Arrangement of Business
The Deputy Chairman of Committees (Lord Haskel) (Lab)
My Lords, if there is a Division in the Chamber while we are sitting, this Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.
High Streets (Built Environment Committee Report)
(1 day, 18 hours ago)
Grand CommitteeRead Hansard Text Read Debate Ministerial Extracts
Lord Gascoigne
That this House takes note of the Report from the Built Environment Committee High Streets: Life Beyond Retail? (HL Paper 42).
Lord Gascoigne (Con)
My Lords, it is an absolute pleasure for me, as the new chairman of the Built Environment Committee, to open this debate on the importance of the high street. In doing so, I put on record my own thanks to the then members of the committee—including my predecessor, my noble friend Lord Moylan, who chaired this inquiry. I also thank the team of officials who helped the committee, our witnesses and those who submitted evidence. Thanks must also go to the Government for securing time for this debate.
Emperor Napoleon famously said that we were “a nation of shopkeepers”. By the time he said that, high streets were already well and truly established. Although it was meant as a derogatory slight, it spoke to some truth about our nation at the time and, to some extent, to this day. Over the centuries, high streets have remained a constant, where communities have come together to shop, to socialise and to work. They provide vital economic infrastructure and a space for people to meet and trade, to see and be seen. Yet they have of course evolved over time, reflecting changes in trade, retail, technology and society.
However, in recent years, high streets have faced extraordinary challenges. In 2023 alone, more than 10,000 high street shops closed across the UK. People up and down the country have felt the loss of their local clothes shops, pharmacies, pubs and banks. Although retail will remain a feature of the modern high street, there is now greater demand and, indeed, opportunity for restaurants and leisure activities—as well as for more public services, such as health centres and libraries—in town centres.
What communities want and what can be sustained on the high street is constantly changing, so the committee suggested that a “fixed vision” and a “monolithic approach” to their future should be avoided. Local authorities, communities and businesses need to work together to shape high streets that reflect local conditions and are adaptable and resilient. It is crucial that local businesses are involved and empowered to play a part in the regeneration of a high street, and that residents are involved in the decision-making.
High streets will thrive only if people can get to them easily and safely. Traditional high streets are in competition with the convenience of parking arrangements in out-of-town developments, so access by car and sufficient parking are necessary for commercial sustainability and accessibility, combined with better public transport connectivity, particularly through improved bus networks.
As retail occupancy declines and leaves behind vacant units, cafés and restaurants have taken their place. The committee noted that, due to
“wider economic circumstances, consumer preferences and the rent levels landlords seek to remain financially viable may result in the dominance of certain business types”.
For example, there has been a rise in the number of charity shops, which benefit from substantial business rates relief and often have lower staffing costs, making them better able to afford high street rents. Fast food businesses were also cited as being better able to afford tenancies.
Public authorities are also tentatively moving public-facing services, such as surgeries and libraries, on to high streets. This can both improve access to those civic functions and increase footfall to sustain local businesses. The committee found that, in needing to appeal to all sections of society and ages, people should feel safe through better light, clear sightlines and mixed use of properties; that more green space and an “improved public realm”, while not able to withstand the tide of change, have a role to play; and that there needs to be better access to toilets, especially for older people and those with young children. The committee also noted the importance of recognising and celebrating the local history of an area to encourage pride.
The planning system, taxation and funding can all impact the success or failure of projects to revive local places. The Government’s local growth funding reforms must ensure that high streets are enabled to flourish in the long term, and that those responsible for their future have enough expertise to deliver improvements. The Government should recognise that local authority bidding for central funding has become expensive and wasteful and should consider replacing that approach with a transparent system of funding distribution that commands greater confidence.
There are too many recommendations to mention them all today—many of them seem common sense and, to me at least, easy to implement—but there is one final thing I wish to say. The committee received a response from the Government at the start of the year. While we appreciate their response and stated commitment to high streets, ultimately we felt disappointed that the response did not adequately address all our points. We respectfully urge the Government to look again at our report and do their utmost to enable local authorities and other stakeholders to ensure that the nation’s high streets survive and thrive for the next generation.
As a relatively new chair, as I have said, you inherit the sterling work of others and so you are able to come to past work completely afresh. When I was informed that I would have to lead this debate, I was a little nervous as to what the report said—that I would perhaps have to try valiantly to look for something upbeat and positive to say, hold back my personal views and speak through gritted teeth. But I can say, hand on heart, that I found this report refreshing. It is neither stale nor desperate to cling to some nostalgic world long gone by. It is brutal in its analysis and thorough, but also realistic about the prognosis and how high streets can flourish.
High streets continue to hold a special place in the nation’s hearts and will continue to do so in years to come. Across the country, members of the committee heard about local communities, businesses and authorities working together to respond to societal change and build thriving town centres. With the right support and empowerment, there is no reason why high streets cannot continue to be the centre of communities in future. I personally and sincerely hope that councils, the Government, local businesses and communities genuinely see this as an opportunity not just for debate but for change and local growth. I look forward to listening to all noble Lords’ contributions. I beg to move.
Baroness Andrews (Lab)
My Lords, I am pleased that we have an opportunity to debate last year’s report on the future of high streets from the Built Environment Committee, chaired with such brio by the noble Lord, Lord Moylan. It was a very interesting and thoughtful process. We have an opportunity today to consider the Government’s largely positive response. I warn the Minister that I will ask him some detailed questions, although I do not necessarily expect a detailed reply. I am sure that officials will be able to write if necessary.
Most importantly, the Government’s response reflects their sense that the state and prospects of the high street reflect the wider state of the economy and the public realm, and therefore play a critical part in driving, as well as reflecting, national and local growth and renewal. They are part of the national mission. That is very reassuring. I was hopeful for a positive response for the reasons that my noble friend—as he is at the moment as the current chair of the committee—mentioned. Our conclusions are so well evidenced and practical, there should be nothing in this report that is in the “too difficult to implement” box.
The report’s title, Life Beyond Retail?, says it all, in contradiction to the mantra that there is no future for the high street because so much has changed and cannot now be restored. That is primarily in retail, but there are other changes as well. In this context, which is heavy with gloom and doom, we insist that there can be a bright future for the high street, which has evolved over thousands of years to meet changing needs and fashions, but it will take leadership, investment, imagination and innovation.
The Committee will hear a lot in my speech about Lewes, where I have lived for donkey’s years, because it is an exemplar of what is happening, both the worst and the best. Our high street has seen so much change, not to say drama, in its history, which dates back to the Anglo-Saxons. We still have shops with medieval foundations; they were trading in textiles when the Norman castle was being built a millennium ago. We have a 14th-century bookshop. Church, state and law are all physical in our high street. Opposite the county court, in all its magisterial splendour, is the hotel where Tom Paine preached revolution and where people continue to do so—it is that sort of town.
In short, the high street was a stage upon which all dramas played out. It was a marketplace for the community for centuries, but also the place where people met to learn, worship, celebrate, be judged or be improved, both young and old. Much of that community spirit has been retained, but we have lost small supermarkets, butchers, ironmongers, bookshops, post offices and banks. They have largely been replaced, as we have heard, by cafés, charity shops, estate agents, computer shops, hairdressers and nail bars. None of that is unique to Lewes, but it exemplifies in different ways what is happening across the country at different speeds. While the report makes clear that there is no single prescription for a monolithic high street, there would never have been and will never be one.
There are universal explanations for the changes we have seen. The noble Lord, Lord Gascoigne, has already touched on retail. My figures show that between March 2020 and March 2022, 9,300 retail units were closed. PwC found that in the first half of 2024 there was a net loss of 2,284. Often, it is the large department stores and chain stores that go first and are most vulnerable. That has been driven by a combination of factors, such as online shopping, which was furiously accelerated by Covid, unaffordable business rates, poor public transport and parking, a run-down and often sordid public realm with few places where people can socialise without paying for it, neglected green spaces, empty churches and a general air of neglect and alienation. It is not a universal condition, but these are universal challenges, and we discuss them all in the report.
This is not a party-political issue. It is a social and economic challenge. The previous Government threw up a host of complex programmes for the medium and short term, which were warmly greeted, but, as the NAO and various reports said, they did not seem to understand what had worked on the high street and the impact of complex funding arrangements. We heard all about that from our witnesses, who said that they have a new funding application to consider every day, and that in the context of a rundown of public capacity.
Our report recognised that the previous Government had made an attempt to plan for the longer term, but in the short term we said that a clear strategy is needed, based on clear leadership, greater local capacity to develop the high street and town centre and ways of involving the community—for example, town centre managers with training and expertise charged with co-ordinating and driving development and more inclusive and engaged partnership for business improvement districts. The report illustrates what we mean by reference to places such as Frome in Somerset. It also needs long-term, sustained investment. The Budget this year confirmed the 75 neighbourhood partnerships and a revised prospectus. Will the Minister say when we can expect the revised prospectus? Why and how will it be different?
We focus on some specific issues, including housing, transport and community engagement. We have had the repurposing of empty department stores or offices for affordable housing under permitted development relaxation, but we have also seen a failure of quality and design and a missed opportunity. We recommended, for example, a review of the use of class E properties. Will this happen? When will we see a review of permitted development rights? We are told that they are in train. What do the Government think they can achieve in terms of good transport and good parking, which they say has a local role? What will be the impact of local government reorganisation on capacity?
One of the core questions is how we support business in the high street. The chain stores are unlikely to come back. The future will lie with those small, necessary, ingenious businesses that we all love and cherish, such as excellent bakers, plant shops or exciting children’s bookshops. These are the reasons people come to the high street. The Government say they will publish their small business strategy. When will it be published? Will it specifically address the issue of the high street? Will the Government maintain the priority given to the town centre-first retail policy within the NPPF? Will they, when they review business rates, have particular regard to the need to consider and simplify the range of business rates relief schemes to support the high street?
We found reasons to be cheerful. We found innovation, leadership and good practice, which can turn terminal decay, if not decline, into a new proposition. The report is full of examples of innovation, such as teenage markets and regeneration through the heritage action zones. Whether it is churches that have lost their congregations or cinemas that have closed, historic buildings are invaluable assets for their social and collective possibility. The ability to buy those to turn them into local markets, child centres, workshops and climate hubs can really engage people in reimagining what the high street could look like.
We were told by young people, businesspeople and local leaders alike to give the community more power to design the future they want. They want to be involved in this new vision for their high street. The Government have said that they intend
“to commence a package of plan-making reforms … to improve the quality of community engagement”.
Where have we got to on that? The Government say they will invest in initiatives to boost town and city centres, including high street accelerators. I do not really know what that means. I would be grateful for a further explanation.
One of the most positive and popular developments is to reimagine the high street as the place where things can get done and not just bought. The opportunities are there to put in place some of those public services which have disappeared from view because they are increasingly online, and the people who lose out are the people who are in greatest need—the poor, the elderly, the young—who want to talk to somebody, who want advice face to face.
For example, my high street now has a brilliant local authority outlet where complicated questions about a new garden waste bin—I will not bore the Committee with the details—can be sorted in five minutes rather than five hours online. The possibilities are endless: housing offices; walk-in surgeries for routine vaccinations and diagnostic tests; toy libraries for young mums with small babies and giant buggies; repair cafés for the things that have to be thrown away because there is nobody to repair them; empty shop windows where the local university can show some of the work it is doing; empty shops that can be converted into pop-up galleries for FE art students to display their work—the ideas are endless and excellent and they are there, in the community, waiting to be put into place with imagination. They are about experience and quality, not retail.
Our report creates an imaginative future for the high street. I really hope that the Government will take it and do something with its recommendations as part of their wider set of policy proposals.
Baroness Miller of Chilthorne Domer (LD)
My Lords, it is always a pleasure to follow the noble Baroness, Lady Andrews, with her knowledge and expertise. I think she put it in a nutshell when she described a high street where things can get done as opposed to just bought. My thanks go to our new chair, the noble Lord, Lord Gascoigne, for so ably introducing this debate, and to our previous chair, the noble Lord, Lord Moylan, for guiding us through what could have been a very complicated issue and arriving at a pretty succinct report.
We had a lot of discussion about why a high street is important and who should be responsible for its revival. Of course, we found that there is no one blueprint but our report highlights the factors important to success. It is clear from the evidence we received that a proactive local authority is very important, especially in pump-priming, but the role of the wider community after that is critical—businesses big and small and community organisations are all crucial.
We heard from Frome in Somerset. Its town council began that pump-priming process by hiring a town centre manager and engaging with a local entrepreneur. It has a multi-pronged approach to reviving and maintaining the health of its high street, which has been incredibly successful. Especially compelling was its use of markets to increase footfall and provide opportunities for smaller independent retailers, and it recognised the role that culture plays.
Moving from the positive to the negative, I want to highlight the shocking evidence—I was certainly shocked—that we received from the Royal Society for Public Health. It found that one-fifth of the general public do not go out as often as they would like due to their concern about the lack of public toilets. We can guess which fifth that is: the elderly and those with small children, the very groups who may already suffer from isolation and loneliness. They are not going out as often as they would like just for fear of being caught short. For the elderly, this is inevitably an increasing concern and it is a very important concern, too, for parents with children out of nappies but still young. Of course, urinating in public is an offence and one that authorities sometimes have to invoke to deal with public nuisance caused by alcohol consumption followed by wanton urination, but that is a completely different issue. As our report says:
“Public toilets make it possible for everyone to use the local high street with confidence and comfort”.
Local authorities need to be proactive in finding ways to provide such an essential facility. It is one of the most basic health and dignity issues, but there has been a shocking decline in provision of public toilets.
Accessibility was also found to be lacking, by and large. I will not spend a lot of time on transport and car parking, but that was an important issue, as was access for wheelchairs and those using walking frames, for example. I have recently begun to notice how incredibly important this is, since my husband had a stroke. You notice how there are so few dropped pavements, for example, which would make life so much easier.
The timing of the Government’s response was quite difficult because there was an election between publication of our report and the response. Perhaps one of the most disappointing parts of this Government’s response was on parish and town councils. As the local authorities most involved in their community, they are ideally placed to be the most proactive in high street revival, but the Government’s response to our suggestion that they should be able to bid directly for funds was only that they
“will continue to look at”
it. I hope the Minister will be able to say a bit more today and that we will be able to debate this further in the forthcoming devolution Bill.
One of the most compelling sections of our report is that which concerns public service delivery, which the noble Baroness, Lady Andrews, touched on. We heard that the public are very keen to have NHS services located on or relocated to the high street, not least because the transport links may well be better and because it increases footfall for businesses. We heard evidence from Councillor Vikki Slade, who was the council leader in Poole and is now MP for Mid Dorset and North Poole. She explained how the public services they had introduced to ex-retail space—an NHS out-patient centre, a library and some charity space—had “completely reinvigorated the town”. Of course, the big traditional department stores have closed and the challenge facing many high streets is what to do with that space. We heard from Barnsley, whose local authority had to be pretty dogged, frankly—given its setbacks—to arrive at its Glass Works redevelopment project, which includes open space, an NHS diagnostics centre, a market and much more.
Success stories are out there, from small towns to small cities, but sometimes that has been despite the propensity of central government to change funding models so often. The previous Government had a very time-consuming and wasteful bidding process. One of our main recommendations, in paragraphs 173 and 174, is that there is still a role for an appropriate bidding process, but it must be highly simplified and possibly involve a two-stage system with a simple initial bid that would be developed if successful. The Government acknowledged this in their response and mentioned the reform to the long-term plan for towns. Can the Minister tell us any more about that today?
Another issue we heard a lot about was green space. Our evidence underlined the value of having space in which to socialise and spend time without having to spend money—a point emphasised to us by the young people we engaged with. I thank those involved in the House of Lords engagement programme, who produced some very lively groups of young people. We heard that it is not just about prettifying with hanging baskets; it is about usable space.
There is plenty of evidence, too, about the benefit of green space and nature to mental health and physical well-being. Here, I have to praise Lambeth Council, which, in the 20 years that I have had a flat in the borough, has transformed many of its green spaces, including with things such as outdoor gyms. It is fantastic. This does not seem to be controversial until developers realise that green spaces are a cost to them and local authorities could see them as a cost, as they produce no rates or council tax. There is no national statutory green space standard, but it is reasonable to hope that the Planning and Infrastructure Bill might have a genuine element of seeing green space as critical to good development.
Things to appreciate in the Government’s response include high street rental auctions and community right to buy. The Government correctly said in their response:
“High streets matter … because they reflect the wider state of the economy and the public realm”.
That is very true. Valuing the public realm is, to me, the essence of what we should be looking for and enabling in a high street. The private realm has been good at looking after its own and I hope this report makes a contribution to rebalancing that trend.
Lord Mair (CB)
My Lords, it was a privilege to be a member of the Built Environment Committee under the expert chairmanship of the previous chairman, the noble Lord, Lord Moylan. Our inquiry on high streets received more than 60 submissions of evidence from many organisations and individuals. I thank our excellent clerk Kate Wallis and her team, our specialist adviser Dr Lucy Montague and our impressive witnesses. I also congratulate the noble Lord, Lord Gascoigne, on his introductory speech for this debate.
I welcome the broadly positive response of the Government to our report. There can be no doubt that high streets have encountered numerous challenges in recent years. There are at least two principal reasons: first, the falling consumer demand for retail shopping and an increase in online shopping; and, secondly, the presence of out-of-town retail parks and shopping centres. In many towns, these have led to shop closures, declining footfall and a general loss of appeal of the high street.
Our committee recognised that local high streets should be at the heart of communities. We set out to elucidate answers to three key questions. What makes a resilient and thriving high street? Who needs to be involved in making it a success? What is the role of government working with local communities in both policy and funding? I will briefly address some aspects relating to these three key questions.
First, what makes a resilient and thriving high street? Our committee found from oral and written evidence that there is no magic formula. Each high street faces different challenges. It was clear that what people want from their high street has constantly evolved and will continue to do so. This means that conforming to a fixed vision should be avoided. There is a need for adaptability and diversity. However, some common themes emerged. Ideally, communities want a mix of retail and services, green spaces and ready accessibility in terms of safe and easy access—the latter meaning good public transport connectivity, nearby parking for car access and careful design of pedestrianisation. Our inquiry emphasised the importance of celebrating the local history and character of a place, conserving and repurposing historic buildings wherever possible. Celebrating the character and heritage of the high street has a highly beneficial effect, encouraging a greater sense of pride in place, and it potentially draws more people in, increasing footfall.
Linked to celebration of local history is the existence of markets. Many markets to this day still operate under historic charters or local laws. We received evidence that around 80% of markets are owned and operated by local authorities. They enhance the vitality of a local high street, increase footfall and can act as catalysts for new businesses. We strongly recommend that local authorities and other market operators should continue to support market traders.
A thriving high street also needs attractive, well-designed and sustainable public space, notably including green areas. We heard about the value of people having space to socialise and spend time—without necessarily spending money—on the high street. Our committee undertook an engagement event with students from Lancaster and Shrewsbury; they told us that they want to see more and safer green spaces, giving them space to hang out and socialise. Ensuring that there are clean and well-maintained places for young people to socialise can contribute to the high street being used by a larger proportion of the community. This, in turn, can improve footfall and hence sustain local businesses and public services.
Secondly, who needs to be involved in making a successful high street? Ideally, landlords, business owners, local community members and local authorities all need to be involved. A sense of community, local pride and belonging—in other words, pride in place—is widely recognised as a vital ingredient for a thriving high street.
A Private Member’s Bill, the High Streets (Designation, Review and Improvement Plan) Bill, introduced by Jack Brereton in the House of Commons and sponsored by the noble Lord, Lord Whitby, in this House, received its Second Reading in this House in May 2024. Unfortunately, the Bill, which had cross-party support, did not progress in time before Parliament was dissolved for the general election in July 2024. It would have required all local authorities in England to designate at least one street, or a network of streets if appropriate, as a high street in their area.
Once in place, improvement plans would need to be reviewed at least once every five years. Consultation would have played a key role in the development of improvement plans. Local authorities would have been required to consult on the designation of high streets, as well as on the plans themselves. Ensuring community buy-in and support for a designated improvement plan for high streets was a particularly welcome feature of that Private Member’s Bill. Will the Minister support this principle and will the Government consider introducing a similar Bill?
Local planning policy is clearly a key determinant in the future of successful and thriving high streets. The previous Government amalgamated a number of use classes within the planning system into a single use class E to increase flexibility in building usage and revitalise city centres. It allows change in use across existing commercial, business and service buildings, without the need for planning permission. For example, a retail shop could be converted into a café, or an office into flats. Our committee noted that the introduction of use class E in the planning system has made high streets more adaptable.
However, too many retail premises converted into flats could have a damaging effect on the success of a thriving high street. If most of the shops were converted into flats, the character and vitality of a high street would change radically. We therefore recommended that the Government should undertake a review of the policy of expansion of permitted development rights to convert use class E properties into homes; there is a need to examine the impact that this is having on high streets relative to the number and quality of new homes delivered.
In response, the Government stated that it was important to achieve a balance—a balance between business owners and landlords adapting buildings and the ability of local authorities to implement improvement strategies for high streets. Consequently, the Government are not currently intending to review the policy regarding use class E properties, but are keeping this position under review. The noble Baroness, Lady Andrews, referred to this. Can the Minister confirm that this is still the Government’s position? Does he agree that the use class E policy potentially risks damaging the vitality of high streets?
Thirdly and finally, what role should government have in funding high street improvements? Our committee received evidence that there is a wide range of different government programmes providing funding to local authorities for high street regeneration, but the wide range is confusing and lacks policy clarity. Moreover, the bidding system for awarding funding has historically been inefficient and costly for local authorities applying for funding. As we heard from the noble Baroness, Lady Miller of Chilthorne Domer, this is time-consuming and a strain on already limited resources for local authorities. Our committee therefore recommended that any future programmes created as part of the local growth funding reforms should have a highly simplified bidding process.
We also recommended that the Government consider implementing a two-stage bidding process, with a simplified, cursory first stage. This would ensure wider participation by local authorities in bidding for funds for much-needed and vital improvements to their high streets. Can the Minister give an assurance that a simplified bidding system will soon be available? This would greatly assist local authorities in the often much-needed regeneration of their high streets.
The Lord Bishop of St Albans
My Lords, I thank the noble Lord, Lord Gascoigne, for securing this debate, for taking over as chair of the Built Environment Committee and for his excellent opening speech. I declare my interest as a vice-president of the LGA.
I saw the impact of a can-do council appointing a town centre development officer when I became archdeacon of Stoke some 30 years ago. He would not take no for an answer. When you saw him coming, you got out your tin hat and tried to hide, because he was absolutely determined to develop what became the cultural centre of Hanley. It was an extraordinary transformation. I left some 25 years ago, and I am sure that they need to continue to develop for whatever is required now, but I saw just what the impact of that kind of appointment could be. It was an impressive piece of work.
This report is timely and educational. It is so easy when talking about the decline of the high street to hark back to some golden past, because that is probably what we all remember from years ago. But we must not expect a prosperous high street in 20 years’ time to look the same as it did 20 years ago, and we must not try to revive some version of the high street as we used to know it. The day of the retail-dominated high street, as this report demonstrates, is at least partially over, with reportedly more than 13,000 high street stores having closed in 2024. We need to be creative, innovative and imaginative in our approach to the high streets of the future, as we pivot towards a greater mix of leisure activities, restaurants and public services in our high street offer.
It is not only retail stores that have been closing in vast numbers; we have seen a cutting back of essential services, such as local bank branches and post offices. I recently spoke in a debate on the impact of the closure of high street banking services on SMEs, and the disproportionate impact that this has on the ability to open new businesses in small towns and villages. Can the Minister provide assurances that this is an issue that His Majesty’s Government are seeking to address in the forthcoming small business strategy? I am sure he is aware that some SMEs have been having a particularly difficult time of late, and I know he understands the vital role they have to play in creating strong, vibrant local communities.
I note also that in His Majesty’s Government’s response to the report, they stated that
“a fuller policy response was in development”,
and that they would have more to say on their plans to rejuvenate high streets soon. I hope that this debate can inform and shape that process, as I know there is a great deal of wisdom and expertise here in the Room today.
I will briefly make three points about the challenges of rejuvenating high streets and town centres. First, this is often a crisis that hits rural communities particularly hard, including smaller towns and high streets that may have just a few premises. I made this point in the debate in the name of the noble Lord, Lord Sharkey, on small businesses a few weeks ago, and I believe it is pertinent here too. The Government’s response to the report highlighted how the plan for change will support
“the future success of our high streets … from growing the economy to safer streets”,
as well as by devolving power away from Westminster and back into the hands of local communities through the English devolution White Paper.
However, as I have pointed out on a number of occasions, none of these policy papers or pieces of legislation has come forward with any obvious rural-proofing or evidence that the specific challenges and circumstances facing rural communities have been considered. From the National Planning Policy Framework to concerns raised about the circumstances of devolution, from rural areas subsumed into large unitary authorities to the industrial growth strategy, consideration of the needs of rural communities and businesses is being consistently neglected. This will come at a cost to the Government’s own growth mission.
I have referred in the past to the Pragmatix report commissioned by the Rural Coalition, titled Reigniting Rural Futures. It lays out an economic analysis showing the comparative underperformance of the UK’s rural economy and urban areas, compared with their European counterparts, and that the UK’s rural economy has the potential, with the proper policy framework and investment in place, to contribute a further £19 billion in tax receipts to the Exchequer.
