be debate to come, as is often the case with legal issues, but the Government are fairly clear and confident that the clause will not have the unintended consequences we heard raised in evidence.

The shadow Minister asked, “Why 20?” He will pleased to know that that was a product of EU regulation. It is in existing law as part of the Trade Union and Labour Relations (Consolidation) Act 1992, which has been amended many times, so I could not say exactly when it came into force, but—

[Greg Smith]

The Minister can of course look back in history at when these measures were put in, but the Bill seeks to change all sorts of things across all sorts of sectors. We are free from the European Union! He could change it if he wished.

[Justin Madders]

I will remember that next time the shadow Minister tells me that we are trying to do too much in this Bill. With the Retained EU Law (Revocation and Reform) Act 2023, the Bill Committee for which I had the great pleasure of serving on, his Government could have done something about this before they left office.

The figure of 20 is long established, and we have no current plans to change it, but we are keen to ensure that the scenario my hon. Friend the Member for Worsley and Eccles described cannot continue. As he said, Woolworths made 27,000 people redundant, and about 3,000 of those were completely exempt from collective redundancy consultations because of this issue. There has been a number of high-profile retail redundancies where people have missed out on collective redundancy obligations because of this law, which we are pleased to be able to change.

On the question of smaller employers where there may not be trade union representation readily available, the regulations already provide for employee representatives to be engaged and elected in those circumstances, so there is no change to the law in that respect. There is already provision to deal with that situation.

Question put and agreed to.

Clause 23, as amended, accordingly ordered to stand part of the Bill.

Clause 24

Collective redundancy notifications: ships’ crew

Question proposed, That the clause stand part of the Bill.

[Justin Madders]

The clause will address the loophole that allowed P&O Ferries to avoid prosecution when it dismissed 786 seafarers without notice in March 2022. It will require operators of frequent services to British ports to notify the UK Government when making 20 or more redundancies even if those affected work aboard ships registered in another state. The clause means that if an operator of frequent services to a British port chooses to copy P&O Ferries and make collective redundancies without providing notice to the Government, it could face prosecution under the Trade Union and Labour Relations (Consolidation) Act 1992 and ultimately be liable for an unlimited fine.

The clause will apply to services calling between Great Britain and another place in the UK. It will also apply to any services entering Great Britain from a place outside the UK on at least 120 occasions in a 12-month period before the redundancy notification, or to new services that have been operating for less than 12 months and have called 10 times or more per month while they have been operating. We estimate the number of operators in scope of the measure to be around 2,000. The cost to businesses will be minimal; it is estimated to be around £20 per notification. We hope that the prospect of an unlimited fine will deter operators from making mass redundancies without the appropriate notification.

While this measure may not prevent redundancies from being made, it will mean that the Government and any employee representatives must be notified before any dismissals take effect. It will prevent the sort of disruption seen following the P&O Ferries dismissals and will mean that the Government will be able to provide valuable support to seafarers facing redundancy. I therefore commend the clause to the Committee.

[Greg Smith]

I understand where the Minister is coming from, particularly on the expansion of the requirement to notify the flag state. I spoke earlier about my time on the Transport Committee watching the P&O scandal unfold; we held some pretty tough evidence sessions as part of that. I understand that the clause is very specifically to protect seafarers from that sort of engagement. I very much hope that it works to protect those seafarers, and we will not oppose it.

[Steve Darling]

We are strongly supportive of the measure.

[Justin Madders]

I am pleased to see that we have support all round.

Question put and agreed to.

Clause 24 accordingly ordered to stand part of the Bill.

Clause 25

Public sector outsourcing: protection of workers

[Justin Madders]

I beg to move amendment 59, in clause 25, page 36, line 14, leave out subsection (2) and insert—

“(2) After Part 5 insert—

‘Part 5A

Outsourcing: protection of workers

83A Application of this Part

(1) This Part provides for a Minister of the Crown, the Scottish Ministers and the Welsh Ministers to make provision for the protection of workers in relation to relevant outsourcing contracts (see section 83B).