Secondly, I want to comment briefly on the need for us to be imaginative about how we develop town centres. Here I am thinking about something that is close to my own heart: how we can maximise and use our historic buildings—among them, parish churches. Ever since I have been a bishop, I have been on a mission to try to get every one of our parish churches unlocked every day. This is not always easy. In some town centres, it is particularly difficult—you may have groups of young people who are up to mischief—but, generally, we can achieve it. Interestingly enough, Ecclesiastical Insurance, which insures most of our church buildings, prefers open churches in principle because, if a church is locked, it says that there is something valuable to pinch. We need to get people into the buildings; the more they are used, the better.
In the long term, the best solution for all our historic listed buildings is to find good everyday use. There are lots of places where churches have not only managed to open their premises but had a win-win solution, where, perhaps, some sort of glass screen has been put up in a side aisle built on in the Victorian era. I think of, for example, All Saints in Hereford and St Michael’s in Bath, which developed much-needed facilities so that they could have a small café in the back while retaining the church as a place of worship. But to do that, we need a can-do attitude from our conservation officers. Sometimes, we also need helpful pump-priming, because the issues of access and disability are often far more difficult in these ancient buildings. I believe that, if we can only find a way to work together, we can find solutions that will enhance the experience of coming to our high streets.
My third and final point is about betting shops. Some noble Lords will know that I was the person who managed to get this House’s Select Committee on the social and economic costs of gambling, and that I am proud to be a vice-president of Peers for Gambling Reform. Our town centres are full of betting premises. It almost feels as though, every time a post office or WH Smith closes, what pops up is a betting shop; we can debate whether to call them shops as it could be argued that the only product they sell is, of course, debt. Many residents and councils are fed up with them, and the evidence shows that many of these shops are concentrated in our most deprived communities. The honourable Member for Brent East in the other place, Dawn Butler, recently raised the fact that there are more gambling premises in her constituency than there are supermarkets and schools. That is surely an extraordinary state of affairs; I find it hard to believe that such a vast number of gambling premises is in anyone’s vision of an attractive high street.
I remember being interviewed on the radio when there was some threat over the closure of betting shops. I was sitting in a mobile studio outside my house. They were trying to find people; it was in Rochdale, I think. I was surprised that everybody interviewed was against having these betting shops. Afterwards, I said to the editor of the programme, “You’re going to get criticised because you weren’t being unbiased”. He said, “We couldn’t find anybody who wanted to speak for them. We’ve tried. We keep asking people to help us with it”.
The crux of this issue is the aim in the Gambling Act 2005 to permit provision, which places a legal duty on councils to aim to permit gambling. Brent Council, along with 40 other councils, is leading a campaign to reform the 2005 Act so that we can protect our high streets from being swamped by these betting shops. If the Government are serious about devolving power to local government, councils must be empowered to act on this issue.
I would be grateful if the Minister could pass on my comments to his colleagues in the DCMS and the DHSC —arguably, this issue cuts across the MHCLG too. If we are serious about growth and regenerating our high streets, we need to tackle the unprecedented surge in gambling premises, which take money out of those local communities and send it elsewhere. The evidence is that, if you decrease the number of premises, more money will be spent locally. We need to address this issue.
Viscount Hanworth (Lab)
My Lords, I too served on the committee while this report was being compiled. I also commend our chairman and our secretariat.
The report testifies to the decline of Britain’s high streets. They have been suffering from the current economic troubles of the nation, which tend to be described as a cost of living crisis, but there are other enduring factors that have contributed to their decline. Among the recent difficulties affecting high streets have been the impact of the Covid pandemic and the rising proportion of online shopping. A less immediate problem has been the development of large shopping centres that have attracted customers away from high streets. This phenomenon has been seen in neighbouring countries, such as France, where large so-called hypermarkets have been built in out-of-town locations. It seems that the detriment of such developments has now been recognised in the UK and that measures are being taken to restrain them.
However, there are other pathologies that have had an enduring effect in the UK. Not the least of these is what might be described as the financialisation of the commercial property market. This process accelerated rapidly in the 1980s and 1990s. The result has been that the ownership of commercial properties is now preponderantly in the hands of financial institutions. These include real estate investment trusts, property companies large and small, pension funds, banks, foreign sovereign wealth funds and many other remote owners.
The assets within the commercial property market are conventionally classified as prime assets and subprime assets. The former include large office buildings and department stores and the latter comprise the majority of the buildings to be found on Britain’s high streets. The salient fact is that the majority of the properties in both categories are not owned by their current occupants. They are owned by parties who are remote from the locations in question and have no day-to-day involvement. The structure of ownership affecting large retail chains and department stores has been revealed in recent years by their financial collapse.
A prime example has been the Arcadia empire of Philip Green, which was created by the leveraged acquisitions of numerous businesses. Existing assets served as collateral for borrowings that were used to finance further acquisitions. In the process, Philip Green accumulated a personal wealth almost unprecedented in Britain. The sources of this wealth were the assets of the businesses that he had acquired. Many of these businesses had owned their own premises. They were sold by Green to the institutional investors of the property market. The consequence was that, when major trading losses arose, the property owners were able to call time on his businesses. There were no resources, other than Green’s personal wealth, available to sustain the businesses during the economic downturn. The truth of the matter was revealed when Green was able to sell British Home Stores for £1, without personal loss to himself, until he was constrained to supplement the pension fund.
The other side of the story concerns much smaller high street businesses that have suffered closure. The committee’s report reveals a startling fact about the landlords and property owners in the high street. A survey of 22 British high streets conducted in 2019 found that only 5.3% of retail and leisure units were owned by their current occupiers. As with much larger businesses, the retailers lacked the capital to sustain the temporary losses occasioned by an economic downturn and the businesses were forced to close.
The properties in question are liable to feature as entries on spreadsheets of large institutional investors, which have little incentive and little ability to quickly find occupants to replace those who are departing. Occupants might be found more quickly if property owners were inclined to reduce their rents; doing so would reduce the number or value of their assets and they would prefer to leave their properties empty for longer.
A further detriment arises from the remote ownership of commercial bodies, which affects their upkeep. Neither the owners nor the current occupants have a sufficient incentive to enhance the properties since any investment undertaken by one of the parties will be to the substantial benefit of the other party. The division of responsibilities for the upkeep of properties is typically determined by clauses in the lease, and these vary widely from case to case.
In Britain, there is a small and diminishing residue of municipal ownership within high streets. If a landlord is a local authority and if they have access to funds, then favourable opportunities for enhancement or the regeneration of a property or the wider environment can arise. However, this is an uncommon circumstance. It is notable that the circumstances are very different in neighbouring European countries. In Holland, for example, large proportions of town centre properties are under municipal ownership, and this is outwardly reflected in the superior upkeep of these locations.
A question to be faced is: what can the Government do to alleviate the distress of our high streets? The answer is that very little can be done, unless local authorities, development corporations and other relevant bodies are given the funds to enable them to undertake significant developments of high street environments. The high streets must be made more attractive, and they must cater to developing circumstances. Amenities must be brought to the high streets to replace the retail outlets that are closing. We have heard suggestions that doctors’ surgeries, libraries, restaurants and leisure activities should be attracted to the high streets. If the high streets and adjacent streets have been cleared of motorised traffic, then adequate public transport must be provided and parking facilities in adjacent areas must be established.
However, the question of funding is paramount. The report criticises the chaotic system of special funds that are available to local authorities, which are invited to compete for them. In many cases, it is too time-consuming for a local authority to make a bid when there is little chance of succeeding. Attempts to reform the system are, I hope, under way. The principal source of funds for local authorities is local taxation, which consists of domestic rates and business rates. We are led to understand that, in the future, 70% of a local authority’s income will be raised locally. A large proportion of this income will come from business rates, of which the councils will keep 50%. This will give them, so it has been said, a real incentive to go for growth and encourage enterprise and job creation.
The problem with rates being raised on properties is that they bear only a tenuous relationship to the income of the householder or to the turnover of a business, and they are often subject to angry resentments. However, it must be a priority to reform the system of local taxation and, in the process, to make it more productive of revenue. This will require the replacement of the rates by local income taxes and local turnover taxes.
Baroness Grey-Thompson (CB)
My Lords, I draw the Committee’s attention to my interests in the register. I am president of the Local Government Association, and I have previously been the chair of ukactive.
I welcome this timely and important report. As consumer behaviour continues to shift online, many of our towns are losing their economic vitality and civic identity. I shop online: it is quick and easy, but it is fairly soulless compared with visiting your local high street. As the committee notes, there is no single solution to regenerate our high streets, but we must remain flexible, recognising that no two communities are the same. But if we are really serious about regenerating high streets that are resilient and economically viable, inclusivity must be at the forefront of our efforts.
In 2014, the organisation Disabled Go—now known as AccesAble—audited nearly 30,000 high street shops and restaurants to assess their accessibility. Of the 27,000 retail outlets examined, only 20% were accessible to wheelchair users, largely due to steps and the absence of ramps. Moreover, 91% of the 105 leading high street retailers provided no online information about accessibility at their stores.
The picture is no better in the hospitality sector: around 40% of restaurants had no accessible toilet. I apologise; I am going to overshare. If I go somewhere new, I have to very carefully moderate what I drink, in case there is not an accessible toilet. Nearly half of the restaurant staff questioned said that they had received no disability awareness training.
While an audit on this scale has not been repeated since, the Government’s 2021 UK Disability Survey confirmed that there had been little progress in making our high streets more accessible. The report found that 31% of respondents had trouble accessing public spaces “all the time” or “often”. Of those, a further 78% said that they found it either impossible or very difficult to access shops.
This is not merely a social failure but an economic one. The spending power of disabled people and their households, commonly referred to as the “purple pound”, is estimated at £274 billion—a potential revenue that our high streets are actively losing due to inaccessibility. I recognise what others have said about old shops not necessarily being easy to adapt, but not all access is hard to achieve. It is about being creative, putting a notice outside the shop door or having a buzzer; it is about being open to thinking differently.
A disabled person recently shared an experience with me. He was visiting his local high street and was unable to access a shop due to the steps at the entrance, so his wife had to go inside to ask whether the shop had a ramp. It turns out that it did, but there was no way of knowing this from outside the shop. He told me that, if he had been alone, he would not even have bothered waiting outside or trying to shout through the door; he simply would have moved on. Many shops already have ramps and basic accessibility measures in place, but it is clear that visible communication is missing from our high streets.
I welcome the report’s recommendation to improve transport access to our high streets, but public transport still leaves a lot to be desired. While I greatly support improving bus networks for better connectivity, there is no promise that that will improve the journeys of disabled people.
Just last night, the noble Baroness, Lady Brinton, was informed when she was trying to get on a bus that the law has changed—supposedly—and that wheelchair users no longer have priority on board. The law has not changed, but this is not an infrequent experience for disabled people.
It is essential to the growth of our high streets that any changes to transport access must consider disabled people. Car parking spaces should account for adaptive vehicles and accessible EV charging. There is a woeful lack of EV charging ports available to disabled people across the country. About two years ago, I tried to change my car to an electric car and I found that there were no accessible charging points within at least a 40-mile radius of my house, so I could not switch.
In certain towns, EV charging spaces have been put on top of existing disabled bays. While there is no legal requirement to have a certain number of disabled bays in a car park, it is abhorrent that access for disabled people is continually being taken away. As such, I urge all local authorities to consult disabled people at all stages of regeneration projects. By including disabled people from the outset, local authorities will not risk having to spend more money down the line to make their towns more accessible.
I am also very interested in how we can use high street regeneration projects to drive growth among the UK’s physical activity sector, as previously reported by ukactive. There is a huge opportunity to integrate physical activity and well-being provision within communities by regenerating underutilised properties—shops, restaurants and vacant office spaces—into new, accessible and budget-friendly facilities.
Regeneration projects will benefit greatly from the inclusion of physical activity and sport; by creating healthier, more vibrant communities you are improving social conditions and making happier citizens. However, under current planning laws, it is easier to open a chicken shop than a yoga studio. If the Government are invested in promoting healthier lifestyles and decreasing obesity rates, why do they continue to make it a challenge for those who just want to improve the health and well-being of their communities?
I value my local high street. I love it: I love the eclectic nature of the shops and how people are trying really hard to make it more accessible, but there is still so much work that we have to do to make sure that disabled people have the same ability as non-disabled people to access local high streets.
Lord Moylan (Con)
My Lords, it was a great privilege to chair the committee during this inquiry and I am grateful for the kind remarks that have been made by noble Lords. The process must have addled my brain to some extent because I had absolutely convinced myself that I had put my name down to speak in this debate, only to realise too late that I had not, so I am grateful for the opportunity to make a brief contribution in the gap. I would like to use part of it, of course, to thank the clerks and officer support that we had during the inquiry, in particular our clerk Kate Wallis, our policy analyst Andrea Ninomiya, Sarah Carrington, who organised the committee operations so very well, and Dervish Mertcan, who reached out to our global press audience. I should mention the people we take for granted to some extent: the engagement team and, particularly, the technology team. I have now realised after three years, nearly, of chairing the committee that we take for granted the fact of all these wonderful people organising our room, our technology and everything, and we never thank them, so I would like to do that today. Of course, our external specialist adviser Dr Lucy Montague is an expert on this subject and made a real difference to our deliberations.
This is only a short contribution. The contents of the report and of the Government’s response have been aired thoroughly in the course of the debate, so perhaps I can turn myself briefly to a slightly different topic. The right reverend Prelate the Bishop of St Albans referred to the degradation of the high street consequent on the presence of so many betting shops. I was watching BBC News only a few weeks ago when it did a report, spread over several bulletins, of even greater degradation on the high streets. This involves the takeover of many of our high streets, not necessarily in pleasant county towns, but in many of our cities, by so-called barber shops, which never have any customers, and mini-markets that never sell anything, or they do because if you want to get some illegal cigarettes, with no tax paid, obviously—that is taken for granted—often imported cigarettes with no recognisable branding, which could contain anything at all, then that is the place to go. You will get them for a couple of pounds a packet, way below the price that you would pay for a legitimate packet of cigarettes. That is their main business —that and money laundering. The fact that they are so inherently profitable on the proceeds of criminal activity means that no legitimate business can compete with them in terms of paying rent.
We see this in the heart of London. You see premises of this character even in Oxford Street, which is meant to be our showcase high street—our showcase retail street—for the nation. The news bulletin on the BBC showed raids being carried out by local trading standards officers, but I think behind them were His Majesty’s Revenue and Customs and the National Crime Agency to some extent, so the authorities are aware. These are only the surface—the epiphenomena—of a network that brings crime and misery internationally. I hope that when the Minister replies he will be able to say that the Government are cognisant of what is now a serious threat to many of our high streets and that action will be taken across a broad front, not simply occasionally for the benefit of TV cameras, although I do not mean to deprecate in any sense the effort that was made to bring enforcement on that particular occasion. I hope that this will be carried out on a broad front, because it is a profound threat to our high streets and one that, sadly, the committee did not have an opportunity to explore, so I am glad to mention it now.
Baroness Scott of Bybrook (Con)
My Lords, I draw attention to my interest on the register as vice-president of the Local Government Association.
The Built Environment Committee’s report makes wide-ranging and thoughtful recommendations to the Government on how best to support our high streets. These include improving bus networks and parking, supporting local markets, encouraging greater business involvement in high street management and simplifying business rates. I thank my noble friend Lord Moylan for chairing the committee and my noble friend Lord Gascoigne for presenting the report today.
Many of the funds and initiatives referenced in the Government’s response, such as the high street rental auction, high street accelerators, the city region sustainable transport settlement and the private parking code, were in fact introduced or legislated for by the previous Government, who had a strong record on supporting high streets. We supported businesses, particularly high street businesses, through the Covid 19 pandemic with a comprehensive £400 billion package. We supported towns through the long-term plan for towns, which the current Government have since withdrawn. That plan committed £1.1 billion to 55 towns across the UK, empowering local communities to develop locally led town plans shaped by community leaders, employers, local authorities and Members of Parliament. We supported high street generation through a suite of wider funds, including the £4.8 billion levelling up fund, the £3.2 billion towns fund, the high street task force and the £150 million community ownership fund.
I turn to the conclusions and the recommendations of the report. These were wide-ranging and covered several key areas relevant to the vitality of the high street. The first recommendation calls for improvements to public transport connectivity, particularly bus networks, and for more efficient and accessible car parking. I note that this was actively pursued by the previous Government, culminating in the launch of the private parking code, which was finalised in May 2024 and came into force in October that year, following significant work with the industry.
The committee also urged continued support for local market traders and recommended that the local authority-operated markets outside London be granted business rates relief. The Government claim that their new approach meets their manifesto commitments, but I must challenge that claim. The manifesto pledged to
“level the playing field between high streets and online giants”,
yet the policy in question levies additional taxes not on online giants alone but also on high street retailers, large department stores, supermarkets, football stadiums and others. These are not online giants. This approach risks further burdening those the Government claim to support. These are the things that keep our high streets thriving and surviving.
I turn to the section of the report concerning local businesses and regeneration. The Government’s first Budget left business confidence at its lowest point in two years. According to the British Chambers of Commerce, only 49% of companies surveyed in the first quarter of 2024 expected an increase in income over the coming year. This should be a concerning indicator. In light of this, the Government must consider how best to support, though not mandate, the development of business improvement districts. BIDs have shown that they can drive local growth and community involvement, but there is a lot of scope to do even more. The Government should explore whether the BID model could be strengthened by expanding participation to include community representatives, ensuring a broader, more inclusive voice in local regeneration.
The next recommendation rightly highlights the importance of public participation, saying that local authorities should ensure that residents are involved in the decision-making. This is essential if regeneration efforts are to reflect the real needs and priorities of local communities. The Conservative Party agrees with the committee’s view that the Government must embed accountability measures into any new regeneration programme. I therefore ask the Minister to set out how the department intends to build on this principle. Specifically, how will local voices be ensured a place at the table in the design and delivery of future regeneration schemes?
We recognise the value of the Government’s funding simplification doctrine. This principle should be expanded to apply to all local authorities receiving multiple funding streams aimed at high street regeneration.
The committee rightly supports the continuation of the long-term plan for towns, particularly as it includes vital resource funding, not just capital. Any future programmes must adopt a highly simplified bidding process, enabling local authorities to focus on delivery rather than navigating bureaucracy. Will the Minister commit to simplifying the funding landscape and providing much-needed clarity on the future of regeneration programmes? Additionally, will he introduce a significantly simplified bidding process for any future high street or town regeneration funding? This would help ensure that local authorities can focus more on the delivery and less on the administrative burden, as I said.
I turn briefly to the commentary from third parties on the committee’s report. In August 2024, the Federation of Small Businesses published its report, The Future of the High Street, calling for greater support and innovative thinking to improve conditions for small firms operating on UK high streets. Notably, the FSB found that good transport links are essential, with almost 43% of small businesses stating this as a key factor for their success. In the light of this, what plans do the Government have to ensure that transport links in our towns are available, frequent and reliable?
The FSB also reported that around 49% of high street small businesses believe that parking facilities are poorly managed in their area. Will the Minister commit to a review of parking provision, particularly in poorly performing areas, so that we can improve accessibility for those travelling to the high street by car?
Finally, I leave the Minister with two further questions that speak to some of the most pressing concerns raised by the committee. First, how do the Government intend to improve the return on investment for high street and town centre projects that are currently underperforming? Secondly, how will the department support local authorities in unlocking the latent resource, expertise and community passion that remain under- utilised in so many of our communities?
I again thank the committee for its diligent and thoughtful report and acknowledge the valuable contributions of all noble Lords who have spoken in this debate or on that committee. I hope that we can continue to draw on the considerable expertise of this House to ensure that we do all we can to both support and revitalise our high streets.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Lord Khan of Burnley) (Lab)
My Lords, it is a privilege to stand before the Committee today to address the important topic of high streets and the findings of the Built Environment Committee. I thank the committee for raising this debate and for its insightful report. I thank the noble Lord, Lord Gascoigne, for his opening remarks, and congratulate him on his appointment, replacing the noble Lord, Lord Moylan, and filling what I see as big shoes. I thank the noble Lord for the work that he did in his role as chair.
This Government are committed to rejuvenating our high streets. We recognise the shifting tides of online and out-of-town retail, as well as the decline of local government funding by the previous Government, which have left our town centres depleted. However, like the committee’s report, the Government do not support a narrative of unmitigated decline, which serves only to sap confidence further. Instead, we should see the opportunities to reimagine high streets and to empower local places to deliver the right plan for their area. We must also recognise that high streets are symptomatic of wider issues in the economy and in society. To boost our town centres, we must address these root causes by investing in a stronger economy and in safer streets, as well as by empowering local leaders and communities to help town centres adapt to a world no longer dominated by physical retail.
That is why this Government are committed to transferring power out of Westminster and into local communities. The English devolution Bill will give local leaders the tools to kick-start their economies, as well as empowering communities to transform their neighbourhoods and high streets. We are expanding and deepening the powers available to mayors and strategic authorities. This includes integrated funding settlements for mayors who have a strong track record of delivery, as well as new powers over strategic planning to give all strategic authorities autonomy to plan for housing growth. Densified housing in our towns can address the need for homes, build new communities and support high street footfall.
We are also providing powers to help local leaders and communities take action to regenerate their area. One in seven high street premises currently stands vacant, yet our communities remain unable to retain vital assets. Community assets such as shops, pubs and community spaces have a significant role to play in developing social networks, encouraging community and promoting civic pride. Our “community right to buy” will empower local people to bring pubs and other important spaces back into the hands of the community, tackling the deep feeling of powerlessness felt by many in our society who care profoundly about preserving communities.
In addition, we are taking action against the familiar sight of shop fronts being boarded up and left empty for too long with high street rental auctions. The powers enable local authorities to tackle decline by bringing vacant units back into use, auctioning a lease to interested bidders and helping to make the high street more accessible and affordable for tenants, including small and medium enterprises, local businesses and community groups.
We recognise that businesses are vital to high street success. It is key that we create an environment in which they can flourish. To that end, we are making progress on reforming business rates. Parliament has now approved an Act enabling permanently lower tax rates for retail, hospitality and leisure properties from next April. This permanent tax cut will ensure that these properties benefit from much-needed certainty and support. We have also established a licensing policy task force to make recommendations to reform the licensing framework in order to foster a vibrant hospitality and night-time economy.
We will also take action to address the rise of anti-social behaviour, which can be so damaging to businesses and off-putting to residents. Through our neighbourhood policing guarantee and the creation of new offences in our Crime and Policing Bill, we will restore order in our town centres and empower the police to act against unacceptable behaviour. We will also provide more than £7 million in funding over the next three years to support the police in tackling retail crime.
I turn to the points made by noble Lords in the debate. I start with the points made by my noble friend Lady Andrews in relation to the plan for neighbourhoods. The Government recently announced the plan for neighbourhoods programme as a successor to the long-term plan for towns, which noble Lords referenced. The prospectus was published in March 2025; I commend it to noble Lords.
We are putting power into the hands of local people with our plan for neighbourhoods; the noble Baroness, Lady Miller, touched on this. This will address deprivation, regenerate local areas and unleash the full potential of places that have been overlooked for far too long. Neighbourhood boards are bringing together residents, businesses and grass-roots campaigners to draw up and implement plans for how they will spend up to £20 million of funding; this could be on repairing pavements in high streets, setting up community grocers that provide low-cost alternatives when shopping for essentials or establishing neighbourhood watches to keep people safe. We want to empower boards to tackle the root causes of disengagement and division, to bring people together so that they can feel proud of their area and safe in their neighbourhood, to restore a collective sense of belonging in their community.
My noble friend Lady Andrews asked me about the high street accelerators programme. This will now end in June 2025, at which point the Government will carry out a review of the programme to help inform future interventions on the high street. We hope that the current partnerships will evolve into sustainable teams that are embedded in the local area and continue to work on projects that help high streets to thrive.
The noble Baroness, Lady Miller, and the noble Viscount, Lord Hanworth, talked about high street rental auctions. We are proud to roll out this fantastic new tool to enable councils to reduce vacancy rates and the visual blight of empty shops. These powers are available to all councils to use right now, and we encourage them to do so.
To help with the initial implementation of the high street rental auctions, we have set aside a new burdens payment to cover costs, such as those borne through the notice and auction processes. Over £1 million of funding has been made available to support delivery for all local authorities in England to create high street vacancy registers and to support the cost of refurbishing vacant premises.
The noble Baroness, Lady Grey-Thompson, talked about accessibility and physical well-being. Accessibility is an important issue. I fully agree with the need for inclusive design embedding physical well-being into high streets. The plan for neighbourhoods offers communities the option to invest in measures to improve access and physical health.
A number of noble Lords, including the noble Baronesses, Lady Miller and Lady Scott, talked about transport accessibility. Effective transport is key to regeneration and plays an essential role in driving footfall to our towns and high streets. We have provided long-term funding to improve the transport network in local areas to transform and unlock regeneration opportunities. Local leaders will be empowered to choose the bus operating model that works for their area through the Bus Services (No. 2) Bill, which was introduced on 17 December 2024. This includes several options to improve bus services, such as franchising and establishing new local authority-owned bus companies.
On the point about funding support for local services, local government is vital for the delivery of the Government’s missions and it delivers more than 800 services to local people every day. This is the front line of public services; it deserves a government working alongside it, as equal partners in power.
Taken together, the additional funding announced by the Chancellor at the Autumn Budget and through the 2025-26 local government finance settlement will provide over £5 billion of new funding for local services, beyond local council tax. This includes an additional £2 billion in grants through the settlement, a guarantee that local authorities in England will receive at least £1.1 billion in 2025-26 from the new extended producer responsibility for packaging scheme and a further £233 million for homelessness services. We are delivering a settlement that aims to strengthen the foundations of local government by providing significant investment and redirecting funds to the services and places that need it most.
On the point made by the noble Lord, Lord Mair, about funding, we will set a refreshed approach to local growth funding at the spending review in the spring. This will include more integrated settlements over the longer term, with less central direction and more local choice. This is a point that the noble Baroness asked me about.
On public services and amenities, when it comes to new government services, we already consider broader benefits where appropriate and will keep further options for provision under review. Departmental spending proposals must follow the principles outlined in the Green Book, which is the government guidance on appraisal.
I move on to another point raised in my noble friend Lady Andrews’ comprehensive contribution, and by other noble Lords, about a small business strategy. This year, the Government will bring forward a small business strategy that will set out our plan to support SMEs, including consideration of how best to support our high streets to make sure that they are providing vibrant places for our communities and fertile environments for our businesses. The small business strategy will also boost scale-ups in growing the co-operative economy, making it easier to access finance, opening up overseas and domestic markets, building business capabilities and providing a strong business environment.
We also have a programme called Experience on Main Street, which promotes UK creative businesses that specialise in placemaking to decision-makers responsible for high street regeneration projects; these include retailers, local and regional government, real estate owners and urban planners. This is all to encourage the reimagination and revival of high street spaces by using creative services and products.
The noble Lord, Lord Mair, made some very interesting comments about markets. I agree that markets are an institutional part of the high street and provide local areas with a valuable community space. The Government recognise the role that markets play in providing access to good-quality, healthy and affordable food and in providing local people with opportunities for social engagement and inclusion. They can also help to build the local economy by boosting footfall and providing opportunities for entrepreneurs and start-up businesses to test new and innovative products. It is for local authorities and other market operatives to decide how best to operate and manage their markets. We encourage local authorities and market operators to continue to support market traders as they consider the best path forward to help markets thrive.
My noble friend Lady Andrews asked about business rates. The Government are looking at business rates reform in the round. We have already legislated to reduce tax rates on the high street, and the Chancellor will announce further plans for this in the autumn.
A number of noble Lords, including my noble friend Lady Andrews and the noble Lord, Lord Mair, discussed the use classes for planning. The commercial, business and service use class—known as use class E —groups together various uses, such as shops, gyms, restaurants, offices, and medical or health facilities, which means that planning permission is no longer required to switch between those uses. This change enables premises to respond quickly to how communities want to use their high streets, giving business owners and landlords the freedom to adapt swiftly to changing consumer demand. To respond to the noble Lord, Lord Mair, and my noble friend Lady Andrews, we will continue to keep planning use classes under review, to ensure that they meet the needs of our communities and businesses.
A number of noble Lords, including the noble Baroness, Lady Scott, my noble friend Lady Andrews and the noble Lord, Lord Gascoigne, asked for more clarification about parking. We know that the practices and behaviours of parking operators need to change. The Parking (Code of Practice) Act 2019 places a duty on the Government to prepare a code of practice containing guidance about the operation and management of private parking facilities. This Government are determined to drive up standards in the private parking sector and will announce their plan for the new code in due course. Parking is the responsibility of local authorities, and this Government are keen to empower them to make decisions about their local areas, since they are best placed to consider how local needs can be effectively met through their local transport plans.
The noble Lord, Lord Mair, talked about arts and culture and about adding colour to our town centres and high streets, which shape and reflect society and are enjoyed by people in every part of our country. We announced over £270 million of investment for our arts venues, museums, libraries, and heritage sector. We also recently announced an £85 million creative foundations fund to help arts and cultural organisations, with varying scales of need, to resolve urgent issues with their infrastructure.
The right reverend Prelate the Bishop of St Albans and the noble Baroness, Lady Miller, discussed parish councils. We absolutely recognise that town and parish councils have an important role in improving the quality of life and well-being of their communities, and in creating places where people are proud to live. They are close to the communities they serve, know their communities’ needs and can champion the priorities of local people and design the right services that work for their places. The Government are committed to building stronger communities where people feel proud of their neighbourhoods and actively contribute to their development.
The noble Lord, Lord Moylan, raised money laundering. To be profoundly clear, I assure him that we take this very seriously. That is why we are building up local enforcement capacity and smashing the gangs. We will continue to look at what more we can do in this area.
I thank all noble Lords for their contributions to the debate. High streets arouse strong emotions. This Government recognise the challenges that high streets face and welcome the spotlight shone by this report. With the right actions and the right leadership, we can make a different future for our town centres—a future that is more sustainable, more resilient, more connected and more aligned to the way we live our lives today. How will we achieve that? I have outlined some of our policies, but let me summarise them.
From Burnley to Pendle, our town centres need a purpose and a vision, linked to jobs and amenities and tied into a wider local growth plan. This Government are making this possible by pushing powers and funding out of Westminster, delivering the devolution that is required to transform the prospects of our towns. Alongside this, we are fixing the fundamentals: boosting local government funding; giving a permanent business rates cut to retail, hospitality and leisure; deregulating our cumbersome licensing laws; and investing in skills, jobs and infrastructure up and down the country.
We are also wasting no time in showing people real, visible improvements now. That is why we are putting 13,000 neighbourhood officers on the streets, making new laws to tackle anti-social behaviour, giving councils new powers to force open vacant shops and giving communities a right to buy valued assets such as the local pub. Through the plan for neighbourhoods, we are giving the most deprived places funding to clean up their high street or give it a makeover.
In summary, we are committed to fixing the foundations of the economy on which our towns depend, while giving local people the tools to revitalise their communities now. This is an exciting agenda which the Government are so proud to be delivering. My noble friend Lady Andrews referred to “imagination, leadership and innovation”, and that is exactly what the Government are providing.
I thank the Built Environment Committee again for an excellent report, and all noble Lords for their wise contributions to this important debate. I thank particularly the noble Lord, Lord Gascoigne, who I know will do a brilliant job because he is from a smashing part of the country—Lancashire; he is my neighbour, in Pendle. It is great to be responding to him, as he is chair of the committee.
Lord Gascoigne (Con)
I thank the Minister for his warm words; he is clearly a long-lost cousin or brother from another mother. I thank those on the two Front Benches—the Minister and my former boss, when we were last in Government—for answering the debate from the Dispatch Box. I also thank the former committee members. It is slightly unnerving having my predecessor lingering at the back, but I thank them both for speaking.
I thank the noble Baroness, Lady Grey-Thompson, who, as ever, was both powerful and striking in the points that she made. I will also say something briefly about the right reverend Prelate the Bishop of St Albans: today is not his valedictory speech, but it will be one of his last commitments in this House. I thank him for his service and his time on many debates—this one in particular—and I genuinely wish him well.
It has been a first-rate debate on the back of what I believe to be a first-rate report. There have been some really good points raised, many of which were in the report but are not exclusive to it: the importance of high streets; the complexity of funding; changing high streets over time; rural communities; the use of class E; rates and revenue; and, crucially, the opportunities. My final point is where we ended on the first one, and I am pleased to hear what the Minister said.
I understand that the Minister is very close to Angela Rayner, the Deputy Prime Minister, and on the back of this debate, I implore him to take it back and tell her it was not just another report, it is actually an opportunity that people in this Chamber and beyond care about. Many people have spoken to us about it. There are some really good ideas, and I think there is a huge opportunity here for the Government to inspire and empower, but also to change and put high streets back into the centre of people’s lives once again. With that, I thank noble Lords very much.
Methane (Environment and Climate Change Committee Report)
(1 day, 18 hours ago)
Grand CommitteeRead Hansard Text Read Debate Ministerial Extracts
Baroness Sheehan
That this House takes note of the Report from the Environment and Climate Change Committee Methane: keep up the momentum (HL Paper 45).
Baroness Sheehan (LD)
My Lords, it is indeed a pleasure, as chair, to debate the findings of the Environment and Climate Change Committee’s report, Methane: Keep Up the Momentum, about a devastating greenhouse gas 80 times more potent than carbon dioxide and one that is responsible for about 30% of global warming to date. Yet the evidence we gathered shows that the story is one that offers hope because methane, although very powerful in its warming impact, is short-lived and, therefore, if we can reduce emissions, we can substantially slow down global warming within decades, and with greater ambition we could start to cool the planet. Professor Piers Forster, interim chair of the Government’s advisory body, the Climate Change Committee, stressed that rapidly reducing methane emissions alongside addressing carbon dioxide could reduce the current trajectory of global warming from 0.25 degrees Celsius per decade to 0.1 degrees Celsius per decade, and that is a goal worth achieving.
The good news is that we already know how to capture, bottle and sell the emissions from two of the highest emitting sectors globally: oil and gas, and waste management. Emissions from agriculture are more challenging to capture, but there is light on the horizon to reduce them, as highlighted in the report. The key thing about methane, otherwise known as natural gas, is that it has value. We use it to heat our homes, cook our food and produce electricity. It is the transition fuel that will bridge our move to renewable energy, so why vent and flare it when we could harness and use it? This is what makes this report so important and one that the Government must not leave to gather dust, which is the fate of so many excellent Select Committee reports, but instead to use it to lend momentum to the already excellent, but currently stalled, record of reducing methane emissions in the UK and, importantly—and this is the crux of the report—to use our know-how, experience and ambition to leverage action internationally, as we have undertaken to do in the Global Methane Pledge.
We heard evidence that there is potential to scale up cutting-edge products of UK companies as they deploy innovative tools to measure, monitor and verify emissions. In short, with the right policy and regulatory framework we can support growth in our economy and generate jobs, while reducing methane emissions and keeping warming within the goals of the Paris Agreement to limit global warming to well below 2 degrees Celsius above pre-industrial levels and pursue efforts to limit it to 1.5 degrees Celsius. I hope that the Minister will agree to meet me so that I can introduce him to one such company in the space sector, where huge strides are being made to measure the intensity of methane emissions and locate them with pinpoint accuracy. This will be a game-changer.
The purpose of the report was to evaluate progress made on the domestic side to tackle the sources of anthropogenic methane emissions that are within the scope of the Global Methane Pledge and to get to grips with the potential for the UK to do more both at home and internationally where there is so much low-hanging fruit. Will the Minister state whether he has fully bought into the commitment of the Government led by Boris Johnson, when, at the COP 26 summit in Glasgow, they wholeheartedly supported the launch of the Global Methane Pledge to reduce global methane emissions by at least 30% by 2030 from a 2020 baseline? If the Minister is fully signed up to support the Global Methane Pledge, on what basis can he justify the Government’s refusal to publish their own methane action plan to provide clarity on priority actions for each sector? I hope he will not point to an as yet non-existent carbon budget delivery plan because that will not suffice. We ask for a clear, stand-alone document to encourage other countries to produce the same. Such an important intervention to combat the climate emergency cannot be buried in a wide-ranging document such as the Carbon Budget Delivery Plan, where one has to dig hard to discern the Government’s intent. The Minister may also point to these country’s co-chairship with Brazil of the Climate and Clean Air Coalition, the UN-affiliated organisation that provides a secretariat for the Global Methane Pledge. I am truly delighted that Minister Kerry McCarthy has taken up this role discarded by the US in January.
As my committee’s methane report makes clear, domestically we have made good progress in reducing methane emissions from the waste management and oil and gas sectors, but less so in agriculture. Residual emissions may be more stubborn and therefore more costly. However, it is the Government’s role to balance the cost of action with the cost of inaction over the long term. That point is made throughout the report.
I turn to the waste sector. The UK’s success in reducing methane from the waste sector was driven in large part by the landfill tax. Together with incentives from the renewables obligation scheme, which improved landfill gas capture, the UK saw a 76% decrease in emissions between 1990 and 2022. Colleagues speaking after me may wish to say more on the important issues of waste crime, the renewable obligation scheme, anaerobic digesters and other matters. I hope the Minister, however, will take this opportunity to reiterate his Government’s determination to bear down on upstream measures such as reducing food and packaging waste, given the greater stress that this Government are placing on moving faster towards a more circular economy. Our technical ability to tackle emissions from landfill sites is world-beating. There is much that we can share internationally. Later this year, COP 30 is taking place in Brazil, where there is opportunity to leverage our knowledge and expertise to work with Latin American countries as they consider their policy options for landfill gas capture. I hope we will lean into this with gusto and lend our expertise.
Moving to agriculture, almost half the UK’s methane emissions can be attributed to agriculture, all of it from livestock. The 15% reduction in emissions since 1990 can be attributed largely to reduced consumption of red meat. However, the committee heard that there are other viable methods for further meaningful cuts in emissions, such as improved animal welfare, selective breeding, methane-suppressing feed additives and better slurry management. Can the Minister assure me that Defra takes the issue of methane emissions seriously? Defra is not the responsible government department for greenhouse gas emissions and, therefore, methane reduction just does not seem to be high on its list of priorities. In their response to recommendation 10—that low-cost, long-term solutions must be prioritised, with supermarkets playing their part in reducing emissions from the food sector—the Government said:
“Alongside the upcoming food strategy and farming roadmap we will deliver a credible plan to decarbonise food and farming”.
Will the Minister say when can we expect to see the food strategy and farming road map?
Similarly, the Government are reviewing the regulatory framework that they inherited—thank goodness, because our report highlighted grave shortcomings in the existing framework. For example, I hope that the review will address the fact that there is no regulatory oversight of agricultural methane, apart from in some aspects of agricultural waste.
I move on to energy. In my view, one of the most important recommendations in the report is to,
“demand greater transparency and accountability of industry commitments to end the routine venting and flaring of methane”
by
“a publicly accessible roadmap and transparent data”.
This is something that the industry has committed to do, as was restated by the NSTA when it gave evidence to the committee. However, the Government’s response did not address the points about transparent data or a road map for the industry; perhaps the Minister could take this opportunity to do so now.
I say this because international emissions from the oil and gas sector continue to grow, yet the gas that is routinely vented and flared could be captured and sold. Professor Steven Hamburg of Environmental Defense Fund told the committee that oil and gas have “enormous potential” for methane reduction globally. He also said:
“That is not low-hanging fruit; that is fruit lying on the ground”.
Can the Minister provide an update on progress in how methane from the upstream oil and gas sector could be included in the ETS scheme? I hope that progress is being made on that.
In concluding, I stress that the report would have been challenging to get over the line in the best of circumstances. However, during it, we lost our policy analyst, Flo Bullough, midway; we then lost our clerk, Emily Bailey Page, towards the end of the report’s finalisation. Such talented people will always be in demand. I would like to put on the record my gratitude to them for their sterling input. I must thank wholeheartedly all those who stepped into the breach, including Tom Wilson, the principal clerk of Select Committees, the incoming clerk, Andrea Ninomiya, and our policy analyst, Lily Paulson. They were magnificent in picking up the baton and ushering the report over the finish line, and I thank them all once again.
This report holds the dubious record of being the longest-debated report to be produced by any House of Lords committee, which will give your Lordships a flavour of the divergent views of the committee. I wholeheartedly commend my colleagues on the committee for the unfailing courtesy with which all discussions were undertaken. There is real value in bringing together the threads of different viewpoints in a report that all members felt able to sign up to and one of which I, for one, am very proud. I beg to move.
Lord Grantchester (Lab)
I open my remarks today by thanking the noble Baroness, Lady Sheehan, for the excellent way in which she chaired the committee throughout a rather tricky period over the election and change of Government last summer. The committee also changed its policy adviser and support clerks during this inquiry, yet its coherency hung together with its themes and approach. I thank Flo Bullough, who set off with the committee as its policy analyst, and Lily Paulson, who saw us to a safe conclusion. I also thank the clerks to our committee, Emily Bailey Page and Andrea Ninomiya. I declare my interests as recorded on the register, notably activities on a dairy farm, with agriculture featuring prominently and extensively in the report.
The committee benefited from a very divergent membership—not only in being cross-party, of course, but from hearing a wide range of experiences and opinions regarding climate change and the role of the Government in mitigating methane emissions. I am told that the number of meetings needed to resolve drafting issues set a new record high and certainly prolonged publication, yet I am pleased that the committee was able to agree unanimously to a final wording, despite many reinterpretations. This was in no small measure due to careful handling by our excellent chair.
The noble Baroness, Lady Sheehan, has given an excellent account of the committee’s findings and recommendations. We received many detailed scientific papers and had many interesting witnesses give evidence. I draw attention to the important contribution given by Professor Myles Allen from the University of Oxford on understanding the different nature of methane as a greenhouse gas, the importance of how it differs in its effects from carbon and, therefore, the importance of various methods of measuring and reporting on it between GWP100—that is, global warming potential 100—as against GWP* and GWP20.
Understanding this, I found it disappointing that the Government chose to reject our important recommendation 2, to publish a methane action plan in support of other government plans and strategies, stating that this was covered already in the existing five-year carbon budgets. The proposed updated plans for the latest carbon budget, with the 2030 NDC—nationally determined contribution—contributing to the Global Methane Pledge, will certainly be meaningful. However, it would also have been worth while to outline in a comprehensive individual action plan vital steps that could be interpreted as methane actions.
Part of this focus that such an action plan could embrace would be the improvement in monitoring and verification, both nationally and internationally. The Government’s action here is welcomed, in their response to the committee’s recommendation 3 on the establishment of an international body to assess and report the methane action plans of the pledge’s participants. Nationally, a more concerted structure proposal for sector monitoring is beginning to take shape, especially in the agricultural sector. That agriculture is beginning to look exposed, as the sector finds it most difficult to make meaningful reductions and progress, became a large part of the committee’s investigations for solutions.
While the committee examined other sectors in the report, I will concentrate my remarks on the agricultural sector. The Minister will be aware of the important work being done by his department on emissions measurement, monitoring, reporting and verification improvements. Within agriculture, the levy-funded pilot project to showcase the importance of an on-farm environmental baseline is being undertaken by AHDB—the Agriculture and Horticulture Development Board. The aim is to create a nationwide standardised dataset across the various sectors within agriculture to enable more accurate reporting of emissions from the bottom up—that is, at farm level—in the environmental impact of agriculture. This is important to reveal the true net carbon position on the balance of emissions and carbon removals through farm coppices, woodlands and other features, which would also include carbon sequestration potential.
The outcome could be instructive as a dataset to show the range and variety of results from individual farms to allow the industry to move away from relying on national and international averages. Does the Minister agree that, in targeting agriculture as being most in need of methane reductions, providing a more accurate reflection of its position and progress towards net zero is an important part of his department’s greenhouse gas emissions monitoring and verification programme? Can he confirm that agriculture’s progress is part of the GEMMA—Greenhouse Gas Emissions Measurement and Modelling Advancement—programme?
Farming’s impact on the environment is amplified by the lack of accurate farm-level data. The evidence to the committee from Professor Dave Frame, professor of physics at the University of Canterbury in New Zealand, that all farmers should “know their numbers”—namely, have data on their farm’s impact—was very revealing. Here, I draw attention to the go-to guide produced by the Innovation for Agriculture on behalf of WWF and Tesco. Valuable information could be provided through farmer data collected as part of the NFU’s Red Tractor assurance scheme. I request that the Minister feeds this to his Defra colleagues in their review of the sustainable farming incentive, which is relevant to our recommendation 15. For example, Tesco was also involved in the research of the feed additive, Bovaer, and runs important carbon footprint monitoring of farms.
ForFarmers also undertook research on Lintec made from a Pacific variety of linseed to enhance bovine health, fertility and sustainability. Costs are prohibitive for livestock producers at the moment. Can the Minister update your Lordships’ House on the dairy demonstrator project, which is in our recommendation 12? I am also aware of the UK Dairy Carbon Network project, which is also funded by Defra and being undertaken by AHDB and AgriSearch. How do these complement each other?
I am grateful for the evidence about the selective breeding improvement programmes provided by Drew Sloan of Semex. Costs and risks are already being shared appropriately across government and industry. It is now imperative that the Government look to improve communication, through the proposed land use framework, to integrate the rural dimension with wider challenges on the demands for infrastructure, housing and growth. The report also embraces methane in its wider applications, with waste management and emissions extending into the offshore oil and gas industries. It underlines the importance of not only reducing emissions but capturing them for beneficial use.
This is a very important report to which the Grand Committee will need to return as progress continues towards 2030 and beyond.
Lord Trees (CB)
My Lords, it is a pleasure to be a member of this Select Committee and to speak here today. I thank our chair and our excellent staff who support our committee; they really have been outstanding. I have no major interests to declare except that I am a veterinarian and a co-chair of the All-Party Parliamentary Group for Animal Welfare. I have no financial interests of relevance.
I will concentrate on the contribution of UK agriculture, and specifically ruminants, to methane emissions, because they are such a significant part of our total anthropogenic methane emissions. We have already heard that methane is an extremely potent greenhouse gas, but it is short lived: it remains in the atmosphere for about 12 years, compared with CO2, which remains for hundreds if not thousands of years. This is critically important: constant emissions of CO2 accumulate and increase global warming, whereas constant emissions of methane stabilise at equilibrium after a few years and warming stabilises. Crucially, reducing methane emissions results in cooling, so major global reductions in methane emissions provide a unique opportunity to slow the pace of global warming in the short term, while CO2 reduction and removal technologies can be further developed.
Globally, methane emissions are rising, which is very disturbing. However, I am pleased to say that in the UK our methane emissions are not rising; in fact, there has been a significant reduction of over 60% since 1990. However, reduction within agriculture has been relatively small. Agriculture is now responsible for approximately 50% of the UK’s anthropogenic methane emissions, virtually all of which is from ruminants, particularly cattle.
Different metrics are significant in understanding the impact of methane and formulating policy. Internationally, the metric GWP100 is used to quantify the global warming potential of different greenhouse gases over 100 years within different sectors. However, it can misrepresent methane’s warming impact by not considering its short-lived nature in the atmosphere. In a nutshell, GWP100 overestimates the impact of constant methane emissions by threefold to fourfold, underestimates the impact of newly emitted methane by fourfold to fivefold and fails to account for the cooling effects when methane emissions reduce.
To address these limitations, scientists, in particular at the University of Oxford, have developed GWP*, which better accounts for the short-lived nature of methane in the atmosphere. Experts differ on the pros and cons of GWP100 and GWP*, but comparisons emphasise how significantly the way in which data are analysed and presented can influence policy and priorities. For example, the emissions warming potential of a unit of beef estimated using GWP100 is three and a half times greater than when utilising GWP*. For this reason, our report recommends that
“the Government should … consider how additional metrics can be robustly employed at the sectoral and the business level to improve understanding of the UK’s emissions”
and
“move towards unilaterally implementing an auxiliary metric to better reflect the warming impact of methane”.
However, in their response to our report, the Government remained unconvinced on fully supporting the use of GWP* to assess agricultural emissions, which I regret; I think that it has a role to play in understanding the problem we have.
A second metric of importance is methane intensity—that is, the amount of methane or its CO2 equivalent per unit of productivity. Data based on FAO figures show that, for example, a kilogram of protein can be produced from cattle in the UK at a quarter of the CO2 equivalent emissions of the global average. In general, although our beef and dairy industries are significant emitters of methane, they are lesser emitters compared with other countries from which we may import beef and dairy products. The issue of importation is particularly relevant in relation to the recent US-UK trade agreement, for example, and other agreements to be negotiated; our Select Committee report makes these important points very clearly.
I turn to mitigation, where there is good news. There is a lot more that we can do in the UK to further reduce methane emissions from our ruminants. We have some of the world’s best experts in methane monitoring and abatement, as we have heard, and we have highly innovative and progressive farmers. However, as our report highlights, the Government have a role in setting this as a priority for agricultural support. It is regrettable that the sustainable farming incentive has been paused, especially since the Agriculture Act 2020 explicitly provided that, in the transition from the CAP, the Secretary of State could support climate change mitigation measures.
This is not just about finance, although that is important. Much could be achieved by the Government setting clearer goals, providing consistent advice and technical support, and encouraging peer-to-peer knowledge transfer to address methane emissions and to ensure that all of our farmers are adequately equipped with both knowledge and a desire to something about it. In their response, the Government acknowledged that there may be benefits to a targeted approach for agriculture to better incentivise methane reductions; we look forward to seeing evidence for this. Most measures to increase productivity will reduce emissions per unit of production. Improved health and disease control, smarter management such as reducing calving intervals, nutritional measures and breeding for reduced methane emissions—methane output is a heritable trait—are all achievable means that increase profitability and productivity, as well as reducing methane emissions per unit of production.
With reference to breeding, new genetic technologies, as provided for in the Genetic Technology (Precision Breeding) Act 2023, could rapidly advance progress. As was referred to earlier, feed additives such as Bovaer show promise. This product has recently been approved for use in the UK by the Food Standards Agency, and I note that some governments in Europe already subsidise farmer application of this product.
The Dairy Demonstrator project—now branded as the UK Dairy Carbon Network and launched in February by the current Government—will include support for participating farms to investigate and trial various emission mitigation methods. It is to be welcomed; I congratulate the Government on that.
Substantial improvements in endemic disease control —for example, better application of current vaccines—are technically possible now that we have the necessary products to improve emission intensity. The introduction by the previous Government of the animal health and welfare pathway is to be welcomed; it can make a positive difference.