(2) Accordingly, in this Part, “appropriate authority”—

(a) means—

(i) a Minister of the Crown,

(ii) the Scottish Ministers, or

(iii) the Welsh Ministers, and

(b) does not include a Northern Ireland department.

(3) In addition to the restrictions in section 113, a Minister of the Crown—

(a) may exercise a power under this Part for the purpose of regulating devolved Scottish authorities only in relation to joint or centralised procurement under a reserved procurement arrangement;

(b) may not exercise a power under this Part for the purpose of regulating joint or centralised procurement under a devolved Scottish procurement arrangement.

(4) The Scottish Ministers—

(a) may only exercise a power under this Part for the purpose of regulating—

(i) devolved Scottish authorities, or

(ii) procurement under a devolved Scottish procurement arrangement;

(b) may not exercise a power under this Part for the purpose of regulating—

(i) joint or centralised procurement under a reserved procurement arrangement, or

(ii) joint or centralised procurement under a devolved Welsh procurement arrangement.

(5) In addition to the restrictions in section 111, the Welsh Ministers—

(a) may exercise a power under this Part for the purpose of regulating devolved Scottish authorities only in relation to joint or centralised procurement under a devolved Welsh procurement arrangement;

(b) may not exercise a power under this Part for the purpose of regulating joint or centralised procurement under a devolved Scottish procurement arrangement.

(6) This Part does not apply in relation to—

(a) a private utility;

(b) a person referred to in regulation 4(1)(b) of the Utilities Contracts (Scotland) Regulations 2016 (S.S.I. 2016/49);

(c) a devolved Welsh authority listed in Schedule 1 of the Social Partnership and Public Procurement (Wales) Act 2023 (asc 1);

(d) procurement under a transferred Northern Ireland procurement arrangement, except to the extent that the procurement—

(i) is carried out by a devolved Scottish authority, and

(ii) is not joint or centralised;

(e) a transferred Northern Ireland authority, except in relation to—

(i) procurement under a reserved procurement arrangement,

(ii) procurement under a devolved Scottish procurement arrangement, or

(iii) procurement under a devolved Welsh procurement arrangement.

(7) For the purposes of this section, procurement under a procurement arrangement is “joint or centralised” if as part of that procurement arrangement a contract is to be awarded following a procedure or other selection process carried out—

(a) jointly by a devolved Scottish authority and another contracting authority which is not a devolved Scottish authority, or

(b) by a centralised procurement authority or equivalent body.

83B Relevant outsourcing contracts

(1) In this Part, “relevant outsourcing contract” means a contract in relation to which conditions A to C are met.

(2) Condition A is met where the contract—

(a) is a public contract under this Act, or

(b) is a contract regulated by Scottish procurement legislation.

(3) Condition B is met where the contract—

(a) is a contract for the supply of services that include the performance of functions that are or have previously been performed by the contracting authority, or

(b) is—

(i) in the case of a public contract, a framework for the future award of a contract referred to in paragraph (a), or

(ii) in the case of a contract regulated by Scottish procurement legislation, a framework agreement the purpose of which is to establish the terms governing a contract referred to in paragraph (a).

(4) Condition C is met where the functions referred to in subsection (3)(a) are, or are expected to be, performed by individuals (“transferring workers”) who—

(a) in performing the functions, are employed by the supplier or a sub-contractor under a worker’s contract, and

(b) were employed by the contracting authority under a worker’s contract in performing functions of the same kind.

(5) For the purposes of this Part—

(a) “contract regulated by Scottish procurement legislation” means a contract the procurement of which by a devolved Scottish authority is regulated by Scottish procurement legislation;

(b) in relation to a contract regulated by Scottish procurement legislation—

(i) “contracting authority” means a devolved Scottish authority that is a contracting authority within the meaning of the relevant Scottish procurement legislation;

(ii) “framework agreement” has the same meaning as in the relevant Scottish procurement legislation;

(iii) “supplier” means an economic operator within the meaning of the relevant Scottish procurement legislation;

(iv) “the relevant Scottish procurement legislation” means the Scottish procurement legislation regulating the procurement of the contract.