Impacts on slurry and manure cannot be ignored as they are responsible for about 7% of the total anthropogenic methane emissions and affect all livestock species. A number of abatement technologies are applicable, including covering slurry tanks and anaerobic digestion of the waste. Given that farms are often small or medium enterprises, major capital improvements require co-operation among farmers—and, probably, some financial support—but those investments could yield significant benefits in reducing methane release.
In conclusion, in the UK, ruminants fed mainly on grass in one form or another produce healthy and nutritious food but also about half of all of the UK’s anthropogenic methane emissions. However, the estimate of the warming potential of these emissions varies by more than threefold depending on which metric is used. Moreover, current data show that greenhouse gas emissions per unit of production for both beef and dairy are substantially lower in the UK than most other countries. However, there is much that we could and should still do to reduce our methane emission intensity. In many cases, the technology exists but there needs to be consideration of cost-benefit ratios to achieve full implementation.
The bottom line is that we must guard against destroying our own livestock industry, which is relatively environmentally efficient, and the inevitable consequence: importing more meat and dairy produced with poorer environmental efficiency and greater emissions elsewhere.
The Earl of Leicester (Con)
My Lords, I had the honour of joining the Environment and Climate Change Committee just as it embarked upon this inquiry into CH4, which, as we heard from many of our American witnesses, is something called methane.
Let me share a useful analogy with noble Lords. In January 2020, I attended the Oxford Real Farming Conference, where one of the seminars discussed methane emissions and cattle. Methane was like the school bully who, on your first day at school, punches you in the face: Christ, it hurts, but you soon get over it. Carbon dioxide, on the other hand, was more like a malevolent teacher who takes an instant dislike to you on day one and plagues the rest of your educational career throughout your time at school.
We should be proud that our country has led the world on methane reduction; indeed, between 1990 and 2020, we reduced our methane emissions by 62%. Currently, the UK is responsible for just 1% of global emissions—and falling, albeit slowly. That is about 1.5 megatonnes of methane. China is responsible for nearly 70 megatonnes, and rising fast.
Before I go any further, I should pay tribute to our wonderful clerks, who, as our chair elaborated, had to change. They were always professional, hard-working, diplomatic and ready to listen to committee members’ suggestions as to who might be invited to give evidence as expert witnesses. This is an important factor because, too often, it is tempting for clerks to invite those who make the most noise: lobbyists and activists; or, perhaps, their own kith and kin, in the shape of civil servants in government departments whose work is centred around the inquiry’s subject matter. Of course, for obvious reasons, it is essential to invite academics who study the said subject.
Make no mistake, I am very happy to listen to all of the above; indeed, their evidence was essential. However, sadly—for it is often they who can provide the solutions—all too often it is the people who do not get invited who are those folk at the sharp end: the practitioners. They are the people who actually undertake the work, and whose experience of what works and what does not is the most valuable.
I was very grateful to the clerks and the chair, who supported my suggested witnesses, often from the private sector, agriculture and the Agriculture and Horticulture Development Board, particularly Professor John Gilliland, who is an innovative farmer in Northern Ireland. I state my interests, as set out in the register, as a regenerative farmer and landowner in north Norfolk, with a large herd of suckler beef cattle and the ownership and management of the largest, and arguably most important, national nature reserve in the country, Holkham NNR. I shall return to that at the end.
As agriculture is the largest source of domestic methane emissions in the UK, at 49%—and is the sector I understand most—I shall limit my comments to this area. Some 85% of these emissions come from the enteric fermentation process within a cow’s stomach. For the sake of clarity, the vast majority of methane is emitted from the front, not the back, end of a cow, and then a further 15% is emitted from slurry manure. As our chair has mentioned, it is also important to note that we are harnessing methane very successfully in agriculture through the increasing number of anaerobic digesters in the UK, which mimic a cow’s stomach on a much larger scale, capturing the methane and pumping it into the national grid. Crucially, given what happened in Spain recently, this provides a baseload form of energy supply.
It is important to note that globally between 1990 and 2020 it is believed that agricultural methane emissions increased by approximately 12%. Most of this came from less developed countries where populations have increased rapidly and where a gradually improving economic situation has increased the demand for meat in people’s diet. The inquiry looked at various solutions for reducing emissions. The noble Lord, Lord Trees, mentioned diet, feed additives, such as Bovaer, and cattle health, which are very important. Two weeks ago, on a field trip to the Netherlands for our nitrogen inquiry, we saw some really good manure and slurry management which reduces methane emissions.
I have difficulty with the recommendation to reduce the number of large ruminants—by that, obviously, I mean cows. It is true that in the West and the emerging East we all eat too much meat, but we get into very dangerous territory when we start telling people how much meat they can eat. We should, of course, try to educate people on these matters. We must also question the figures emanating from the UN on the standard UN cow used in all methane calculations. A feedlot Hereford bullock eating a diet of maize is very different from an extensively grazed Galloway heifer eating grass all its life, which itself is very different from a Brahman cow in India. There are huge differences in diet, size, length of life and doubtless many other factors. The noble Lord, Lord Trees, made very important points regarding the differences between GWP100 and GWP*.
It is also true that Henry Dimbleby, in his national food strategy, showed that the total biomass of farmed animals has increased by a huge factor since 10,000 BC, when only 2.5 million humans were a tiny proportion of the total biomass of wild animals. That was at the start of the Holocene epoch, when global temperatures entered an unprecedented period of stability and agriculture became possible. Today, the combined weight of all livestock bred for human consumption dwarfs that of the combined weight of all wild mammals and birds, and even adding the combined weight of the now 7.8 billion human population and our domesticated animals, such as pets and horses, it is still much smaller than that of the livestock that we are producing for human consumption.
We clearly have a number of problems: a burgeoning population, leading to a problem of how to feed the world, which we are pretty good at—although we are doing it in perhaps too intensive a way that is not helping biodiversity, et cetera; some of the food is grown in the wrong place; and we have plenty of inequality. Some 50% of the world’s habitable land is put down to agriculture, but of that, 77% is down to either livestock or, pertinently, the production of crops to feed said livestock. In the UK, that figure rises to an astonishing 85%, according to Dimbleby’s food strategy report, although that is partly down to our hilly topography, high rainfall in the west and our temperate climate, which promotes exceptional grass growth. Let us not forget that well-managed, diverse grasslands are very effective carbon sinks, pulling carbon dioxide out of the atmosphere and sequestering free nitrogen in the ground. Grassland is an important tool in the fight against climate change, and we should be careful when we recommend excessive tree-planting schemes— I apologise for the slight diversion.
With regard to methane emissions from cattle, we heard from some eminent academics who favoured beef cattle reared in huge feedlots in the USA and Australia, suggesting that because they were being reared on protein-rich diets and thereby putting weight on quicker, and thence being taken to slaughter quicker, over their shortened lifespan they emitted less methane. That is true, but only in isolation. Where did all that food come from? I have just mentioned the percentages of land use—vast acres growing cereals and maize in the USA, and vast quantities of soya being imported from South America. All those feedstuffs are grown with huge tonnages of nitrogen artificially produced using the Haber-Bosch process, which is heavy on energy consumption, with resultant carbon dioxide emissions leading to excess nitrogen pollution, the subject of our current inquiry. Some 50% of nitrogen applied to fields is lost through leaching into watercourses and into the atmosphere. Further, all are cultivated with large machinery emitting another pollutant, nitrous oxide.
In Britain, where we rear beef cattle for human consumption, the vast majority of animals are extensively reared outdoors for six to eight months when the grass is growing, which is all they eat during that time. Hardier breeds such as Belted Galloway, Blue Grey and Highland cattle spend all year outside. They are an essential component in the carbon cycle and the facilitation of healthy biodiversity.
I return to the nature reserve and the cattle. At home, we have to manage the NNR within strict parameters given to us by Natural England. Yes, the cattle are emitting methane while they chew the cud, but they are also chomping the grass to the correct sward lengths—through careful management as to how long they stay on a particular freshwater marsh, how much grass they eat and how low they eat it to—by which these differing heights and conditions of grassland allow a rich assemblage of differing visiting breeding birds, such as waders, waterfowl and raptors, including marsh harriers, to breed. Of course, their muck returns natural nitrogen to the ground, among other organic matter, and provides essential habitat for dung beetles and all manner of insects at the bottom of the food chain to breed, thereby starting the whole cycle over again and supporting all life.
As we are learning in our current inquiry into nitrogen, reducing emissions is a complicated job. If one concentrates too hard on one reduction, then the law of unintended consequences often leads to an increase in another area.
Lord Jay of Ewelme (CB)
My Lords, I am delighted to be a member of the Environment and Climate Change Committee under the excellent and expert chairmanship of the noble Baroness, Lady Sheehan. I joined the committee just as the report was being finalised, so I regard myself as a methane learner rather than as a serious contributor to this excellent report. However, I was struck by two things. The first, as some others have mentioned, was the sheer potency of methane, which is 80 times more potent than CO2 but with a much shorter lifespan, remaining in the atmosphere for around 12 years compared to CO2 remaining for up to 2,000 years. This means that curbing methane production is a highly effective way of reducing global emissions overall, as the noble Lord, Lord Trees, has eloquently said.
The second striking point was how much methane emissions had already been reduced in this country and how much harder it will be to reduce emissions in future—hence the report’s title, Methane: Keep Up the Momentum.
As for our recommendations, I want to focus on only two things. First, I really do think that it would help if the Government were to publish a methane action plan in order to show clearly, both here in Britain and to others, our determination to take the necessary action. It disappointing that the Government have rejected that recommendation. Can the Minister confirm that the updated plan for carbon budgets will set out in detail key methane policies for the period up to 2030?
Secondly, we must do all we can to encourage other countries to reduce methane emissions. In particular, it is disappointing that, since the 2021 Global Methane Pledge was launched under the UK’s COP presidency, global methane emissions have continued to rise; and that the 2021 methane pledge looks increasingly unrealisable. Reversing this trend will be all the harder now that the Americans have left the field; indeed, at times, they seem to be tearing up the pitch. The Minister will, I hope, confirm that the UK will reinforce its efforts to persuade others to honour their objectives, working with like-minded nations and groupings—including the EU and New Zealand—in particular at COP 30.
I shall now focus on a slightly broader point. The overall context for countering climate change has become quite a bit bleaker since we wrote our report. Wars proliferate. The United States has, as I said, left the field. But the challenges are as difficult and important as ever. The Climate Change Committee’s recent assessment that the UK’s preparations for climate change are inadequate gives us all at least pause for thought. I hope that the Minister will give us his views on that assessment as he winds up. In a democracy, it is never easy to take tough decisions now to benefit future generations, but that is the responsible thing to do. Future generations will not look kindly on us if we fail. Can the Minister confirm that the Government remain utterly committed to reaching net zero by 2050 and to meeting the new target in this year’s nationally determined contribution?
I have one final point to make. This morning, a friend asked me what I was going to do today. I said that I would be speaking in a debate here in the House of Lords on methane. “Oh God, how boring”, she said. I disabused her, of course, but she hit on a rather crucial point. There is a huge gap between the readily understandable goal—cooling the planet over the next 50 years or so, saving millions of lives—and what are for many people the numbingly boring details needed to achieve that goal, including aerobic digesters and changes in cattle feed, important though they are. Can the Minister confirm that the Government will do all they can to close that gap and, in their communications, to link the measures with the goal?
Lord Ravensdale (CB)
My Lords, first, I declare my interest as a chief engineer working for AtkinsRéalis. I thank the committee’s chair, the noble Baroness, Lady Sheehan, for all her work in steering the committee through this inquiry and for her excellent introduction to the debate. I also thank the committee and its staff, who worked really hard to produce an important report that sheds light on an important and often underappreciated facet of climate policy.
Methane is actually a really interesting technical problem due to its impact across many sectors and one that the UK has had considerable success in tackling, as other noble Lords have said. Given the comprehensive remarks from other noble Lords, I will focus on only a few areas.
To begin with, it is worth restating some of what the noble Lord, Lord Trees, said about metrics and measurements: they are central to the consideration of methane because of its nature as a flow gas rather than a stock gas. If a constant amount of methane is being emitted into the atmosphere, the warming impact will be a one-off hit. To a first approximation, the methane breaks down in the atmosphere as quickly as it is being replaced over the medium term. This is different from the nature of CO2, which remains in the atmosphere for centuries, and therefore warming will increase over time for a constant source of emissions.
This leads us to problems with trying to apply a global warming potential to methane as a comparison to CO2 by using a single metric, which has been the approach undertaken so far. Currently, the UK uses Global Warming Potential 100—GWP100—which is a comparison over a 100-year horizon. Analysing methane using this metric leads to a GWP of 28 for methane; in other words, it has 28 times the warming impact of CO2. However, this figure misses the complexities in methane being a flow gas rather than a stock gas. It is worth restating what Professor Myles Allen said during our inquiry, that
“expressing methane emissions as a carbon dioxide equivalent using GWP100 overstates the warming impact of a constant source of methane by a factor of three to four and understates the impact of any new methane source by a factor of four to five”.
That illustrates that having a more nuanced view of the impact of methane emissions than GWP100 is critical for policy-making. Factors of three to five are not small discrepancies.
How the UK responds to climate change depends on a balanced assessment across emissions sources, so having a true understanding of the actual warming impact of emissions is vital. It is for that reason that the Select Committee recommended, in its recommendation 7, that the UK should unilaterally implement an auxiliary metric to better reflect the warming impact of methane and help shape effective policy in the UK. In my view, this is the key recommendation of the report, on how we view that data and how we look at those metrics. I hope that the Minister and his team can look again at the recommendation for an auxiliary metric, which would help us respond to the challenges around methane and other gases by ensuring that they are balanced effectively.
My second point is about regulation. We heard witnesses describe the complex picture around methane regulation, with overlaps between four separate regulators—the Environment Agency, the Health and Safety Executive, the North Sea Transition Authority and the Offshore Petroleum Regulator for Environment and Decommissioning—which cover agriculture, waste management and oil and gas. That is a complex regulatory picture, and in our questioning of the regulators we uncovered overlap and areas that are falling in the gaps between the regulators.
A good example of that is the Environment Agency. Witnesses from the EA stated:
“To be absolutely clear, we have no statutory duty around methane”.
It was clear from their evidence that this is a significant gap and affects how the sector is regulated. Looking more widely, this also chimes with the excellent Corry review recently commissioned by the Defra Secretary of State, which recommended that the statutory duties, principles and codes of Defra regulators should be consolidated to a core set, reflecting the Government’s priorities. If the EA and other regulators had a clear net-zero duty, this would provide important clarity and close gaps in the regulation of methane. It would also have wider benefits across the sector; for example, by streamlining the build-out of clean energy infrastructure. Can the Minister say what consideration the Government are giving to the important area of consolidating the regulators’ duties? This builds on the work that was done on Ofgem under the previous Government and through the Energy Act 2023.
The noble Earl, Lord Leicester, talked about complexity. My final point is about the importance of bringing in a systems approach to net zero to ensure that all departments and regulators are fully joined up in pursuit of this goal. Some important steps forward have been taken in this area, particularly in energy, but a 2020 report by the noble Lord, Lord Vallance, Achieving Net Zero Carbon Emissions Through a Whole Systems Approach, remains as relevant as ever. As well as recommendations on duties for regulators, as I have touched on, it includes proposals for an operational group to drive delivery across government and departments and, on the data side, for the establishment of an analytical hub. The methane issue, touching as it does many sectors and areas of the economy, is an excellent illustration of why a systems approach is required. I urge the Government to return to some of the points in the 2020 report to ensure joined-up delivery in this space and to build on the great progress being made.
Viscount Stansgate (Lab)
My Lords, I am very grateful for the opportunity to say a few words in the gap. I congratulate the committee on its report and the chair on her opening speech and on securing the debate.
Like the noble Lord, Lord Jay, I am a methane learner. I remember first discovering its importance in the late 1980s, when I talked to Sir Jack Lewis, who had been appointed by Mrs Thatcher as chair of the Royal Commission on Environmental Pollution and who later became a Member of this House. It struck me at the time that this concentration—80 times, as has been mentioned several times—was very powerful stuff. I think it is a 45% reduction that would help meet our Paris climate change target of 2030.
On the other hand, I am encouraged by some recent research. Last year, I came across something by Professor Vincent Gauci of the University of Birmingham. Apparently, microbes in tree bark in the world’s forests absorb much more methane than previously thought. Tree bark has previously been overlooked for its climate contribution. Apparently, if all the tree bark in the world was laid flat, it would cover the surface of the earth, so it represents a vast area for gas exchange between bark and atmosphere.
Scientific research these days is often about vast quantities of data generated in a wide variety of areas, of which climate change is one. Last Friday, I happened to visit the Harwell Space Cluster. Believe me, the sheer amount of data it deals with from earth observation satellites is phenomenal, as I am sure the Committee will appreciate. I make the point to my noble friend the Minister and others that it is vital to continue to collect this data. I will direct my remarks towards chapter 3 of the committee’s report, recommendation 7 and the Government’s response to it.
Ordinarily, to say something like “collect the data” would be neither unusual nor particularly interesting. However, we live in a time when things are changing. On 16 April, the US National Oceanic and Atmospheric Administration announced a whole list of datasets regarding ocean monitoring that will be removed by the middle of this month. On 23 April, the BBC reported:
“Swathes of scientific data deletions are sweeping across US government websites—with decades of health, climate change and extreme weather research at risk. Now, scientists are racing to save their work before it’s lost”.
This is a tremendously important point. I can give the Committee further examples. Apparently, somebody researching the history of the Greenland ice sheet is afraid that all the data related to it will be deleted by the American authorities one way or another. It may be that the data shows a different pattern of Greenland’s ice sheets in the past that would affect our calculation of the future.
My time is almost up, so my plea to my noble friend the Minister is that, when he takes part in discussions with other countries on behalf of the British Government—I believe there is a UNFCCC conference in June 2027 on the horizon—he will do everything he can to ensure that we continue to collect the data without which debates like this are not possible and without which we cannot measure and make the progress we need to make on climate change.
Earl Russell (LD)
My Lords, before I start my speech, I will reflect the comments that we have just heard. I did not manage to get into the noble Viscount’s Oral Question today, but I am deeply concerned about what the Americans are doing to the fundamental scientific basis for our understanding of climate, so I echo those comments.
As a member of this Select Committee, I speak in support of the report, and I thank our excellent clerks and researchers and everyone who made it possible, including our witnesses and our chair. If the noble Lord, Lord Jay, is a climate methane learner, at times I felt like a methane mediator. This was a difficult report to get over the line, but I am very pleased that we managed to do so. I also thank the Government and the Minister for their response. I note that we have a shared ambition in this area, if somewhat different approaches.
I will speak on the need for urgency in the global fight against climate change and on the need to buy time in our fight for survival, which can be brought about only by cutting our methane emissions now. I want to see the Government become the global champion that the pledge deserves. The UK has a real opportunity, having joined Brazil in co-chairing the Climate and Clean Air Coalition. The one thing that we do not have is time. As Bill McKibben has said:
“If we don’t win very quickly on climate change, then we will never win … It’s what makes it different from every other problem our political systems have faced”.
As we have heard, methane is the second-most significant greenhouse gas. While it has a short lifespan— I like the analogy between the bully and the teacher—compared to carbon dioxide, its potency as a heat-trapping gas is far greater: it is some 80 times more powerful than CO2 over 20 years. As the noble Baroness, Lady Sheehan, said, in that way, it is a devastating gas. Methane emissions contribute to one-third of global warming. Tackling methane is rightly recognised as one of the fastest and most cost-effective ways to limit the near-term global temperature rises.
Professor Forster, in his evidence to the committee, said that such actions
“could lower the trajectory of global warming from 0.25 degrees celsius per decade to 0.1 degrees celsius”.
Cutting methane emissions rapidly does not just limit future warming; it slows rates of warming over the coming decades to buy time to implement the deeper and far more complex decarbonisation actions that we must take. Methane cuts are essential in reducing the immediate, devastating and costly real-world impacts of extreme weather and crop loss that we face now and will experience much more going into the 2040s. We have no other policy options to buy time—this is the only one.
The noble Earl, Lord Leicester, said that we should rightly be proud of what the UK has achieved to date. We achieved a 62% drop between 1990 and 2020, a larger percentage than any other OECD country. The UK rightly played a pivotal role in the Global Methane Pledge at COP 26, where 150 countries signed up to reduce their methane emissions by 30% by 2030.
I welcome the Government’s engagement with our recommendations—that is beneficial. The Government point to the existing delivery plan for carbon budgets and the framework for tackling methane. They highlight ongoing work across sectors and are leveraging the UK’s expertise internationally. However, our report argues that the Government must go further if the UK is truly to solidify its role as a global leader and champion the methane reductions required. The Select Committee recommends publishing a dedicated UK methane action plan providing clarity and focus for all sectors, including sector-specific targets and plans. As the noble Lord, Lord Grantchester, said, it is disappointing that the Government have disagreed with this recommendation, saying instead that they are covered in existing budgets. While methane is indeed part of the broader net-zero strategy, the unique nature of methane and the opportunities it presents warrant a specific, transparent and dedicated plan outlining priority actions, costs and benefits.
I will just say a quick word specifically about the sector. Farming is now the key sector: it is the largest UK source, contributing half of all our methane, 85% of which comes from cattle. As the noble Lord, Lord Grantchester, said, farming is perhaps more exposed than any other sector in the UK. Indeed, as we move forward, we have very difficult choices ahead. It is important that we have a balance in these things, but there are certain quick wins that we can do. We need slurry management, selective breeding and the farming and food road map. As the noble Lord, Lord Trees, said, farmers have the knowledge but need the power to do something about this.
In our energy sector, we are wasting enough energy from venting and flaring to power 700,000 homes. Venting and flaring need to end. I point out the recommendation for urgent transparency and accountability in these sectors.
Turning to waste, we need to do more and make sure that we have food collection across the country and enough anaerobic digesters to make that target a reality. We need to do more on landfill and about the fact that waste crime is out of control in this country, with 18% of our waste ending up in the hands of criminals.
The Government mention the UK Emissions Trading Scheme Authority and are considering including methane emissions from the upstream oil and gas sector. This is welcome, but it is not the commitment needed to align with our international partners, who are developing robust standards, including for imports. Robust MMRV is critical for both domestic progress and international accountability. I hope that we will see a UK-EU ETS alignment soon and that the UK will meet EU standards in this area.
The report called for the UK to use its expertise to encourage the establishment of an international body to verify the methane pledge participants’ action plans. The Government’s response points to the Climate and Clean Air Coalition as being a well-placed body. We recognise that it is valuable, but we call specifically for a body focused on verification to ensure accountability and the transparency of data. Data from the UN’s alert system, highlighted at COP 29, showed a stark gap: more than 1,200 alerts about large oil and gas plumes were issued, but only 1% of those resulted in mitigation steps. Data is helpful but if nothing is done with it, it is no better than having no data at all.
The UK, having co-launched this, has a real opportunity. We should go beyond domestic action and do more in the international sphere. We should not be content with just keeping our work at home. We now have 25 satellites orbiting the world; super emitters have nowhere to hide. Abating leaks needs to be done on an international scale. As somebody in the UN said:
“It’s plumbing. It’s not rocket science”.
Abandoned fossil fuel infrastructure now emits more methane than Iran and is fourth-largest global source. The International Energy Agency’s Global Methane Tracker 2025 report, just issued, shows that global methane emissions are stubbornly high. There were nearly 120 million tonnes of methane emissions in 2023, and the global energy sector may have emissions that are 70% higher than officially reported.
I call on the Government to do more with our international oil and gas expertise, particularly in leak detection and repair, and to do more to help countries that are struggling to repair their leaks. This is one way in which the UK Government could demonstrate their leadership in this area and provide a very useful source of help to the globe.
To conclude, a dedicated methane action plan is necessary for clarity and focus, particularly for harder to abate areas. I call on the UK to go further and really be the true champion this treaty requires. Deploying our technical expertise to help identify and fix large leaks internationally is a powerful example of how we can drive action, slow the immediate pace of global warming and keep up the vital momentum on this crucial climate issue.
Lord Roborough (Con)
My Lords, I congratulate the noble Baroness, Lady Sheehan, on securing this debate, and all members of the Environment and Climate Change Committee on their excellent report Methane: Keep up the Momentum. In particular, we on these Benches appreciate the detailed and pragmatic approach and the opportunity to learn so much about methane emissions and management.
I draw the Grand Committee’s attention to my register of interests, in particular as an extensive grazing-based dairy and stock farmer and an investor in Agricarbon, Circular Algorithmic and Data Systems, Cecil Earth, Valaris and Noble Corporation.
The issues of methane emissions and their continued rise have been ably explained by the noble Baroness, Lady Sheehan, and the noble Lord, Lord Jay. I fully associate myself with those remarks but do not intend to repeat them.
We on these Benches understand that environmental responsibility means striking a balance between affordability and necessity. For Governments and individuals to have a realistic probability of success in preventing greenhouse gases causing disastrous climate change outcomes, we must forget pursuing fantasies of the perfect with high-cost, headline-grabbing technologies and instead make pragmatic, and affordable choices every day using cost-effective solutions and innovations.
This is why we welcome the committee’s emphasis on such practical strategies to reduce methane. We also welcome the opportunity to reflect on how we as a country can go further by building on past achievements, supporting innovation and placing trust in our industries, farmers and communities.
The UK has made remarkable progress. Since 1990, we have reduced our methane emissions by more than 60%. This is more than almost any other major economy. That achievement should be a source of national pride. In fact, as president of COP 26 , the UK played a central role in launching the global methane pledge, an international effort to reduce global anthropogenic methane emissions by at least 30% by 2030.
Domestically, we have led by example in key areas. In energy, we have seen methane leaks from oil and gas production reduced significantly through strong collaboration between government and industry and through smart, proportionate regulation. In agriculture, we have introduced initiatives such as the slurry infrastructure grant, helping farmers reduce emissions while continuing to feed the nation and remain globally competitive. In waste, we have seen dramatic reductions in landfill methane emissions, largely thanks to better waste processing, energy recovery and recycling infrastructure. We must sustain this momentum, and there are several areas where action is clearly required.
The agriculture sector is now the UK’s largest source of methane emissions after the reductions achieved in other sectors, primarily from livestock and manure. The committee rightly highlights the potential of innovation; feed additives, selective breeding—accelerated by precision breeding as the noble Lord, Lord Trees, highlighted—and improved animal health all offer effective ways to reduce emissions without cutting production, but we must be clear: our farmers are not the problem. They are stewards of our land, providers of our food and vital players in restoring nature and reducing net greenhouse gas emissions. We must not burden them with unrealistic or punitive targets. Instead, we must provide them with the tools, certainty and support they need to innovate and invest.
Farming is a business, and like any business, it must remain viable if it is to be sustainable. We must be careful not to place the blame on farming for global warming, when farmers are simply responding to economic pressures from their customers for wholesome, affordable food. Any measures that we require farmers to take to reduce greenhouse gas emissions will lead to higher food prices and these have to be affordable for hard working families. We must also be careful not to place our farmers at a competitive disadvantage to overseas farmers, as this will simply lead to a greater reliance on higher emissions, lower cost imported food and undermined viability for our farmers, as the noble Lord, Lord Trees, warned.
The NFU has outlined the importance of promoting sustainable practices, and many farmers are ahead of the curve, but they need clarity. They need policy frameworks that empower rather than restrict and financial incentives that are practical and accessible. I fully support the noble Lord, Lord Grantchester, and his comments about assessing the holistic farm picture, including carbon sequestration when calculating the net farm greenhouse gas emissions footprint. As the noble Viscount, Lord Stansgate, highlighted with the bark example, this is still likely to be inaccurate as science is still developing.
On the oil and gas sector, we on these Benches believe in an affordable energy transition, incorporating continued development of our own gas resources in order to make energy bills affordable for consumers, restore our industry’s competitiveness and reduce our dependence on imported energy. We must ensure that any such development is done with best practice around management of methane emissions, including restricting flaring and venting. Our North Sea energy sector has led the world in technology adoption. For example, our offshore wells have been hydraulically fractured or fracked since 1980, and we can do so again in methane management.
Our energy sector has already reduced methane emissions by 70% since 2002, including a 48% reduction in flaring since 2018—remarkable achievements. Given how clean our North Sea fossil fuel sector has become, I ask the Minister whether it is better to continue to develop our oil and gas resources, rather than import dirtier products from overseas. I also heartily endorse comments from the noble Earl, Lord Leicester, in his call for more digestate gas entering our gas network.
We need better data and more accurate emissions accounting. It is clear from the comments of Professor Hamburg that we in this country have world-leading expertise in monitoring and evaluating emissions, putting us in a strong position to drive international understanding. This means embracing a dual approach that many Lords have mentioned, including both GWP100 and also GWP*, which better reflects the warming profile of short-lived gases such as methane. It also means recognising the nutritional value of food and the central importance of cheap energy to our economy, alongside their carbon footprints. We must not fall into the trap of measuring environmental impact in a vacuum, neglecting wider considerations like food and energy security, affordability and trade competitiveness.
We must avoid adopting ideological arguments and look to pragmatic, evidence-led decision-making. The reduction in methane emissions should be achieved not through arbitrary targets but through investment, innovation and science-based policy. On reading the report and listening to noble Lords in this debate, I was particularly struck by the opportunity that we have to share best practice and technology that we have learned and developed since 1990 with other countries. The Green Alliance highlighted the opportunity in Latin America to help shape its policy on landfill gas capture. I ask the Minister what this Government are doing to promote the export of our expertise to these other countries.
A number of noble Lords mentioned the emissions trading scheme. I should strike a note of caution in the desire to include methane within the ETS, as its shorter duration is unlikely to fit comfortably with the persistence of carbon itself. In a way, we are talking about two different things and it becomes a confusing picture if we put methane into the carbon trading system. I am most interested in the Minister’s view on this matter.
In conclusion, the committee’s report is not just a reminder of what we must do but a testament to what we have already achieved and a call to build upon that success. Methane mitigation is not a fringe issue; it is central to achieving our climate goals. It is an opportunity to protect our environment and support our economy. I commend the committee for its work and urge the Government to act with clarity domestically and with energy internationally.
The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)
My Lords, it has been an interesting debate. Like members of the Grand Committee, I am grateful to the noble Baroness, Lady Sheehan, for initiating the debate and her chairmanship of the Environment and Climate Change Committee. The committee’s report on methane emissions has shed light on one of the most pressing challenges we face in the pathway to net zero. I thank all noble Lords who took part in the production of the report, as well as those who participated in this well thought-out and thorough debate.
I go back to the beginning, the noble Baroness’s speech, when she referred to the outcome of the Select Committee report as being a message of hope. I agree. I should also go back to what the noble Lord, Lord Trees, and other noble Lords pointed out about the reduction in methane emissions, which must be counted. While there can never be complacency in this area, this has to be counted as a significant achievement by this country.
I also accept the point from the noble Baroness, Lady Sheehan, that we need to keep up the momentum. As noble Lords have said, the science on this is unequivocal: methane is responsible for almost one-third of global warming since the Industrial Revolution. However, as the noble Baroness explained, it remains in the atmosphere for only a fraction of time—approximately 12 years. Therefore, reducing those emissions is one of the fastest ways that we can avert one of our most acute climate change risks and keep the Paris Agreement in reach, which is a fundamental global challenge that we face.
The independent advice from the Climate Change Committee ahead of our next carbon budget sets a cross-economy pathway to reduce emissions, including measures that contribute to the reduction of methane emissions. We are considering the recently received Climate Change Committee’s report and we are bound to respond by summer 2026.
Let me make this clear. The noble Lord, Lord Jay, asked whether we are absolutely committed to net zero. The answer is yes; we have to be: the science about the impact of climate change is so convincing. We have to stay determined. One of the tragedies of current political discourse is that there have been so many attacks on net zero. The ludicrous idea that the measures being taken on net zero have led to damage to our economy is so nonsensical, because the one thing on which I am clear is that the big issue on energy prices has nothing to do with the policies that have been taken on net zero but everything to do with our vulnerability to the international fossil fuel market.
In February, the CBI produced a report on what I think was described as the green economy. A 10% increase in the green economy in 2023 compares to a very modest increase generally, and nearly 1 million people are employed in the green sector overall. One can make a very convincing argument that investing in net zero, which we have to do, is actually a way to kick-start growth in the economy. We have this mission statement and I have taken part in a number of cross-government discussions over the last few weeks: the Government are absolutely committed. I take the point from the noble Lord, Lord Roborough, that we need a practical approach to making progress, but there cannot be a let-up in the drive to net zero.
This is the context in which we need to consider the recommendation of the committee to which noble Lords have referred and the question of an action plan. It is obvious that the response given in our written report is disappointing, and I am sorry that I am not in a position to overturn that in the light of your Lordships’ contributions. However, we basically believe that this is covered in our existing delivery plan for carbon budgets. The point I make is that carbon budgets are the very engine room of our pathway to net zero. We are absolutely committed to including key methane policies in the carbon budgets plan, covering the period up to 2030, which will contribute to the Global Methane Pledge.
Under the Climate Change Act, legally binding carbon budget targets require domestic reductions across all greenhouse gases, including methane, to keep us on track to meet net zero. As I have said, we are committed to a progress report in relation to the fourth, fifth and sixth carbon budgets, and we have just received the advice from the Climate Change Committee in relation to the seventh carbon budget.
On the EU and UK trading emissions system, at this stage all I can say to the noble Earl, Lord Russell, is that we understand the importance of what he is saying. We are in discussions at the moment, but I am afraid that I cannot go any further at this point.
We had very interesting insights into agriculture. It is the largest source of UK methane emissions, and we were treated to expert interventions from my noble friend Lord Grantchester, the noble Earl, Lord Leicester, and the noble Lord, Lord Roborough, who all made important points. I very much take the point made by the noble Lord, Lord Roborough, about the impact of measures on food prices. This is clearly a tension that Governments have been facing for many years, which also relates to the issue of welfare standards, as well as comparisons between this country and others, and it feeds into discussions on trade. It is a very difficult and challenging issue.
It is right to place on record my gratitude to the National Farmers’ Union for its valuable contribution to the Select Committee. I certainly appreciate the efforts of farmers in this area and find no attraction whatever in a punitive approach. When I was a Minister in Defra—I had a joint ministerial job across Defra and DECC, as it was called in 2008—I took part in discussions with the NFU on reducing emissions in the agricultural sector. I think it is right to say that it gladly took part in those discussions, and that co-operation has continued.
We are committed to introducing a land use framework, which will make environmental land management schemes work for farmers. Defra is also looking at a number of other measures to reduce emissions from livestock, alongside the upcoming food strategy and farming road map. I am afraid that I cannot give a definite date to the noble Baroness, but we think that this will be a credible plan to reduce food and farming emissions by working closely with stakeholders.
The noble Lord, Lord Trees, made a number of comments about accurate reporting, and other noble Lords added to those discussions. There was reference to recommendation 7, in which the Select Committee asked the Government to move unilaterally to an auxiliary metric. It also asks us to play an active role in international discussions as the UN Framework Convention on Climate Change considers the need to review those common metrics by no later than 2028.
There are two points to be made here. It is clearly important that we have international reporting and that there is consistency in that. I take the point that some noble Lords here are critical about some of the standards of that reporting. However, I say to noble Lords—including my noble friend Lord Stansgate—that we will take an active role in UNFCCC discussions on common metrics. The agenda item will be continued in June 2027, and we will continue to be led by the best available science and international consensus. I have taken note of a number of comments made today by noble Lords.
On my noble friend Lord Grantchester’s comments on the dairy demonstrator project, I cannot go further than our response to recommendation 12. However, that project has now commenced, following the signing of the contract, and we will obviously watch its progress with a great deal of interest.
On the comments made by the noble Earl, Lord Leicester, I take his point about the important role that anaerobic digestion has to play in meeting net-zero goals. We think that, with the right standards of controls in place, it presents opportunities for improved nutrition management, nutrient management and a nutrient circular economy. There are, as he knows, challenges in relation to the risk of improper management, which can lead to issues with environmental risk. However, we certainly think that it has a role to play, and I will take note of the noble Earl’s comments.
The noble Lord, Lord Ravensdale, made a number of interesting comments too. I was especially interested in the points he made about regulators. Clearly, in a field where a number of regulators come into play, the key is to make sure that they work together and that there is no overlap or duplicated approaches. We have announced plans to conduct an internal review of regulations and regulators at Defra, which should help the noble Lord in that area.
I can say to the noble Lord, Lord Roborough, on fossil fuels and the role of the North Sea, that clearly this has been a crucially important sector of our economy for many years. We still have many highly skilled people working there, but we lost 70,000 people in the last 10 years under the previous Government. It is called a super-mature basin, and it is declining. Oil and gas have a role to play in the future, but we are right to go for a balance between different technologies. The emphasis we are making on nuclear as a baseload and putting huge effort into renewables, while having gas as a strategic reserve, is the right way to go forward.
On venting and flaring, which noble Lords have raised before both in the Chamber and here, my understanding is that the regulator is already taking action to increase transparency and accountability. In March 2024, the North Sea Transition Authority published its emissions reduction plan, requiring industry to reduce flaring and venting.
I am not sure for how long I am allowed to speak here, but I will just turn to international leadership. Noble Lords have said that the UK is in a great position to exercise international leadership, and I agree with that prospect. It is on a par with the country being the first major colony to establish a net-zero target in law, and I pay tribute to the noble Baroness, Lady May, for her leadership, which her party unfortunately seems to have forgotten in its fast retreat from net zero. I regret that, because the loss of consensus is a serious matter for the country and the future. We saw that at the local elections recently, during which net zero was attacked by some political parties.
It is important that we maintain our leadership. During the COP 26 presidency, as the noble Baroness said, we were one of the first countries to join the Global Methane Pledge. We are stepping up our efforts to deliver on the pledge through funding to support developing countries. We were one of the 30 signatories to the Declaration on Reducing Methane from Organic Waste at COP 29. Now, of course, we are thinking about COP 30 in Brazil, which is only a few months away, and we are working very hard with the COP 30 presidency, as noble Lords have suggested.
From the Government’s point of view, this is a very interesting report. I know that noble Lords are disappointed with one or two of our responses, but the overall response accepts that this is a thoroughly prepared and researched report. As the noble Earl, Lord Leicester, said, the witnesses came from a wide variety of backgrounds. It is clear that the committee had to give a great deal of thought to the recommendations; we should acknowledge that. We accept the core thrust of the report. Although I have disappointed noble Lords again tonight in relation to the action plan, there will be no lack of action by the Government in responding and in making sure that we make progress on methane reductions, but we think that the carbon budget process is the right way to go forward.
In conclusion, I thank noble Lords for what has been a really fascinating and helpful discussion; I can assure noble Lords that it will inform policy development in future.
Baroness Sheehan (LD)
My Lords, I thank the Minister for his response. I thank all contributors for their valuable and well-thought-out responses to this report; they are very much appreciated. I expected no less from my esteemed colleagues on the committee because their participation in the discussions, as well as the engaged way in which their contributions were made during our deliberations, left me in no doubt that we would have a very good debate today.
I thank the noble Viscount, Lord Stansgate, for his contribution in the gap. His point—and that of the noble Lord, Lord Jay—about the disturbing international scenario in which we now find ourselves will prove a challenge in terms of tackling not just methane emissions but carbon dioxide emissions. I was a bit heartened by China’s recent announcement that it will not ease up on its efforts to tackle climate change. Indeed, at a UN summit as a precursor to the COP 30 meeting, it announced that its NDC, which will be due some time before COP 30, will encompass sector-wide emissions across the economy; that was heartening to hear. Not only will they cover the whole economy: they will cover all greenhouse gases, including methane. We will wait with interest to see the detail.
I will not detain noble Lords too long—I am sure that we all need to move on—but I stress the need for better communication to farmers, which the noble Lord, Lord Grantchester, mentioned. There was consensus on this from the NFU, the Nature Friendly Farming Network, and the Agriculture and Horticulture Development Board. Without farmers on board, we will not get to grips with methane either at home or abroad.
I am not going to go into detail on the other contributions, save to say that I was heartened by what I heard. Let me just leave noble Lords with the thought that carbon dioxide concentrations are increasing in the atmosphere. The Mauna Loa Observatory—I hope that NOAA does not get to erase all this data—has been monitoring carbon dioxide concentrations in the atmosphere. It has not been monitoring it for the past 800,000 years, but we have data from ice cores in Antarctica that shows that from a steady baseline of 280 parts per million of carbon dioxide before the Industrial Revolution, we have seen, in terms of ecological time, a straight-line increase in the concentration of carbon dioxide to today’s average of 426 parts per million.
We are in uncharted territory, so tackling the short-term but powerful greenhouse gases, such as methane and nitrous oxide, are our route to avoiding some of the disastrous tipping points that we are otherwise hurtling towards. We have an opportunity to buy time, and we should take it. I beg to move.
Police, Prison and Probation Officers
(1 day, 18 hours ago)
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Lord Woodley
To ask His Majesty’s Government what steps they are taking to improve the morale, recruitment and retention of police, prison and probation officers.
The Minister of State, Ministry of Justice (Lord Timpson) (Lab)
I know that noble Lords will join me in paying tribute to the amazing work of police, prison and probation officers, and to the importance of our recognised trade unions in representing them. The Government inherited a justice system in crisis, which placed a huge burden on our staff. I am committed to making HMPPS a world-class organisation, and I know my Home Office colleagues are working hard to give police officers the support they need to tackle crime and keep the public safe.
Lord Woodley (Lab)
I thank the Minister for that response. In a civilised society, our police, prisons and probation services must never be run on the cheap. Crumbling prisons and shortages of prison and probation staff are endemic. Therefore, does the Minister agree that it was a terrible mistake by the last Government not to protect these vital public services, which are so important to protecting the public, when they unleashed their short-sighted and counterproductive austerity agenda?
Lord Timpson (Lab)
It is clear that we inherited a mess from the previous Government, with a prison system on the verge of collapse and decimated neighbourhood policing numbers. This Government took decisive action to alleviate the immediate capacity pressures and are committed to making sure that this situation never happens again. That is why we published the first annual statement on prison capacity and a 10-year prison capacity strategy, and commissioned the Independent Sentencing Review. This Government are also taking steps to rebuild neighbourhood policing, which is why we have made £200 million available in 2025-26 to support the first steps of delivering 13,000 more neighbourhood policing personnel.
Lord Marks of Henley-on-Thames (LD)
My Lords, last week the Minister promised a “seismic shift” to improve professional standards across the Prison and Probation Service. He described reports of bullying, discrimination and harassment as
“a wake-up call and an opportunity to change”,
and we agree. Retention rates are very bad: 10.4% of probation officers are leaving annually. For Probation Service officers, who include assistants and trainees, it is over 12%. They have too much to do, often with little experience; 7.8% of prison officers leave every year. Low morale is a major contributor but so are pay and conditions, given the challenges they face. What extra resources will the Government put into recruitment and retention in those services?
Lord Timpson (Lab)
Last year we recruited 1,000 extra probation officers, and this year we are recruiting 1,300. It is clear that it is not just about recruiting staff and training them; it is about embracing technology to help them do their jobs better. Last week we announced that we would agree to all 12 recommendations of the Rademaker review, and we are very grateful to one of HMPPS’s non-execs, Jennifer Rademaker, for all the work she did on it. It is totally unacceptable that our staff have to work in conditions where they are bullied, belittled and sexually harassed, and as Minister I am determined to stamp it out. Retention rates are not where I would like them to be. I am working very hard to make sure that HMPPS is a world-class organisation. That means high rates of training, high rates of morale and high rates of success.
Lord Sandhurst (Con)
My Lords, the Ministry of Justice reported a 12.5% leaving rate among band 3 to 5 prison officers for the year ending December 2024. Considering that the number of new recruits decreased by 35.4% during the same period, will the Minister explain what practical steps the Government are taking to improve both recruitment and retention among prison officers?
Lord Timpson (Lab)
The latest figures are that we have 97% of the number of staff we need in our prisons, but clearly we still have a bit to go. Also, a number of those staff are yet to be fully trained and in the right place. Before I was asked to come and do this role, I did a full review into the training of prison officers. I am fortunate that it is more likely to happen now I am in this role, because training is a big part of the reason why some of our staff leave too early. We want to make sure that people build their whole careers in the Prison Service, because the skills they learn—those soft skills about how they speak to prisoners and offenders—really make the difference in helping turn someone’s life around.
Lord Rogan (UUP)
My Lords, the Police Service of Northern Ireland currently has an all-time low of 6,300 officers. The chief constable is seeking approximately £200 million additional funding to increase the headcount to 7,000 in 2028. While I acknowledge that responsibility for funding the PSNI is devolved, national security is clearly the responsibility of His Majesty’s Government. Given the specific threat from republican terrorists to police and prison officers in Northern Ireland, does the Minister agree that it is incumbent on UK Ministers to step forward to bridge this funding gap to help keep these brave men and women safe?
Lord Timpson (Lab)
I am pleased to say that we as a Government are putting an extra £1 billion into policing, which will go a long way to addressing the neighbourhood policing issues that we have discussed.
The Lord Bishop of Gloucester
My Lords, last week I observed the intensive supervision court in Birmingham, where women serving community orders for low-level offences are closely monitored by judges. Probation staff play a pivotal role. It is clear that the work is high and intense. What steps are the Government taking to urgently ensure that problem-solving courts have the best chance of succeeding—and, indeed, other creative community proposals that we hope will come out of the Independent Sentencing Review?
Lord Timpson (Lab)
I hope we will not have to wait too long for the Independent Sentencing Review; I may need to ask some noble and learned Lords about what the exact dates are. The best day I have had in this job—and I have had lots of really good days—was going to the intensive supervision court in Birmingham. It was incredibly uplifting seeing female offenders coming up from the cells in the morning looking very ill and then seeing how the lives of those who have been engaging with the intensive supervision court for six months have changed. But they knew that they had to engage with probation, housing and often drug and addiction work—and, if they did not, they went to prison.
Lord Reid of Cardowan (Lab)
My Lords, I thank the Government and congratulate them on the re-establishment and re-emphasis of neighbourhood policing. The running down of neighbourhood policing was a terrible mistake by the last Government. Will my noble friend the Minister accept that neighbourhood policing is not just an essential element of effective policing but crucial to the confidence that the public have in the police service, because they can see police on the beat and in their own neighbourhood?
Lord Timpson (Lab)
Neighbourhood policing is the bedrock of British policing, and it is the right model for us. We lost 20,000 police officers under the last Government, but we expect up to an initial 3,000 neighbourhood officers in neighbourhood policing roles by the end of next year. Every community deserves visible, proactive and accessible neighbourhood policing, with officers tackling issues that matter to people.
Lord Bailey of Paddington (Con)
My Lords, as I am sure the Minister will know, police services countrywide struggle to recruit members from the black and ethnic-minority communities, and that is mainly because of the very low level of morale among black serving officers. What work is the Minister specifically doing to support the morale of those police officers?
Lord Timpson (Lab)
I am pleased to know that we have a race action plan that we are working with police constables; it is really important that we recruit fantastic people and make sure that we represent the communities we serve.
Baroness O'Loan (CB)
My Lords, in answer to the noble Lord, Lord Rogan, the Minister said that there was an extra £1 billion coming into policing this year. However, not one penny of that £1 billion will go to Northern Ireland because policing is a devolved matter. Given that the Northern Ireland policing budget is significantly eroded by paying out for dealing with legacy in Northern Ireland, when will the Government create ring-fenced funding to deal with the situation in Northern Ireland, which will then allow Northern Ireland’s police to serve the community in the way in which they wish—properly staffed and properly resourced?
Lord Timpson (Lab)
I will pass that question on to the Northern Ireland Secretary responsible for legacy issues and write to the noble Baroness.
Baroness Blower (Lab)
My Lords, the Government are clearly taking all the issues across the criminal justice system very seriously, but does my noble friend agree that there is a slight risk that not everything will be dealt with entirely coherently? Does he agree with the many voices in this Chamber and beyond that what is really needed is a royal commission on the whole criminal justice system, as promised by the last Government but not delivered?
Lord Timpson (Lab)
We are a Government of action and I am a Minister of action, and I am already getting going. For me, it is really important that we have had the Independent Sentencing Review, which I hope we will be talking about shortly, and the Leveson review is ongoing. Those are significant reviews, and we will implement those reforms quickly.
Uncollected Financial Penalties
(1 day, 18 hours ago)
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Baroness Levitt
To ask His Majesty’s Government what steps they are taking to deal with uncollected financial penalties such as fines, costs and confiscation orders.
The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Ponsonby of Shulbrede) (Lab)
My Lords, it is essential that financial penalties are collected and enforced. His Majesty’s Courts & Tribunals Service uses robust methods to do so, including taking money from an offender’s benefits or salary and seizing and selling goods. Offenders can be sent to prison for non-payment to the court. In 2023-24, HMCTS collected over £671 million in financial penalties. The Government are investing in the replacement of outdated IT systems and are also planning legislative changes which will reform the confiscation order regime.
Baroness Levitt (Lab)
My Lords, I thank my noble friend the Minister for his Answer, but in March 2024 there were £4.4 billion-worth of unpaid criminal court fines, compensation orders, victim surcharges, et cetera. Does the Minister agree that steps should be taken urgently to deal with this unacceptable situation, which is grossly unfair on those who pay up and feeds scepticism in the judiciary and society at large about the effectiveness of non-custodial sentences?
Lord Ponsonby of Shulbrede (Lab)
I thank my noble friend for that supplementary question. Of the £4.4 billion that she referred to, £2.7 billion is from confiscation orders. Of the £2.7 billion, £1.2 billion is purely interest—interest is paid at 8% on the confiscation order amount. There are legislative changes in the Crime and Policing Bill, which is currently in the other place, but I think it is worth pointing out to my noble friend that, in existing legislation, there are only very limited circumstances where a Crown Court can judicially cancel an order, and it contains no powers to administratively cancel a confiscation order. That means that the confiscation order amount accrues over the years, including the interest. With respect to financial penalties, by which I mean fines, the picture is very different. Over a five-year period, 80% of all fines are collected, and that figure has remained flat over the last few years. While I accept that the overall number is increasing, that gives an unfair picture of the current situation, and the Government are addressing the reasons why that is an unfair reflection of the position.
Lord Hogan-Howe (CB)
My Lords, it has always been a challenge to collect fines, because they are often imposed on people who cannot pay them. One of the areas in which progress can be made is criminal assets. This is usually around organised crime, which is motivated by profit. What I think the enforcement agencies have not invested in—and I invite the Minister to inquire—is having forensic accountants, who are people who can trace assets in often complex financial arrangements. At one stage, the NCA had one, as did Police Scotland. Can the Minister find out, or tell us, how many forensic accountants there are? People may not know, but the police can keep half of the cash they seize and 15% of other assets that are confiscated—not for themselves—
Lord Hogan-Howe (CB)
This is not for themselves but for the purpose for which they were formed.