83C Power to specify provision for inclusion in relevant outsourcing contracts

(1) An appropriate authority may by regulations specify provision to be included in a relevant outsourcing contract for the purpose of ensuring that—

(a) transferring workers of a specified description are treated no less favourably as workers of the supplier or a sub-contractor than they were as workers of the contracting authority, and

(b) workers of the supplier or a sub-contractor who are not transferring workers and are of a specified description are treated no less favourably than those transferring workers.

(2) In carrying out the procurement of a relevant outsourcing contract, the contracting authority must—

(a) take all reasonable steps to ensure that provision specified under subsection (1) is included in the contract;

(b) where provision specified under subsection (1) is included in the contract, take all reasonable steps to secure that such provision is complied with.

(3) Subsection (2) does not apply—

(a) where the contracting authority or the relevant outsourcing contract is of a specified description, or

(b) in specified circumstances.

(4) In this section, “specified” means specified in regulations made by an appropriate authority.

83D Code of practice on relevant outsourcing contracts

(1) An appropriate authority must prepare and publish a code of practice containing guidance to contracting authorities for the purpose of ensuring that, where a contracting authority carries out the procurement of a relevant outsourcing contract—

(a) transferring workers of a description specified in the code are treated no less favourably as workers of the supplier or a sub-contractor than they were as workers of the contracting authority, and

(b) workers of the supplier or a sub-contractor who are not transferring workers and are of a description specified in the code are treated no less favourably than those transferring workers.

(2) An appropriate authority—

(a) may amend or replace a code published by it under subsection (1), and

(b) must publish any amended or replacement code.

(3) A code published under subsection (1) or (2) must—

(a) in the case of a code published by a Minister of the Crown, be laid before Parliament;

(b) in the case of a code published by the Scottish Ministers, be laid before the Scottish Parliament;

(c) in the case of a code published by the Welsh Ministers, be laid before Senedd Cymru.

(4) In carrying out the procurement of a relevant outsourcing contract, the contracting authority must have regard to the code of practice for the time being published under subsection (1) or (2).

(5) This section does not require an appropriate authority to do anything which the authority does not have power to do (see section 83A and Part 11).

83E Interpretation of this Part

(1) In this Part—

“appropriate authority” has the meaning given in section 83A(2);

“contract regulated by Scottish procurement legislation” has the meaning given in section 83B(5)(a);

“relevant outsourcing contract” has the meaning given in section 83B;

“transferring worker”, in relation to a relevant outsourcing contract, has the meaning given in section 83B(4);

“worker” and “worker’s contract” have the same meaning as in the Employment Rights Act 1996 (see section 230 of that Act).

(2) For the purposes of this Part, in relation to a contract regulated by Scottish procurement legislation, “contracting authority”, “framework agreement”, “supplier” and “the relevant Scottish procurement legislation” have the meaning given in section 83B(5)(b).

83F Power of Scottish Ministers to amend this Part

The Scottish Ministers may by regulations modify section 83A, 83B or 83E in consequence of a modification of Scottish procurement legislation.’”

This amendment would restructure the new provisions to be inserted into the Procurement Act 2023 so that the powers and duties extend to the Scottish Ministers and Welsh Ministers and devolved Scottish and Welsh authorities. The amendment also clarifies that the duty to publish a code of practice does not depend on the making of the regulations.

[The Chair]

With this it will be convenient to discuss Government amendments 60 to 64.

[Justin Madders]

Amendment 59 will expand and restructure the provisions in clause 25, which amends the Procurement Act 2023, to reinstate and strengthen the two-tier code for relevant outsourced contracts for public services so that the powers and duties in clause 25 extend to Scottish and Welsh Ministers. Amendments 60 to 64 make changes that are consequential on those made by amendment 59, including by updating various definitions in the Procurement Act 2023 and by providing that regulations made by Scottish and Welsh Ministers must be made using the affirmative procedure of the Scottish Parliament and the Senedd.