Lord Ponsonby of Shulbrede (Lab)
I thank the noble Lord for that question. It is worth saying that, if somebody fails to pay a fine and they are imprisoned for that failure to pay, then the fine is written off. However, if somebody fails to pay a confiscation order and they are sent to prison, the compensation order amount is not written off. They are different. The other point worth making goes to the point that he made about the work of forensic accountants. A lot of the assets which confiscation orders are applied to are hidden assets, so there is an estimate—an informed guess, if I can put it like that—of the amount when making that confiscation order. Nevertheless, I take the point that he makes in his question. If I can add anything on the number of forensic accountants available to give advice to the court, I will write to him.
Lord Bellingham (Con)
My Lords, is the Minister aware that embassies across London owe a total of nearly £150 million in unpaid fines and charges? Obviously, under the Vienna convention, embassies are exempt from taxes but not from these fines and charges. What will the Government do about it?
Lord Ponsonby of Shulbrede (Lab)
What the Government will do is write to the noble Lord. After much time in this House, I know that this issue comes up very regularly. If there was a simple answer to that question, I am sure it would have been found. Nevertheless, it is a real issue. It undermines confidence in the parking fines system, and it undermines confidence within the wider community if certain groups are not paying their fines. It is a serious issue, and I understand that. If there is more I can say, I will write to the noble Lord.
Lord Marks of Henley-on-Thames (LD)
My Lords, as the noble Lord, Lord Hogan-Howe, said, many financial penalties go uncollected. Does the noble Lord agree that we are, in respect of such offenders, imposing far too many financial penalties? Should we not be making more use of community service and the probation services in those cases where there is no hope of collecting payment?
Lord Ponsonby of Shulbrede (Lab)
It is an interesting question—one which I used to grapple with regularly when I sat as a magistrate in Westminster. The noble Lord is asking that the sentencer increase the sentence from a fine to a community order, increasing the sentence for certain people who are unable to pay their fines. It may be that this is taken into account when sentencers make that judgement, but it is an inflationary—if I could use that word—solution to a problem. Nevertheless, of course, when sentencers impose fines, they have to take into account the means of those whom they sentence.
The Earl of Effingham (Con)
My Lords, there is £5 billion-worth of bitcoin cryptocurrency in government accounts seized from organised crime relating to Jian Wen. Please allow me to repeat that: £5 billion that is in the Government's bank account. I ask a similar question to the one that the noble Lord, Lord Lamont of Lerwick, posed to the Chancellor of the Exchequer four months ago: what are the Government’s plans for this windfall?
Lord Ponsonby of Shulbrede (Lab)
I do not know the answer to that question. If the £5 billion is in the Government’s accounts, I do not know how free they are to use that money. If there is anything more I can add to that answer, I will write to the noble Lord.
Lord Faulkner of Worcester (Lab)
My Lords, when my noble friend writes to the noble Lord opposite about unpaid parking fines by embassies in London, would he also write to me and include in my letter the details of unpaid congestion charges by embassies in London? That is an amount that has escalated almost out of sight. As the noble Lord opposite has said, this is not a tax; it is a payment for services provided in London.
Lord Ponsonby of Shulbrede (Lab)
Yes, if I am able to find those figures, I will indeed write to my noble friend.
Lord Sikka (Lab)
My Lords, since 2018 only seven unexplained wealth orders were issued, and not a single penny of wealth has been recovered since 2019. This seems to undermine the Government’s offensive against unexplained wealth’s illicit financial flows. Can the Minister explain whether anything has changed since the Criminal Finances Act was introduced in 2017?
Lord Ponsonby of Shulbrede (Lab)
I thank my noble friend for that question. The figures he quoted reflect how difficult it is to track down the money when criminals are hiding it. It takes hugely intensive work, and it is something I have personally received presentations on. The issue is one of resourcing to a certain extent, but there is no lack of will to pursue criminals who have unexplained wealth. They need to be tracked down and charged as appropriate.
Scientists: Working in the United Kingdom
(1 day, 18 hours ago)
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Viscount Stansgate
To ask His Majesty’s Government what action they are taking to encourage scientists from around the world to do their research and associated work in the United Kingdom.
The Minister of State, Department for Science, Innovation and Technology (Lord Vallance of Balham) (Lab)
The UK has a world-leading science base, supported by some of the top universities and research institutions, and offers prestigious fellowships and professorships through UKRI and the national learned academies. As the immigration White Paper sets out, we will now go further in ensuring that the very highly skilled, including top scientists and researchers, have opportunities to come to the UK and access our targeted routes for the brightest and best global talent. We will set out more details in due course.
Viscount Stansgate (Lab)
My Lords, I like to think that my noble friend the Minister’s Answer does not go quite as far as he personally would want it to. In America, the Trump Administration are mounting an attack on universities and scientific research. That is a matter for them, but for us it offers an unparalleled opportunity, and we must grasp it. Can the Government not develop proposals that would attract, encourage and facilitate not only talented individuals but whole research groups, who could come to do their work in universities around the UK? Does my noble friend not agree that this would offer the prospect of a brain gain of immeasurable potential for our future growth?
Lord Vallance of Balham (Lab)
I thank my noble friend. We have always been the beneficiaries of brain gain; we have been attractive to top-class overseas researchers for many years. Indeed, about one-third of our Nobel prize winners are first or second-generation immigrants. For 2025-26, UKRI has roughly £770 million for talent funding, of which £170 million is for future leader fellowships. There is an opportunity, as there always is, to attract people from overseas to the UK, both individuals and groups; indeed, there are mechanisms in place to do so. I am looking very carefully at what further mechanisms can be put in place to make sure we remain a country that attracts the very brightest and best.
Lord Clement-Jones (LD)
My Lords, the Government’s immigration White Paper, as the Minister said, expresses the ambition to attract top global talent, including scientists. However, measures such as the increased skills charge, alongside high UK visa costs and the challenging context of flat cash real-terms cuts in core research funding, create barriers to recruitment. The Government seem not to be very clear whether they want to attract international scientists or not. Do we not need a proper long-term plan with increasing investment to maintain the UK’s research leadership and attract talent?
Lord Vallance of Balham (Lab)
The current SR period has £20.4 billion for R&D, which is the highest amount there has been. Of course, a proportion of that is about talent attraction. The talent attraction announced in the White Paper was geared towards the global talent visa—the level of highly skilled people who can bring great value added to this country. The desire is to increase the threshold for the skilled worker visa to aim for more qualified, more talented people. On the high-talent end of the system, there are clear measures in the immigration White Paper to try to get those systems to work better and faster. The cost of visas and the health surcharge is now met on UKRI grants and on Horizon Europe grants.
Lord Tyrie (Non-Afl)
The Minister will have sensed the widespread support for the Government’s plan to launch an initiative in this field. Can we have a date on which this is going to be published, and clarity on whether it will target American academics, who have become very unsettled by the assault on academic freedom in the United States? Can he also tell us whether the Prime Minister’s recent announcement on immigration will have any adverse consequences for what was originally planned?
Lord Vallance of Balham (Lab)
As I said in answer to an earlier question, I am keen to make sure we have a robust system to attract the best talent from all over the world—this is not targeted at any particular place—and I will make announcements about that very shortly. In the immigration White Paper, the routes for a global talent visa are specifically pulled out as ones that will become easier. They will be facilitated to make this happen, as will those in other highly skilled areas. There are measures in the White Paper that make that easier for the highly skilled individuals we need both for the research sector and, indeed, the tech sector and companies.
Lord Turnberg (Lab)
My Lords, I am sure my noble friend is aware of the large number of charities that support research that brings overseas senior academics to the UK. I mention the Royal Society Wolfson Fellowships; Weizmann UK, which brings scientists from the Weizmann in Israel to the UK; and a large number of others. They contribute enormously to our science space.
Lord Vallance of Balham (Lab)
I thank my noble friend. He is quite right; there are a number of schemes from charities and, indeed, as I have said, from the academies. Over £200 million of funding goes to the national academies to support their core activities. The vast majority of that is spent on research and talent schemes. Some £400 million was given to the Royal Society and the Royal Academy of Engineering as an endowment for their specific fellowship schemes—the Faraday Discovery Fellowships, and, for engineers, the Green Future Fellowships. There are many charities that also contribute, and we are fortunate in this country to have charities, including the Wellcome Trust, that provide substantial funding for fellowship schemes.
Lord Mair (CB)
My Lords, other countries have been quick to act decisively in the light of the Trump Administration’s severe cuts to US science budgets. Is there not a real danger of the UK falling behind? Should this not be addressed very urgently?
Lord Vallance of Balham (Lab)
I reiterate the point I made: it is very important that we make schemes available to people from all over the world; it is not about targeting a specific country. We will do so, and we are working on schemes to make attractive offers both to individuals and to groups. This is an important area. There have already been many approaches to universities for people who want to base themselves here, and it is important that we have a system that is sustainable and effective, making sure that researchers can work in what is a world-class system in the UK.
Viscount Camrose (Con)
My Lords, whether they are homegrown or imported, it is clear we are increasingly going to need more researchers in this country. Equally increasingly, we are competing internationally for research talent. What, therefore, is the Government’s assessment of our overall net attractiveness to researchers right now? How do the Government propose to monitor this going forward and adapt as needed?
Lord Vallance of Balham (Lab)
An estimated 17% of R&D workers in the UK in 2023 were non-UK. In that year, 7% were EU nationals and 10% were non-EU. In the university sector, about 37% at the top research and teaching universities are non-UK nationals. About 25% of the life sciences workforce was born outside the UK. The noble Viscount is quite right that there are many people we need here. We have always needed them, we will need them, and we are monitoring very carefully how these numbers are evolving.
As part of the immigration White Paper, the labour market evidence group is being set up—comprised of the Industrial Strategy Advisory Council, the Department for Work and Pensions, Skills England and the Migration Advisory Committee—to make sure that we have a clear view of future needs.
Baroness Ritchie of Downpatrick (Lab)
My Lords, will my noble friend the Minister talk to his colleagues in the Home Office to ensure that the graduate route, which was established some years ago and provides universities in the UK with academic talent and scientists from other countries—I think particularly of Queen’s University Belfast, which is assisted by students and scientists from south-east Asia—is not minimised or undermined in any way?
Lord Vallance of Balham (Lab)
I thank the noble Baroness for her question. In answer to the first part, I can confirm that the Minister sitting next to me heard that, so the Home Office will be aware. The graduate visa system is an important system. The changes in the immigration White Paper effectively reduce from 24 months to 18 months the amount of time a graduate has after finishing their course to get a job. The reason for that is clear: to try to make sure these people get jobs that are highly skilled and that they can continue in, rather than jobs that are not highly skilled.
This is an important route. It is worth noting that in 2023-24, the number of graduate visas increased by 49%. This has been a rapidly growing area. It is important that we make sure we get this right and that these people enter high-skilled jobs.
Gaza Humanitarian Foundation
(1 day, 18 hours ago)
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Baroness Altmann
To ask His Majesty’s Government what assessment they have made of the proposal by the government of the United States for a Gaza Humanitarian Foundation as an independent means to provide humanitarian aid in Gaza.
Baroness Altmann (Non-Afl)
In begging leave to ask the Question standing in my name on the Order Paper, I declare my interests as shown in the register.
The Lord Privy Seal (Baroness Smith of Basildon) (Lab)
My Lords, it is clear that there is a desperate urgency to get humanitarian aid into Gaza. As the UN has said, it is hard to see how the proposal to distribute aid through private companies would meet the scale of the need, protect civilians, protect aid workers and be consistent with humanitarian principles. The UN and humanitarian NGOs have worked with courage and determination to deliver aid into Gaza since the conflict began. These organisations uphold humanitarian principles and can deliver assistance across Gaza to those who need it most.
Baroness Altmann (Non-Afl)
I thank the noble Baroness for her Answer. It is a little disappointing to hear that she does not join me in welcoming this proposal, which should help at least 1.2 million people initially, and then up to 2 million later, to receive humanitarian aid under an independent mechanism. Does she agree that bypassing Hamas to prevent it hijacking the aid is important, especially in the light of UNRWA’s failure to do so and reports such as that from the Washington Institute for Near East Policy, which shows that exploiting hijacked aid has generated at least £500 billion for Hamas’s terrorist operations?
Baroness Smith of Basildon (Lab)
My Lords, the blocking of aid into Gaza by Israel has caused enormous suffering. We are aware of the allegations she refers to that Hamas uses humanitarian aid for its own gain, and we have encouraged Israel to share the evidence with the UN and with NGOs. We have not seen any evidence that there is systematic diversion to Hamas and, given the ongoing hostilities, we are unable to verify allegations through direct monitoring. We ensure that all mechanisms are in place for UK-provided aid. The situation is dire; one in five people faces starvation. Aid is available to get into Gaza now if we can unblock those routes. The surest way through is to have a ceasefire, release the hostages and get aid in now. That is essential if we are to protect and save lives.
Lord Browne of Ladyton (Lab)
My Lords, is my noble friend the Leader of the House in a position to remove the veil from the recently formed Gaza Humanitarian Foundation? It is less than two and a half months since this company was put together. Can she tell us which private contractors are being set up to take the place of the United Nations and its partners? Are they capable of providing not just the scale but the diversity of aid that the UN and its partners would be able to provide to the Gazans if the Israelis lifted their blockade?
Baroness Smith of Basildon (Lab)
I am not able to satisfy my noble friend on those points; I do not have that information. We have urged the Israeli Government to share that information, because it would be very difficult to make an assessment. We stand ready to work alongside Israel, the UN and our partners to ensure that aid is delivered, but we have to ensure both that they have the expertise to get the aid in and the safety of the aid workers. Over 400 aid workers have died providing humanitarian aid. It is the most dangerous part of the world to supply aid to and in which to be a humanitarian worker. We should express our gratitude and the debt we all owe to those who put their lives at risk to help others.
Lord Purvis of Tweed (LD)
My Lords, is it not plumbing the depths of immorality for the women and girls of Gaza, who have had such brutality inflicted on them, now to submit to the indignity of having to queue up to profiteering mercenaries hired by a shadowy organisation established in Switzerland, which will operate under no humanitarian standards or international mandate and with no accountability mechanisms whatever, to receive sanitation, food, water and medicine? What are the Government doing to stop this terrible idea?
Baroness Smith of Basildon (Lab)
At the moment, it is an idea. We have seen no evidence that it will go forward. However, the noble Lord is right that humanitarian principles of delivering aid must be consistent across every area in which that aid is being delivered. Today, we are convening the UN Security Council in New York—it is probably meeting now—to look at what can be done to deal with the appalling humanitarian situation in Gaza.
Baroness Deech (CB)
My Lords, the simple, straightforward solution is for the hostages to be released. We can see with our own eyes that the hostages are among the least well-fed people in Gaza. Why are the Government always so quick to believe Hamas and United Nations organisations? Why do they not share the widespread scepticism about Hamas, which is stockpiling the aid and preventing lorries going in? Why do they not note how UNRWA has been infiltrated by Hamas?
Baroness Smith of Basildon (Lab)
I hope that the noble Baroness heard one of my first comments, which was about the priority of getting the hostages out and released. Recently, Eli Sharabi was released; he was a shadow of his former self. There is a lot of suffering—by the hostages who have been kidnapped, the families of those who were killed on 7 October and the people of Gaza. The crucial thing is to get the aid in and the hostages out. Only if there is a ceasefire can we then talk about the future and see what else can be done for a long-standing peace.
Baroness Morris of Bolton (Con)
My Lords, I declare my interests as set out in the register. Last week, the Palestinian Authority declared a famine in Gaza. It was caused not by a flood, by a drought or by any natural causes; it is entirely manmade. I welcome what the Lord Privy Seal said about the conference being held next week. Can the UK Government ensure that we point out that aid workers are already on the ground in Gaza who have been working for years, ceaselessly, to help the Palestinians, and that they should very much be part of the solution?
Baroness Smith of Basildon (Lab)
The noble Baroness is absolutely right. Delivering aid and humanitarian aid is not something that you can do on a whim. These people are experienced, have knowledge and expertise and know the areas on the ground. I was not referring to the June conference but the one taking place today in New York, but the noble Baroness is right: there is aid there now. There is aid at the borders that could be delivered. One in five of the population now faces starvation. It is critical to get that aid in as soon and as quickly as possible. The quickest way to do so would be to stop blocking the aid so that it can be delivered to those who are in desperate, dire need of it.
Baroness Blackstone (Lab)
My Lords, will the Leader of the House accept that the sidelining of trusted aid agencies and the militarisation of aid under this scheme will lead to large parts of Gaza, where the most vulnerable and least mobile people live, being without supplies?
Baroness Smith of Basildon (Lab)
My noble friend says that there is another scheme in place; I am not sure that there is. There are discussions about it, but I have seen no details. There cannot be any aid mechanism that does not have delivering humanitarian aid as its sole priority. It cannot deliver political or military objectives; it is there to help vulnerable civilians. That will be the priority. If there is not action almost immediately, more people will die. Women and children in Gaza face loss of life now. The figure that one in five people in Gaza faces starvation is horrendous. Yes, the hostages must be released, we must get aid into Gaza and that ceasefire must take place. Only then can we look at a longer timespan for peace in the region.
Lord Callanan (Con)
My Lords, one of the first things this Government did on coming into office was resume funding for UNRWA, which was suspended by the previous Government. This followed proven allegations that UNRWA employees were members of Hamas and participated in the 7 October massacre. Nobody disagrees with the idea that aid should get through to those who need it, but there are also proven allegations that Hamas has been stealing, diverting and hijacking that aid. Can the Minister assure the House that no British taxpayer’s aid has been diverted to Hamas?
Baroness Smith of Basildon (Lab)
My Lords, yes, we resumed funding to UNRWA for the very purpose of having people with knowledge and expertise on the ground to get aid in as quickly as possible to save lives. I said at the very beginning that, for all UK-funded aid, we look at every possible mechanism to ensure that it gets to where it is needed, which is to the most vulnerable. We will always do that, and we will do everything we can to ensure that.
Border Security, Asylum and Immigration Bill
Tuesday 13th May 2025
(1 day, 18 hours ago)
Lords ChamberBorder Security, Asylum and Immigration Bill 2024-26 View all Border Security, Asylum and Immigration Bill 2024-26 Debates Read Hansard Text Amendment Paper: Consideration of Bill Amendments as at 12 May 2025 - large print - (12 May 2025)
Infrastructure Planning (Onshore Wind and Solar Generation) Order 2025
(1 day, 18 hours ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
Lord Hunt of Kings Heath
That the draft Order laid before the House on 10 March be approved.
Relevant document: 20th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 6 May.
Protection of Prison Staff
(1 day, 18 hours ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
Lord Sandhurst (Con)
My Lords, on 3 April, the Times reported that Islamist gangs had created gross dysfunction in HMP Frankland, in which a large number of convicted terrorists are held. Just nine days later, on 12 April, Abedi, the Manchester bomber, detained in the same Frankland prison, threw hot oil over a prison officer. Then, on 8 May, Rudakubana, the Southport killer, detained in HMP Belmarsh, threw boiling water over an officer there. Both those terrible attacks were by radical Islamists, in category A prisons. What steps will be taken to isolate such prisoners from access to such dangerous substances? Will tasers be issued in category A prisons, and when will stab vests be provided?
Lord German (LD)
My Lords, with a prison population at 98.9% of capacity last month, a 19% increase in the number of assaults on prison officers in the last year and a shortage of prison officers, that is a bagful of problems for the Minister. Does he have an emergency plan for these problems, and what will he do to ensure that our prison officers are safe and that there is a sufficient number of them?
The Minister of State, Ministry of Justice (Lord Timpson) (Lab)
Like all noble Lords, I was shocked to hear about the serious assaults against prison officers at HMP Belmarsh and HMP Frankland. It is a sorry state of affairs. We will not tolerate any violence against prison officers. Prisoners who are violent towards of staff will face the full consequences of their actions. The incident at HMP Belmarsh is subject to a police investigation; as such, we are unable to comment further at any level of detail at this stage. However, in the past few weeks, since the recent serious attack at Frankland, we have announced a number of steps to improve prison officer safety, including trialling tasers, suspending the use of self-cook areas for certain prisoners and reviewing whether protective body armour should be made available to front-line staff.
We also have a zero-tolerance approach towards extremist gang activity in prisons. Staff clamp down swiftly on any threatening behaviour. Our staff turn up to work to help people turn their lives around, not to get assaulted.
The Lord Bishop of Gloucester
Prison staff work with a wide range of prisoners, from those who are the most violent to the many who are in prison for repeated low-level offending—many of whom have mental health issues and drug addictions—yet the training for prison staff is woefully short: a matter of weeks. I think that people would be shocked to hear how short that is. What is being done to expand that training and development so that staff not only feel valued but are equipped to deal with such a wide range of situations?
Lord Timpson (Lab)
I share the right reverend Prelate’s interest in prison officer training. When I did my review into their training, it was clear that the period in which they have to learn the detailed and complex skills to do the job is too short. I have launched a trial in London called the Enable programme, where we are giving far more time to training. I believe that we should have a 12-month training programme rather than one of a matter of weeks. We should also give officers the time to learn the more subtle skills of being an officer. It is clear to me that one of the best ways to tackle the problems in our prisons and Probation Service is to ask the people who do the job.
Lord Hastings of Scarisbrick (CB)
My Lords, given that we all agree in this House that attacks on officers are reprehensible and cannot in any way be accepted, would it not be a regressive step to mass-provide further protective and defensive equipment for officers across the board other than the category A estate? As the Minister knows well, good relationships between prisoners and officers will not be enhanced if it is likely that defensive equipment will be used in situations where it is plainly unnecessary, and conversation can de-escalate tension?
Lord Timpson (Lab)
My noble friend is right that the best way to de-escalate a problem in a prison is by jail craft—understanding the complexities and knowing your prisoners. If we look at the tools available to prison officers, we see that the best one is their mouth, but we also need to look at what we can do to protect our staff, because they need protecting in some of our establishments where they are dealing with complex and dangerous prisoners.
Lord Bellingham (Con)
My Lords, one of the main causes of violence in prisons is the ready availability of illegal drugs. The Minister’s boss, the Secretary of State, stated the other day that it was her intention to try to rid our prisons of drugs by the end of this Parliament. Is that a realistic pledge?
Lord Timpson (Lab)
The noble Lord is right that drugs are a massive problem in our prisons. Some 49% of people arriving in prison tell us they are addicted to drugs, and then we put them in a prison with serious organised criminals who make a lot of money out of selling drugs to them, so clearly we have a problem. However, I am interested not just in tackling drugs getting into prisons—how we tackle drones and illegal contraband coming in—but in how people can leave prison not addicted, so that when they leave prison they do not go back.
Lord Walney (CB)
These attacks were made by dangerous individuals who had been imprisoned because of their violent radicalism, but there remains the problem of radicalisation within prisons once prisoners arrive on the estate. What assessment has the Minister made in his early months of the scale of this within the prison system and the current level of resilience in what the state and prison officers can do to protect prisoners from it?
Lord Timpson (Lab)
Any gang member is a problem in our prisons. We need to make sure that we identify where they are and do all that we can to limit their activities. We know that the best way of dealing with these complex people is by trusting the staff and their expertise at dealing with them, and we need to we give them every tool at their disposal to make sure that these people are not dangerous to themselves, to other prisoners and, most importantly, to staff.
Employment Rights Bill
Tuesday 13th May 2025
(1 day, 18 hours ago)
Lords ChamberEmployment Rights Bill 2024-26 View all Employment Rights Bill 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 81-III(a) Amendments for Committee (Supplementary to the Third Marshalled List) - (13 May 2025)
Lord Sharpe of Epsom
“(1) Statutory sick pay is payable by an employer to an employee—(a) at a rate of 60% of the employee’s normal weekly earnings for the first three qualifying days of any period of incapacity for work,(b) at a rate of 80% of the employee’s normal weekly earnings for subsequent qualifying days,subject to a maximum of £116.75 per week.(2) Subsection (1) applies regardless of whether the employee earns above or below any lower earnings limits that were previously set.”Member’s explanatory statement
This amendment adjusts the rates of Statutory Sick Pay (SSP), providing 60% of normal weekly earnings for the first three qualifying days and 80% for subsequent qualifying days.
Lord Sharpe of Epsom (Con)
My Lords, I shall speak also to Amendments 71B and 75 standing in my name.
According to the latest figures from the Office for National Statistics this morning, the number of payrolled employees fell by 33,000 in April, or 106,000 on the year, and the number of job vacancies also fell. Wage growth has slowed. This evidence suggests that the OBR was right and the provisions in the Bill are already creating a net negative impact. The Chartered Institute of Personnel and Development’s latest survey was widely cited at the weekend. It confirms that employers’ confidence is at the lowest level since the pandemic and that a quarter of employers are planning to make redundancies in the next quarter. The CIPD’s economist, Mr James Cockett, was quoted as saying:
“The Employment Rights Bill is landing in a fundamentally different landscape to the one expected when it formed part of the Labour manifesto in summer of last year”.
This picture was confirmed in KPMG’s and the Recruitment and Employment Confederation’s reports. Recruitment activity across the UK continued to weaken at the start of the second quarter. The chief executive of the REC, Neil Carberry, has said that
“it is time for real changes to address employers’ fears and boost hiring. A sensible timetable and practical changes that reduce the red tape for firms in complying with the Bill will go a long way to calming nerves about taking a chance on someone”.
Last week the noble Lord, Lord Fox, called for the Bill to go on vacation because we need to get it right. This raft of new statistics proves his prescience, and perhaps the vacation ought to be permanent. Instead, we are now being asked to consider further obligations on employers through changes to statutory sick pay. A number of businesses across sectors have made it very clear that, while they support the principle of statutory sick pay, they are concerned about the rate and structure being proposed. Many have called for the rate of statutory sick pay to be set at 60% rather than 80%, as a more sustainable and proportional figure. The Government claim to have consulted widely with businesses, trade unions and various stakeholder groups to try to strike a fair balance, but, based on the data and the concerns raised, we believe that the right answer, particularly for the initial days of absence, is 60%.
Let us look at some of the other evidence. In the British Chambers of Commerce 2024 workforce survey, a full 50% of respondents stated that they would be negatively impacted by the proposal for statutory sick pay entitlement from day one. That is a clear warning sign that the proposed structure may have unintended consequences. Further, in a survey by the London Chamber of Commerce, 38% of firms predicted that they would need to freeze hiring as a direct result of the statutory sick pay changes; 30% expected a reduction in profits; and 33% anticipated lower wage increases for their existing staff.
Baroness Lister of Burtersett (Lab)
My Lords, I am grateful to my noble friend Lady O’Grady and the noble Baroness, Lady Smith of Llanfaes, for their support for Amendment 72, and to the Safe Sick Pay campaign and the Health Foundation for their help. The amendment is a probing one, aimed at facilitating a debate about the future of statutory sick pay—from a rather different perspective than that of the noble Lord, Lord Sharpe of Epsom—to which the Bill makes very welcome improvements.
Nevertheless, the scheme will still fail to provide adequate protection in sickness, especially for workers on lower incomes and who belong to marginalised groups. The amendment would require the Secretary of State to review the rate of SSP prior to this year’s Budget and to ensure that no one is worse off as a result of the otherwise positive changes made in the Bill.
Starting with the latter, I very much appreciate the time that my noble friend the Minister gave me and my noble friend Lady O’Grady to discuss the unintended consequences of the Bill’s welcome removal of the lower earnings limit and its replacement by the rule that employees will receive 80% of their average weekly earnings or the flat rate SSP, whichever is lower. The problem is that this new rule means that a small number of low-paid employees will be worse off than now.
Because of the also welcome removal of the waiting period, the loss will be limited to those who have been off work sick for more than three weeks. According to the DWP, we are talking about 13% of all sickness absences. I accept that this is a small proportion, but, by definition, we are talking about people with more serious illnesses. In its fact sheet, the DWP itself gives the example of a cleaner, working 11 hours across 5 days at the national living wage, who takes three months off for cancer treatment and who would lose £65 in total in SSP. The DWP assumes that the cleaner could potentially make up some of that in universal credit, but what if the cleaner were married to someone whose wages are not low enough to qualify for UC? She will lose some of her independent income. While £65 may not sound like that much to those on decent incomes, it could make a real difference to someone on a low income, particularly where a worker’s earnings are not shared fairly within the family. It is women in particular who are likely to lose out as a result of this unintended consequence.
I understand why the Government have rejected the alternative that has been put forward hitherto, but I would ask them to look again at the proposal made by a number of trade unions and charities that the formula use a 95 % rather than 80% replacement rate, which seems to be the most straightforward way of dealing with this. I believe that it is incumbent on the Government to come up with a solution to ensure that no one is made worse off due to the unintended consequence of the otherwise positive change made by the Bill. After all, Labour’s plan to make work pay promised that:
“We will ensure the new system provides fair earnings replacement for people earning below the current rate of statutory sick pay”.
On the rate of SSP, the final report of the Health Foundation’s Commission for Healthier Lives noted that the expansion of SSP under the Bill
“does not address a fundamental issue: statutory sick pay remains too low to provide meaningful financial security during illness”.
Last year, the Work and Pensions Committee similarly concluded that SSP
“does not currently provide adequate protection for those who most need protecting from financial hardship during periods of sickness absence. It consequently fails to perform its primary function of providing a basic level of income protection”.
At £118.75, it represents an earnings replacement rate of only 19% for an employee on average earnings, or 28% for an employee on a full-time minimum wage salary, one of the lowest rates in the OECD. The interim report of the Mayfield Keep Britain Working Review pointed out that our European counterparts typically pay around 70% to 80% of an employee’s wage when they are sick. The low rate of SSP in the UK all too often spells real hardship and financial insecurity, especially for lower-paid workers, including women, disabled workers and members of racially minoritised communities.
Analysis by Citizens Advice shows that four out of five households in the bottom three deciles would not be able to afford essentials such as bills and food after four weeks on SSP. The Work and Pensions Committee noted that there was
“almost complete agreement among witnesses that it was too low and not enough to live on”.
This included 90% of members surveyed by the Chartered Institute of Payroll Professionals.
Cancer charities have pointed to how far cancer patients fall below the minimum standard needed to live a dignified life at a socially acceptable standard as measured by my colleagues at Loughborough University. In a briefing, the charities quote a patient with leukaemia who says:
“What people don’t realise is that your costs also go up when you get cancer”.
Going on to SSP meant a “ huge drop” in his income that he was not able to replace with benefits. The result was, he wrote:
“I was an emotional wreck and it was a very, very bad time”.
Mind found that two in three people with a mental health problem surveyed who received SSP faced financial difficulties and that over one-quarter specifically mentioned that relying on SSP had affected their ability to pay bills and buy food, which hardly helps their recovery. Indeed, three-fifths of respondents believed that the reduction in their income as a result of receipt of SSP had had a negative impact on their mental health. This is illustrated by a research respondent quoted by the Health Foundation:
“If sick pay had been enough, I think I would’ve been able to return to work, but instead my condition worsened drastically ... and I ended up in the worst state, mental health-wise, that I have ever been in, forcing me to claim PIP … and be unemployed for the past year and a half”.
The hardship associated with receipt of SSP, particularly for those on lower incomes, can result in presenteeism—people coming into work when sick and, where it is contagious, potentially spreading sickness. This is bad for them, bad for their fellow workers and bad for employers. According to government analysis, presenteeism costs businesses 44 days of lost productivity per year. Poor sick pay undermines the Government’s overriding objective of economic growth. Analysis by WPI Economics suggests that improved SSP could boost the economy by over £4 billion a year and would reduce the pressure on the NHS.
The Health Foundation warns that inadequate SSP can create an incentive for some workers to move quickly into the social security system without a clear route back into work, the very opposite of what government policies are trying to achieve. It points out:
“When workers are financially supported during sickness absence, they are more able to recover, take part in rehabilitation and return to work safely and sustainably”.
The implications of presenteeism became horribly visible during the pandemic, which, as my noble friend the Minister told the Committee only last week,
“exposed just how precarious work and life are for those on low incomes, with many forced to choose between their health and financial hardship”.—[Official Report, 8/5/25; col. 1789.]
Far too many people felt that they simply could not afford to stay at home when they were infectious. Countries with more generous sick pay saw higher isolation compliance and better health outcomes. We are told by the experts that it is only a matter of time until the next pandemic. One way we can prepare is by ensuring that SSP is adequate now.
This amendment merely asks the Government to look again at how to ensure that no one loses out as a result of the Bill’s welcome improvements to SSP, and to undertake a quick review of its level. I am sure this would be welcomed by a wide range of charities, the TUC and major trade unions, as well as the more than 185 parliamentarians who support the Safe Sick Pay campaign.
A New Deal for Working People stated unequivocally:
“Labour will raise Statutory Sick Pay”.
The amendment builds on the much weaker assurance in the Commons from the Minister for Social Security and Disability that the Government would monitor how effectively the Bill’s SSP reforms will support employees. We do not need monitoring to tell us that SSP is simply too low, especially in view of the recent Work and Pensions Committee inquiry. The Commission for Healthier Working Lives calls for a review that will result in an increase in SSP
“to a fairer level while giving businesses the time and support they need to adapt”.
I hope my noble friend the Minister will at least be able to provide some assurances on both issues.
Baroness Coffey (Con)
My Lords, I rise to speak to Amendment 73 in my name regarding SMEs and an SSP rebate scheme. I have made a drafting error by calling it four days when it should have been three days, in compliance with the law today.
Occupational health is a key factor in both helping people to stay in work, to try to prevent some of the illnesses, and to get back into work quickly, and for some time it has been a key part of the strategy of a successful business to do that. But I am also very conscious that SMEs in particular are not always well displaced currently to access, which is why expanding that capability has been a key part of DWP’s more recent strategies, which the present Administration have continued.
Sickness rates are significantly lower in the private sector than in the public sector, but what is common to both is that there is an increasing prevalence of the primary reason for sickness pay: people being off sick due to mental well-being. I am conscious that this is often not an easy situation to challenge or interact with if you do not have the experience to do so, and that is why increasing occupational health is needed.
Why is occupational health so relevant to this? It used to be the case that with statutory sick pay you could reclaim from the Government the amount of money that you had paid out. You might have paid out a lot more—100% of earnings or similar—but all businesses used to be able to get a rebate for the statutory sick pay element. I know that because I used to fill out the claims myself when I was working in industry. Over time that was whittled down, and it was finally abolished in 2014. Instead, the Government at the time created the Health and Work Service, which was designed to be referred to by SMEs for people who have been ill for a few weeks—again, almost as a provision facilitated by government.
One of the challenges is that this is continuing to be part of an issue. Many businesses, particularly small businesses—certainly in submissions made to me—are particularly worried about this starting from day one of people being unwell. As a consequence, it is important that we should investigate the opportunity to get a rebate scheme for SMEs to try to keep the status quo as it is today.
It is in the interests of government to support SMEs. As we have already heard, the statistics show that, unfortunately, payroll employment is falling. When in office I was very pleased that we saw it increasing. Indeed, I am certain, in wanting the Government to succeed in their ambition to get to 80% employment rate, that they need SMEs to be taking on people to work. As I have explained, I do not think the Bill will help with that, but one modest way to go towards alleviating some of the issues would be to introduce a straightforward rebate scheme for SMEs.
Lord Davies of Brixton (Lab)
I speak in support of my noble friend Lady Lister of Burtersett, and in support of more being done on statutory sick pay. I welcome the Government’s commitment to strengthen statutory sick pay by removing the lower earnings limit and the waiting period, but they must go further to ensure that people with mental health problems have a secure safety net when they need time off work, and a pathway back into work when they recover.
The UK has one of the least generous sick pay schemes in the OECD in terms of rates and length. It forces people to remain in work while they are unwell, which risks them becoming more unwell and eventually falling out of work. Because statutory sick pay is inadequate, people who rely on it often carry on going into work when they are unwell. This can risk them becoming more unwell, to the point where they fall out of employment altogether. We need a sick pay system that provides real security, is more compassionate, gives people the time they need to get better and supports them to return to work when they are ready.
Reforming statutory sick pay is beneficial to the economy, to businesses and to people with mental health problems. As my noble friend has emphasised, presenteeism—going to work when unwell—is costing UK employers £24 billion a year, according to figures produced by Deloitte. It reduces productivity and business competitiveness, as well as aggravating a person’s illness. Introducing a flexible statutory sick pay model that allows for partial payments alongside wages would help people to gradually return to work after a period of sickness, or allow them to reduce their hours when needed without being signed off completely. Not only is this beneficial for the employer, as employees are able to return to work sooner part-time, but it keeps the employee connected to their workplace and reduces the likelihood that they will fall out of employment altogether.
Extending the length of statutory sick pay being paid from 28 weeks to 52 weeks will enable more people to stay in employment, reduce rehiring costs for businesses and prevent people falling out of employment and needing support from the benefits system. Ultimately, we need to see a higher level of statutory sick pay, and I see no reason why, when you are sick, you should get any less than the national minimum wage.
Baroness Noakes (Con)
My Lords, my main concern with the changes to statutory sick pay in this Bill is the impact on smaller businesses, which is why I support the amendments in this group in the names of my noble friend Lady Coffey and the noble Lord, Lord Fox, which provide for rebates for SMEs. Of the two amendments, I prefer that of my noble friend Lady Coffey because it clearly undoes the harms that Clause 10 will cause.
I could not find much data on how much businesses actually pay in statutory sick pay, but I suspect that, unless an employer is unlucky enough to get an employee who has long-duration sickness, most will be paying relatively little at present, because absences are mainly for less than four days. What the data does show is that most sickness absences are for minor illnesses, which are unlikely to exceed three days. The average days lost per worker per year in 2023, which is the most recent data I could find, is just short of eight days. Among smaller and micro-businesses, that falls to around five days.
Extending the days for which payment is made is likely to increase the number of days lost to sickness, as the current incentive to work if the illness is mild will simply disappear. The Government say they have no idea what the behavioural impact of the changes will be—whether positive or negative—but I am prepared to bet that there will be far more short-duration absences, which will qualify for statutory sick pay, than there were before.
If I am right that most SMEs do not currently pay much in the way of statutory sick pay, the changes in the Bill will straightforwardly increase their costs. An average small business of between 10 and 49 employees has about 20 employees, which means that the average for a small business will be to pay for at least 100 days of sickness that they do not currently have, which would amount to around £2,000 in additional costs each year, even if no additional sick days were taken, which I doubt. That is not a huge amount per business, but it adds up to many billions of pounds across the whole economy. It also, of course, comes on top of the jobs tax and the very significant increases in the national minimum wage, which leads me to the likely real consequences of this change on top of the others. Put simply, SMEs will not hire workers unless they absolutely have to. We can already see evidence of that from the surveys of smaller businesses and in the weakening labour market—my noble friend Lord Sharpe of Epsom gave us an up-to-date view on that. It is only going to get worse.
Furthermore, all those groups that we as a nation want to get back into work, in particular those who are long-term sick, will simply not be attractive to employers. Any hint of an illness record in a job applicant’s background will count against them, because no employer would want to take on the additional costs that would automatically come with that employee.
I am sure that I do not need to remind the Committee that SMEs employ nearly half the private sector work- force. A reluctance to hire among SMEs will kill growth and opportunities for many of the groups that we need to be employed in this country. There is a simple way to solve this problem, set out in Amendments 73 and 74. The Government would be wise to go down that route.
Baroness Lawlor (Con)
My Lords, I shall speak in support of Amendments 71A and 71B in the name of my noble friend Lord Sharpe of Epsom, Amendment 73 in the name of my noble friend Lady Coffey, and Amendment 74 in the name of the noble Lord, Lord Fox, for a rebate scheme.
Amendments 71A and 71B propose a sensible modification to Clause 11 and strike a more affordable approach for a business paying the employee for time not worked, as well as for the compliance and record-keeping involved. I say “more affordable” rather than “fair” because many businesses—particularly small and micro-businesses, as we continue to hear in Committee —will struggle to stay afloat and in business, given the juggernaut of additional costs, burdens and increased obligations imposed by this Bill. That includes those in this clause and those in previous clauses that we have discussed.
In Clause 11, such costs are to be imposed for those below the lower earnings limit, as we have heard, which will add to the extra costs paid by employers. They will potentially open further problems raised in the impact assessment, the modelling for which suggests a rosier picture for business than the available evidence warrants but also raises questions of behavioural response. Indeed, that consideration was a fundamental principle addressed in the welfare state proposals by Sir William Beveridge in his blueprint Social Insurance and Allied Services in 1942. The original National Insurance Act was framed as a contributory scheme with strict conditions on benefit to avoid creating perverse incentives.
The impact assessment for this measure—which models outcomes on the basis of a variety of factors, including some unproven assumptions—contends that there is evidence suggesting that overall sickness absence may be reduced but, on the basis of evidence considered from other countries, says that it is
“possible that regulation changes induce a behavioural response”
and that
“studies from other countries have found that the incidences of sickness absences are higher when sick pay is more generous. There could be an increased number of sickness absence days taken due to improved financial protection”.
We can read that in whatever way we like, and we have heard different interpretations of more generous statutory sick pay, but it is incumbent on the Government to return to some of the original principles in the national insurance system in this country and to think further about not creating perverse incentives. There will now be days for which the employer will pay for which there is absolutely no productivity gain.
Baroness O’Grady of Upper Holloway (Lab)
My Lords, I support the noble Baroness, Lady Lister, and Amendment 72, and I add my thanks to the Safe Sick Pay campaign, the Health Foundation and other organisations. I heartily welcome the Labour Government’s commitment to strengthening SSP by removing the lower earnings limit and the waiting period.
A nationally representative survey conducted for the TUC found that around half of employees get their full pay as usual when sick, but that around 28% were forced to rely on SSP alone. It also found a clear class divide when it comes to who gets what: eight in 10 of higher earners—over 50 grand a year—got full pay when off ill, compared with only one-third of lower earners.
The Covid pandemic exposed just how precarious life is for those in insecure, low-paid work, and we do not know how many preventable illnesses were caused by people struggling into work and spreading the virus because they could not afford to stay home. But we do know, as we have heard, that forcing people back to work when they are ill is bad for workers and bad for business, puts pressure on the NHS and is costly for the economy.
I am very grateful to the Minister for taking time to meet me and the noble Baroness, Lady Lister, to discuss our concern that the formula adopted by the Government could leave low-paid workers who earn just above the lower earnings limit worse off. The DWP’s answer has been that abolition of the waiting days before a worker receives SSP ensures that, for the first three weeks, those losses will be offset. But, surely, the policy intention of the Government’s commitment to abolish the waiting days is not to make up for losses caused by its own formula. The policy intention should be to ensure that every worker who relies on SSP is, in fact, better off, and we need to protect those on longer- term sickness who are, for example, receiving cancer treatment.
I note the Government’s concern that the formula must be designed in a way that avoids workers getting more in sick pay than they would in wages, and avoids a cliff edge. I remain unconvinced, however, that it is beyond the wit of the DWP to come up with an approach that protects that position without penalising a group of low-paid workers.
Secondly, as we have heard, this amendment seeks a review of the rate of statutory sick pay. As the Resolution Foundation has pointed out, unlike many other European countries, the rate is not linked to earnings. Currently at £118.75, SSP equates to 27% of the national minimum wage. In 1999, SSP was equivalent to 43% of the national minimum wage. That is a big drop. For a decade and more, SSP has failed to keep up with the cost of living or increases in the living wage.
The Work and Pensions Select Committee has confirmed that the SSP rate is not enough to live on. At the Covid public inquiry hearing in December 2023, Matt Hancock was quizzed by Sam Jacobs, who is counsel for the TUC. The former Health Secretary agreed that the rate of SSP should be higher. How could he argue otherwise, when the UK languished at the bottom of the OECD league for statutory sick pay under the previous Government and when we know that such a low rate of SSP is a danger to public health?
I understand that perfection must not be the enemy of the good, but an SSP rate that works out at around £3 per hour is some way short of either perfection or good. This amendment implicitly recognises that this woeful legacy of neglect in tackling it will not be remedied overnight. It would, however, be welcome if the Minister could reassure us today that both the formula and the rate of statutory sick pay will be reviewed before the Autumn Budget, and rightly so.
Baroness Cash (Con)
My Lords, I start by declaring interests. I am an employer, the founder of a listed business, MindGym, which is a behavioural science business, and an expert in corporate training to improve employee well-being and productivity. I am also a commissioner at the EHRC.
I support the Opposition’s amendments in this group: Amendments 71A, 71B, 73, 74A, 74B, and 74C. At the outset, I would like to note for the record that everyone here is driven by compassion for those who need protection. I pay tribute to the speeches by noble Lords from the Benches opposite, but I am very concerned about these proposals by the Government.
I am grateful to the noble Baroness, Lady O’Grady, for drawing our attention to the Resolution Foundation report, which has identified some of the points that support the amendments from this side of the Committee. I will return to those.
The Government have said on record that they want growth. We support that goal. They want businesses to succeed. We support that goal. They have also said on the record that they want to reduce the number of people who are out of the workforce on long-term sickness—currently running at 2.8 million. We support that goal. What we do not understand is how on earth the Government believe that this legislation and these proposals are going to achieve any of that. They are based in compassion, I have no doubt, but the Government are pursuing a culture of incapacity and dependency that will impede the stated aims.
Baroness Smith of Llanfaes (PC)
My Lords, I support Amendment 72 from the noble Baroness, Lady Lister, which I and the noble Baroness, Lady O’Grady, have signed. This amendment would require a review of the rate of statutory sick pay ahead of His Majesty’s Government’s 2025 Autumn Budget. It requires the Secretary of State to determine, following that review, whether the rate should be changed and to publish a Written Statement setting out the reasons for that determination.
It is important to remind ourselves what this amendment entails. As noble Lords are aware, statutory sick pay is a government scheme requiring employers to provide most employees in the UK who are absent from work due to sickness with a minimum level of pay during that period of absence. Statutory sick pay —SSP—is £118.75 per week, following an increase last month, which an eligible employee can receive for the days that they are ill and not working, except for the first three days of that sick leave. To be eligible, one must be classed as an employee and have done some work for the employer, earn at least an average of £125—previously £123—per week, and have been ill for more than three days in a row. It is only on that fourth day that they receive SSP.
The scheme as it stands is ineffective and causes hardship. As we have heard from the noble Baroness, Lady O’Grady, according to the TUC, 28% of employees receive only basic SSP when ill, meaning that they are reliant on this very small weekly amount during that period of illness. The TUC adds that
“there are 1.1 million workers earning below £123 per week who are not eligible for SSP”,
with most of those workers being women.
Considering also the penalty of a three-day delay until an eligible employee can claim SSP, it is clear that reforming SSP is both necessary and overdue. I therefore welcome the provisions under the Employment Rights Bill that will see SSP payable from the first day of incapacity to work by way of Clauses 10 and 12, and the removal of the lower earnings limit—that is, the requirement to earn at least £125 per week—through Clauses 11 and 13. However, Clauses 11 and 13 also set in legislation that the rate of SSP will be set at the lower of £118.75 or 80% of the employee’s normal weekly earnings. That payment is extremely low by international standards, as we have heard from many noble Lords. It is one of the lowest rates in the OECD.
If you were to divide this amount by a typical 40 hours worked by full-time employees in a week, this would provide under £3 per hour to employees who are ill. Of course, many workers work more than 40 hours per week, decreasing this hourly amount even further. But in the context of rising housing costs, food prices, energy bills and household bills, such a small payment is inadequate to meet basic living standards. I ask your Lordships: do we believe that those people can survive on £3 an hour? That is an important question that we must consider when we look at this amendment.
In fact, in the context of universal credit, the Joseph Rowntree Foundation estimates that to afford the basic household essentials, a single adult requires at least £120 a week and a couple £205 a week. It is clear that a review of the adequacy of the SSP rate is crucial to ensure people are not plunged into poverty just for becoming ill, which is something that happens to all of us. Proposed new subsection (7), in Amendment 72, makes provision for the Secretary of State to ensure that no employee receives less statutory sick pay than they would have received before the Bill’s enactment, as a result of changes under Clause 11. This is important because according to the TUC, an 80% replacement rate as under the Bill will see 300,000 workers entitled to a lower rate of SSP than currently. Many of these individuals work for multiple employers, work part-time and receive low wages. According to the Safe Sick Pay campaign, three-quarters of those impacted will be women. Disabled people will be disproportionately affected, almost half of whom are aged between 20 and 54.
Using the SSP amounts in place before April, the Safe Sick Pay campaign outlined the example of an employee who will now lose out. That employee, working for multiple employers, earning £123 a week, would have received £116.75 a week of statutory sick pay because they earned above the lower earnings limit. Following the Bill as it stands, that same employee will see a 16% reduction in their entitlement and receive only £98 a week, as this would represent 80% of their earnings. Many workers, particularly those in low-pay positions, already struggle to afford the shortfall caused by SSP when ill. Increasing that shortfall will make it more unlikely that workers will have adequate savings to mitigate the loss of income. Proposed new subsection (7), in Amendment 72, provides a way for the Secretary of State to rectify this situation and ensure that no one is worse off as a result of SSP changes made by the Bill. It is vital that His Majesty’s Government do not intentionally or unintentionally cut sick pay for hundreds of thousands of workers.
I will now briefly turn to some of the other amendments and the debate on this group so far. Amendment 73 in the name of noble Baroness, Lady Coffey, and Amendment 74 in the name of the noble Lord, Lord Fox, call for the establishment of a scheme for reimbursement of statutory sick pay costs incurred by companies with fewer than 250 employees. This is an interesting proposal, as we have heard from the noble Baroness, although we have yet to hear from the noble Lord, Lord Fox. I look forward to hearing the Minister’s response on the practicalities of such a proposal.
I feel very strongly that mental health is health, and that this is not just to do with those facing mental health conditions; it goes wider than that. It is important to note that this is about all workers who have been signed off from work; there are lots of different reasons why they might be ill, including those relating to mental health.
The aims of these amendments differ from those of Amendment 72, which seeks to address gaps in the Bill concerning adequate sick pay for workers—gaps that cause some concern, especially the consequential effects on low-paid workers. I hope that, in responding, the Minister addresses my concerns: the adequacy of the SSP rate as set out in the Bill; the effect on low-income workers, without relying on the welfare system to offset that effect; and whether His Majesty’s Government will commit to a review of SSP rates, so that workers are not punished by measures in a Bill which is expected to strengthen their workplace rights.