We are making the amendments at the request of the Scottish and Welsh Governments. They are necessary because to get the benefits of a consistent approach to fair and equitable employment terms and conditions on relevant outsourced contracts, it is essential that a reinstated two-tier code applies throughout the UK.

We continue to engage with our counterparts in Northern Ireland about whether the powers should also extend to Ministers there. The regulations and code of practice created in our provisions will apply to reserved Northern Irish authorities. I commend the amendments to the Committee.

[Greg Smith]

I am reminded of the old chestnut about rushing out a Bill in 100 days and forgetting about the devolved settlements as part of the process. Given that devolution was largely the product of the previous Labour Government, I am slightly surprised that the current one would forget about Holyrood and Cardiff Bay. However, it is good that we now have clarity. We will of course want to test how things are actually going to work. Indeed, the question of Northern Ireland—which is just as important a part of our country as England, Scotland and Wales—really should be resolved sooner rather than later, so that there can be clarity that the Government are seeking to legislate for the whole of our United Kingdom of Great Britain and Northern Ireland, and not doing it in a piecemeal fashion.

[Justin Madders]

I gently correct the shadow Minister: we did not forget to engage with the Scottish and Welsh Governments. We were making sure that we had agreement before we tabled amendments, which is why they have appeared as they have today.

[Chris Murray (Edinburgh East and Musselburgh) (Lab)]

Does the Minister agree that this is actually an example of the Government keeping not only their manifesto promise to deliver a new deal for working people, but the manifesto promise that I certainly made many times during the election campaign, which was that the new Government would show the utmost respect for the Scottish Parliament and Government, and for all the devolved institutions? I reassure the Minister that the Scottish Parliament was not forgotten during the drafting of the Bill, because there was extensive engagement with the Scottish Government, some of which I saw myself.

[Justin Madders]

I could not agree more with my hon. Friend. On that note, I commend the amendments to the Committee.

Amendment 59 agreed to.

Amendments made: 60, in clause 25, page 37, line 33, at end insert—

“(2A) In section 2 (contracting authorities), after subsection (1) insert—

‘(1A) But see also section 83B(5)(b)(i) (which provides for “contracting authority” to have an extended meaning in relation to certain contracts regulated under Part 5A (outsourcing: protection of workers)).’”

See the explanatory statement to amendment 59.

Amendment 61, in clause 25, page 37, line 34, leave out subsection (3).

See the explanatory statement to amendment 59 - because the new provisions are now being inserted as a new Part of the Procurement Act 2023, there is no longer any need to amend section 100 of that Act.

Amendment 62, in clause 25, page 38, line 3, leave out subsection (4) and insert—

“(4) In section 122 (regulations)—

(a) in subsection (4) (regulations by Ministers of the Crown subject to affirmative procedure), after paragraph (i) insert—

‘(ia) section 83C (provision for inclusion in relevant outsourcing contracts);’

(b) in subsection (10) (regulations by Welsh Ministers subject to affirmative procedure), after paragraph (g) insert—

‘(ga) section 83C (provision for inclusion in relevant outsourcing contracts);’

(c) in subsection (14) (regulations by Scottish Ministers subject to affirmative procedure), before paragraph (a) insert—

‘(za) section 83C (provision to be included in relevant outsourcing contracts);

(zb) section 83F (power to amend section 83A, 83B or 83E);’”.

See the explanatory statement to amendment 59.

Amendment 63, in clause 25, page 38, line 6, at end insert—

“(4A) In section 123 (interpretation), in subsection (1), in the definition of ‘appropriate authority’, at the end insert—

‘(but see section 83A(2) for a different meaning of “appropriate authority” in Part 5A (outsourcing: protection of workers));’.

(4B) In section 124 (index of defined expressions), for the entry for ‘appropriate authority’ substitute—