Baroness Fox of Buckley (Non-Afl)
My Lords, there have been some excellent debates in this group. I ask for some clarification, particularly from the Government, on something I am confused about. I am sympathetic to Amendment 74A. The noble Baroness, Lady Cash, made a very useful and insightful contribution that brought another layer to the discussion. There is a danger of us talking about these things technically, yet in a rather old-fashioned way, when there is a lot more evidence and new phenomena to consider.
Amendment 74A looks at the impact on—
The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)
I am sorry to interrupt the noble Baroness, but we are not debating Amendment 74A. It is grouped elsewhere.
Baroness Fox of Buckley (Non-Afl)
I have the right group; I have just said the wrong thing.
Lord Fox (LD)
My Lords, I thank all noble Lords who have spoken in what has been a very interesting debate. I will try to reflect on what I have heard as I speak; that will make my job quite difficult and probably make my speech completely incoherent, but I will do my best.
We closed last week with a couple of de-grouped Conservative amendments. I promised to reserve what I would say on statutory sick pay for this group, which means that I am unlikely to speak on the next group. Last week the noble Lords, Lord Sharpe and Lord Hunt, spoke firmly against the Government’s proposed changes. I have seen evidence of businesses arguing strongly either for the status quo or for a two-day threshold.
I am not a behavioural scientist, but I can read a room politically. The party that is sitting on a huge majority in the Commons has made it very clear where it stands on this issue, and that has been reasserted by some of the even stronger comments we have heard from the Benches opposite. Businesses have drawn the same conclusion. Many of those I talk to are seeking ways to ameliorate this, rather than eliminate it, which is probably unlikely.
I was interested to hear the noble Lords from the Conservative Front Bench speak to Amendments 71A and 71B. Their version of amelioration appears to be to reduce the amount of SSP, or at least severely limit it. We heard a different story from the noble Baronesses, Lady Lister and Lady O’Grady, who set out why SSP is important and why the rate is meaningful. To contextualise poverty, we are talking about the poorest people who are working people but still extremely poor. It is difficult to overestimate the generosity of this scheme, but that is what I have heard from several on the Conservative Benches. This is a very modest offer. With her statistics, the noble Baroness, Lady Lister, set it out very clearly, as did the noble Baroness, Lady Smith.
Before I talk to my own Amendment 74 and Amendment 73, I will deal with the others. In Amendment 75, the noble Lords, Lord Sharpe and Lord Hunt, call for a reviewer to report within two years. I mentioned there is a subsequent group which also has impact assessment amendments in it. I am not really sure why we are debating them separately. Rather like the noble Baroness, Lady Fox, I am going to mention 74A to 74C, which have been shunted into a separate group. Taken together, there is a slightly curious mismatch of timings: Amendment 75 is after two years, 74B and 74C after six months and 75A after a year. I agree that there do need to be impact assessments following whatever your Lordships decide, perhaps on a more systematic calendar than the ones suggested.
I am interested in the pre-emptive impact assessment. For the benefit of your Lordships’ Committee, it would be good to hear the Minister spell out the detail of the impact assessment of business on the current proposed measures. If, as the Minister says, the costs will be relatively modest, the costs of Amendment 73 or 74 would also be relatively modest, which takes me to the point in question.
As we have heard very eloquently from the noble Baroness, Lady Coffey, she and I have come up with very similar suggestions in terms of amelioration, which is what I was talking about earlier. Rather like the noble Baroness, Lady Noakes, I slightly prefer the version from noble Baroness, Lady Coffey, but that is not the point—this is not a competition. We would like to sit down with the Government and thrash through a way whereby a rebate scheme can be reintroduced. This seems to be the sensible approach. We care deeply about SMEs—they drive a huge part of our economy. This is a way of making sure that they do not get disadvantaged as employees get what they deserve as SSP. That is what I am asking for from these Benches. Very sensibly, the noble Baronesses, Lady Coffey and Lady Noakes, and others supported it. I hope that the Minister will be able to make a positive noise about that and we can sit down and have that conversation.
Today, we have heard that SSP is absolutely vital for a section of society who are already massively disadvantaged. We should not be drawing lines and pushing them further down. We should be finding ways of making sure that they are not disadvantaged even more and, at the same, we should find ways of making sure that our SME sector is not also disadvantaged.
Baroness Jones of Whitchurch (Lab)
My Lords, we have had a really good debate on these issues, and I hope that I can do justice to all the questions and points that have been raised.
I begin with Amendment 75, tabled by the noble Lords, Lord Sharpe and Lord Hunt, on independent reviews into the effects of SSP reforms on small and medium enterprises. As noble Lords will be aware, the Government have already undertaken a regulatory impact assessment, which was published on 21 November 2024 and can be found on GOV.UK. This considered the likely direct business impact of the SSP changes, including on small and medium enterprises. In the regulatory impact assessment, the Government estimated that delivering these measures will cost businesses a modest £15 extra per employee. I assure noble Lords that the Government remain committed to monitoring the impact of these SSP measures. We intend to conduct a post-implementation review of the measures in the Employment Rights Bill within five years of implementation. Additionally, the Department for Work and Pensions conducts regular employer and employee surveys and will continue to do so, providing further monitoring of the impact of the SSP changes on a range of employers and employees.
I draw attention to the Keep Britain Working review. We asked Sir Charlie Mayfield to lead this independent review, which will consider recommendations to support and enable employers to promote healthy and inclusive workplaces, support more people to stay in or return to work from periods of sickness absence and retain more disabled people and people with health conditions.
While I am speaking about the variety of illnesses that people on sick leave incur, let me address the issue of mental health absences, which was raised by the noble Baronesses, Lady Cash and Lady Smith, the noble Lord, Lord Sharpe, and my noble friend Lord Davies. Our proposals have to be seen in the wider context of the Bill. The Bill is intended to improve the experience of employees at work, so measures such as flexible working, guaranteed hours and protection from harassment could—we believe will—reduce stress at work, potentially leading to fewer incidents of burn-out and better employee mental health, and therefore fewer related absences. For us, that is an important challenge that we intend to monitor.
Amendment 73, in the name of the noble Baroness, Lady Coffey, would introduce a rebate scheme to reimburse SMEs for the cost of SSP for the first four days, although I think she clarified that she meant three. I thank her for her interest in SSP, and of course I appreciate her extensive knowledge and experience in this area, as a former Secretary of State for Work and Pensions. As previously mentioned, regarding waiting days, the changes we are making to SSP will cost businesses around an additional £15 per employee, a relatively modest amount in comparison with the benefits of reduced presenteeism and the positive impact that this will have on our lowest paid members of society. As the noble Baroness may recall, we previously delivered SSP rebate schemes such as the percentage threshold scheme. This was abolished due to SMEs underusing it, and feedback that the administrative burden was complex and time consuming. So I suggest that a rebate scheme that covered only the first three days of sickness and absence would also be quite administratively burdensome, both for businesses to claim and for the Government to process.
Previous SSP rebate schemes also did not encourage employers to support their employees. We know that employers having responsibility for paying sick leave helps maintain a strong link between the workplace and the employee, with employers encouraged to support employees to return to work when they are able.
Sticking with the theme of rebate schemes, Amendment 74, from the noble Lord, Lord Fox, would introduce an SME rebate scheme for the whole duration of sickness absence. I reiterate the points I made earlier about the limited cost to business as a result of SSP changes and the experience of previous rebate schemes. I agree with the noble Baroness, Lady Lawlor, that we have moved a long way from the Beveridge system of social insurance. The costs and the mechanisms are very different now.
A rebate for the full cost of SSP could cost the Government up to £900 million a year. I do not believe that a rebate scheme is the best way to support our SMEs at this time. We will be considering the findings of the aforementioned Keep Britain Working review, which is expected to produce a final report with recommendations in the autumn. The noble Lord, Lord Fox, challenged me to keep talking about this, and of course I am very happy to do so.
Amendments 71A and 71B were tabled by the noble Lords, Lord Sharpe and Lord Hunt. As they may be aware, the Government consulted on what the rate of SSP should be for those who currently earn below the lower earnings limit. There was no clear consensus from stakeholders on the percentage. The Government believe that the 80% rate strikes the right balance between providing financial security to the lowest paid employees when they need to take time off work to recover from illness and limiting the cost to business. As the noble Lord, Lord Fox, said, if we are not careful, we will be penalising the very poorest in our society.
Crucially, the total amount saved by business, if the rate were set at 60% compared to 80%, would be around £10 million to £30 million per year. That is about a £1 difference per employee per year, or less than 0.01% of total spending on wages annually by businesses. On the noble Lord’s Amendment 71A, which would set the rate at 60% for the first three days of a period of incapacity for work, the amounts potentially saved by business become even smaller, with the difference in cost being a matter of pennies. Given the minimal savings for businesses, the complexity for employers in administrating different rates is difficult to justify.
Lord Sharpe of Epsom (Con)
My Lords, I thank the Minister very much indeed for her response, and, indeed, all noble Lords for their contributions to what has been a thoughtful and valuable debate. My particular thanks go to my noble friends Lady Noakes, Lady Coffey and Lady Lawlor, as well as to my noble friend Lady Cash, for bringing to the debate her unique expertise in the area of behavioural science.
It is it is crucial that the Government fully recognise that many provisions in this Bill are interlinked, as we have heard from all sides of the Committee. Changes in one area can have unintended ripple effects in others. As I have said, we support statutory sick pay, but we must also acknowledge that these proposed changes will result in higher costs for employers. My amendments were an attempt—in the words of the noble Lord, Lord Fox—to ameliorate some of those costs and find some sensible compromises. I am disappointed that the Government have chosen to reject them. Without clarity, businesses cannot plan, cannot invest and cannot hire with confidence. As I pointed out in my opening remarks, the facts are plain: jobs are being lost now.
Regarding an SME rebate scheme—as highlighted by my noble friend Lady Coffey in her Amendment 73 and spoken to by my noble friends Lady Noakes and Lady Lawlor, as well as by the noble Lord, Lord Fox, in his Amendment 74—the Government have stated that final decisions will follow consultation with business through secondary legislation. The impact assessment notes plans for “extensive engagement” with small and medium-sized businesses to
“test where mitigations can be made”.
However, SMEs have spoken: they have asked for a rebate scheme as used during the pandemic. It is therefore disappointing the Government have not accepted the amendments to provide that support.
I would suggest that the Minister takes up the offer of the noble Lord, Lord Fox, to talk more on this subject —a conversation that we would like to be party to. I am pretty sure that we will be returning to it on Report. If I may paraphrase the noble Baroness, Lady O’Grady, it should not be beyond the wit of man to design a simple scheme that works. For now, however, I beg leave to withdraw my amendment.
Lord Hunt of Wirral
“Impact assessment: Statutory Sick Pay provision on absenteeismWithin 12 months of the day on which this Act is passed, the Secretary of State must publish an assessment of the impact of the provisions in this Act relating to Statutory Sick Pay on levels of absenteeism.”Member's explanatory statement
This new clause requires the Secretary of State to publish an assessment of how the Statutory Sick Pay provisions in the Act impact absenteeism, within 12 months of the Act being passed.
Lord Hunt of Wirral (Con)
My Lords, after what has been a fascinating, wide-ranging and important debate on statutory sick pay, I would like to focus on the impact that these changes are going to have in particular on absenteeism, on short-notice shifts and on enhanced sick pay schemes. So I shall speak to Amendments 74A, 74B and 74C. We will continue to make the point that this Bill brings with it a raft of unintended consequences.
The importance of Amendment 74A cannot be overstated. Absenteeism is a critical issue for many businesses, especially those in hospitality, retail and other service-based industries, where staff shortages can lead to disruption, cancellations and even closures. With the removal of waiting days for SSP and the expansion of eligibility, it is essential that all of us should understand fully how these changes will affect absenteeism patterns across various sectors.
One of the sectors most concerned with the potential rise in absenteeism that these changes will cause is, of course, hospitality. Many businesses in this sector rely on part-time, hourly or zero-hour contracts, often employing younger workers, students or those with fewer financial responsibilities.
As we know, a significant portion of the workforce in hospitality earns below the lower earnings threshold for statutory sick pay, and may be employed for only limited hours. These workers are typically less dependent on their income, often still living at home or with fewer financial obligations. This brings us to a major concern. If these workers know that they will still receive statutory sick pay regardless of their financial needs, there may be little incentive for them to attend work when they feel under the weather, or even when they would simply prefer a day off. The concern is that the reforms could result in workers taking sick leave when it may not be strictly necessary, as the financial implications of their doing so would be mitigated by the statutory sick pay payment.
For example, if a student worker or part-time employee knows that they will still receive statutory sick pay, even if they do not meet the earnings threshold, they may not feel the same level of obligation to attend work. This is particularly true in a sector such as hospitality, where work provides either temporary or supplementary income. As such, the absence of financial pressure could lead to increased absenteeism in the short term, which could, in turn, lead to operational challenges for hospitality businesses, especially those that already operate with small teams, a high turnover of staff, or both.
As I mentioned, we believe it is essential that the Government thoroughly evaluate how these statutory sick pay provisions would affect absenteeism, particularly in sectors such as hospitality, where the risks of absenteeism are most pronounced. The impact assessment called for in Amendment 74A would enable us better to understand the extent to which these reforms would result in higher absenteeism rates and whether there are any other unintended and undesirable consequences, such as workforce disengagement, or a lack of motivation to work, in sectors where employees may not be so financially reliant on their income.
It is vital to understand, first, how absenteeism levels might change, especially in sectors with a younger, less financially reliant workforce; secondly, the operational challenges businesses would face due to potential increases in absenteeism; and, thirdly, the wider economic effects of these changes, including potential impacts on service quality, customer satisfaction and employee morale.
I turn to Amendment 74B. The proposal to remove the waiting period for statutory sick pay and the lower earnings limit represents a substantial shift in how sick pay obligations are structured. It carries serious financial implications, particularly for low-margin sectors, such as retail and hospitality, and for small and medium-sized enterprises more broadly. This amendment seeks a modest but necessary safeguard. It asks the Government to publish, within six months, a report on the impact of these statutory sick pay reforms on employers’ ability to offer enhanced sick pay and occupational health and well-being services.
As of 2024, 28% of UK employers offer occupational health services, while 27% provide sick pay that goes beyond statutory minimums. While we certainly want to see those numbers improve, we must surely understand why provision remains relatively low. A survey conducted last year found that 43% of business leaders cite financial constraints as the primary barrier to offering enhanced sick pay. Another 31% highlighted legal complexity; 28% cited administrative burden; and 31% cited staffing challenges as further obstacles. Rather than addressing those challenges, surely the Government have to recognise that the Bill threatens to amplify them.
Baroness Fox of Buckley (Non-Afl)
My Lords, I should have spoken in the other debate—
Baroness Fox of Buckley (Non-Afl)
But I will carry on. I also want to refer to the issue of absenteeism, but I feel as though I have wandered into the skivers debate, and I do not necessarily want to be involved in that.
I am not worried that sick pay will create a nation of skivers or everybody phoning up and saying, “I am off sick”. But I am confused—maybe the Minister can help me here—about what seems to be a conflict in government priorities concerning our attitude to work and, in a way, our attitude to sickness. There seems to be some tension between the discussion around reforming the welfare system and PIPs, for example, and the concerns raised in that debate about ever greater numbers claiming disability benefits, especially for mental illness. I thought that the questions asked by Wes Streeting, the Health Secretary—quoting experts and evidence on the problem of overdiagnosis and of encouraging a culture in working-age adults, especially young people, of feeling incapacitated and dependent on the state in a demoralising way, such that they are written off—are in fact a very mature way of looking at that discussion that we should consider.
We also have to acknowledge a phenomenon that we discussed quite a lot during the passage of the Mental Health Bill. Being unwell, particularly mentally unwell, has now become integral to many people’s identities. The figures given in the earlier debate—when I meant to speak, and when the noble Baroness, Lady Cash, and others made the point about huge numbers of people now being off work as a result of disability due to mental ill-health—indicate that there is an increase not in mental ill-health but in a new cultural phenomenon of people feeling unable to cope in some capacity.
I raise this issue in relation to the Bill because, although the Government are having a mature and interesting discussion on welfare in the other place, I cannot see that it does not conflict with the statutory sick pay provisions and debate we have had on this Bill. On Amendment 74A, which calls for an impact assessment regarding absenteeism, I am concerned in a different way about absenteeism. If Liz Kendall and Wes Streeting are incentivising or encouraging people who have been on long-term sick leave to return to the workforce—maybe to all those care home jobs that have just been created—will they willingly do that, or will they take advantage of this new flexible sick pay from day one? Is that likely to happen? I think that the noble Baroness, Lady Noakes, made this point. In what way would they be encouraged to employ somebody who has been on long-term sick leave if they must say, “Come and work for me—by the way, you can have sick pay from day one”, when they have taken all that time trying to persuade them to get back into work? At the very least, it becomes a bigger risk for the employer to take on such people: the very people the Government want to get back into work and who, for their own sake, should be in work, because the alternative is not doing them any good.
We need to be honest in this discussion. Sick pay was hard-fought for for all those years, but we live in a different time, when sickness is viewed differently. It is almost like a badge of honour in some instances, but it has also become a way of coping. To give your Lordships an example, when I was a further education teacher, some 25 years ago, it was the first time I had come across people taking time off for stress-related sickness. It was often when there had been a political dispute or some big row at work, or a disciplinary action had been taken. Instead of it being dealt with politically, people went on stress-related sick leave. Fair enough—that was fine when it was one or two people. But at one point, a third of the staff in a further education department of humanities were off on stress-related sick pay. As you can imagine, it was a dysfunctional department.
So I agree with the Minister when she said earlier that we are hoping that a happier workplace is going to have less stress. I get that point, but I genuinely think that something else is going on. That form of sickness has become a means for people to express their problems in a range of ways, and they lose the habit of work. My concern is that the Bill, particularly in respect of some of the less flexible ways this issue is being dealt with—in this instance, sick pay—will incentivise those regressive ways in which people are retreating from the workplace.
There is a report out today that says that Gen Zers, or whatever the term is, believe that the workplace itself makes them ill and that workaphobia has to be taken into account. I know that these concepts seem a bit flaky, but it is an academic study, so I am citing it. It says that what needs to be considered is that is why young people should be treated with leniency about not going into the workplace, because they find going into the workplace and interacting far too stressful. It is that kind of nonsense, to be frank, that I hope that we will not encourage inadvertently by this Bill.
Lord Vaux of Harrowden (CB)
My Lords, like the noble Lord, Lord Fox, I am a little puzzled by the groupings between this and the previous amendments. I have gone the opposite route and decided to speak to this group rather than the last one, but everything that I say in this group applies equally to Amendment 75, which would have created a review of the impact of the changes on small and medium-sized businesses. This group would require impact assessments to carried out for the various other effects that the Bill would have—so really it is the same subject.
Frankly, a lot of this would not be necessary if the Bill had been properly thought through from the beginning, if there was not so much detail to be filled in later by regulation and, in particular, if a proper impact assessment had been carried out on the various changes proposed. The Bill will, by the Government’s own admission, impose costs on business, disproportionately on smaller businesses, of around £5 billion, and will, again by the Government’s own admission, have potentially negative impacts on employment opportunities for those with poorer employment records. It is deeply unsatisfactory that it should not have been properly impact-assessed.
The Regulatory Policy Committee rated the impact assessment as “not fit for purpose”. It is worth reminding noble Lords what it said:
“Given the number and reach of the measures, it would be proportionate to undertake labour market and broader macroeconomic analysis, to understand the overall impact on employment, wages and output, and particularly, the pass-through of employer costs to employees. The eight individual IAs and the summary IA need to provide further analysis and evidence in relation to the rationale for intervention, identification of options (including impacts on small and microbusinesses) and/or justification for the preferred way forward”.
It is damning that that was not done before the Bill was presented to us.
Now, before the Minister points this out, I concede that the statutory sick pay individual impact assessment is the only one of 23 that is rated as good—in itself a pretty damning statistic. However, the impact assessment for the monitoring and evaluation plan for the statutory sick pay part is rated as weak. The noble Lord, Lord Hunt, has already referred to the potential behavioural aspects that arise, which are not in any way covered in the impact assessment. In fact, there is a complete cop-out; it says, “We can’t do this because of the behavioural impacts”.
Sadly, these proposed amendments and Amendment 75 in the previous group are clearly necessary, as are the others that we will debate later today and throughout the Committee process. The five-year review that the Minister referred to earlier frankly does not cut it, given the significance of the measures in this Bill and how quickly how they will have impact. Five years is way too long to wait to understand whether it is damaging.
I do not wish to test noble Lords’ patience by repeating this speech multiple times during the process of the Committee, so I ask the Minister to take as read my support for proper and timely reviews and assessments of the impacts of this Bill as we go forward.
Baroness Jones of Whitchurch (Lab)
My Lords, as noble Lords have identified, we are now continuing the important debate on statutory sick pay and specifically to address the impact of these measures on businesses.
It is important to highlight that the statutory sick pay system, and the changes that we have brought about as part of this Bill, is designed to balance providing support for the individual with minimising the costs to the employer. This group of amendments, Amendments 74A, 74B and 74C, tabled by the noble Lords, Lord Sharpe and Lord Hunt, would require impact assessments on absenteeism, enhanced sick pay schemes, occupational health, and short-notice shift working.
As I mentioned earlier, and as the noble Lord, Lord Fox, has already identified, the Government have already undertaken a regulatory impact assessment which considered the likely direct business impact of SSP changes. This included considering the impact on small and medium enterprises and sectoral impacts.
Overall, in the regulatory impact assessment, the Government estimated that the cost of delivering these measures would be approximately £15 extra per employee, a relatively modest amount when compared to the positive impacts that these changes will have for employees and overall productivity. I thank the noble Lord for the three amendments tabled in this group, all of which would require impact assessments. I look forward to debating those with the other 23 or so requests for impact assessments that the Opposition have already tabled. We have a plethora of requests for impact assessments. I reassure the noble Lord that we are at the same time updating our regulatory impact assessment and operating a post-implementation review of the measures—so the Opposition’s requests are probably not necessary.
On the noble Lord’s Amendment 74A, requiring an assessment of the impact of the changes to SSP in the Bill on absenteeism, we acknowledge that overall sickness absence may increase as a result of this Bill. This is not a loophole, nor are the Government not considering businesses; rather, it is the very objective of these changes to enable the lowest-paid employees to take time off when they are sick. Under the new system, employees will be able to take the time that they need to recover from short-term illness without struggling through work and often risking the spread of infectious diseases such as influenza. Similarly, employees with long-term or fluctuating conditions should feel able to take a day of sickness absence to manage their condition to prevent it worsening. The noble Lord, Lord Hunt, suggested that employees might be encouraged to misuse the system. However, if employers have the right policies and practices in place, the risk of inappropriate absenteeism can and should be mitigated.
Additionally, the noble Lord’s amendment would be quite difficult to deliver in practice. There is not a standard measure of absenteeism versus legitimate sickness absence, and in many instances, it would depend on whether you asked the employer or the employee. The Government intend to build on the regulatory impact assessment and, as I have said, we intend to conduct a post-implementation review of the measures in the Employment Rights Bill.
I turn to Amendment 74B, to assess the impact of the reforms in the Bill on employers’ ability to continue offering enhanced sick pay and occupational health services, particularly in low-margin sectors such as retail. I appreciate the noble Lord’s concern about the potential impact on this matter, and the Government certainly agree that it would not be in anyone’s interest for there to be a rollback of occupational sick pay or occupational health provision. However, the Government’s view is that these changes will serve only to strengthen the link between the workplace and the employee. I question why any business would want to use these changes as a reason to reduce the support that they provide their employees to help them stay in, and return to, work.
The noble Baroness, Lady Fox, asked about the Government’s policy on getting people back to work, and she was right to raise the issue. We are talking about a balance here; when people are sick, they should have the right to be off sick. I also accept the point that she made that being at work can in itself be a healing experience, and we should not lose sight of that—that there can be a positive health impact from being at work.
I once again draw noble Lords’ attention to the Keep Britain Working review. As I set out earlier in the debate, Sir Charlie Mayfield will consider recommendations on how the Government can support and enable employers to promote healthy and inclusive workplaces and support more people to stay in or return to work from periods of sickness absence. That review is expected to produce a final report in autumn this year. I believe that much of what the Keep Britain Working review is doing will address the noble Lords’ concerns, and I hope this reassures them that the Government are taking this matter seriously. We look forward to the results of the review.
Finally, I turn to Amendment 74C, which seeks to review the effects of the SSP changes on shift management and short-notice scheduling in the workplace. As discussed in relation to Amendment 74A, the number of sickness absences may go up as a result of these changes. This is because it would enable employees to take time off when they are sick.
I again reassure noble Lords that the Government are committed to understand the impact of these changes on businesses. We intend to conduct a post-implementation review of these measures in the Employment Rights Bill within five years of implementation. Additionally, as I set out in the earlier debate, the Department for Work and Pensions conducts regular employer and employee surveys and will continue to do so, providing further monitoring of the impact of SSP changes on a range of employers and employees.
However, this amendment would require the Government to collect a significant amount of data from businesses on what noble Lords will understand is quite a wide range of issues. We believe that this would be administratively challenging for them to provide, particularly in less than six months. This is the very thing that the noble Lord is seeking to avoid—the extra bureaucracy that he has talked about. For example, asking employers, including SMEs, to accurately record and report to government the frequency of shift cancellations and redeployments because of sickness absence is not practical or reasonable.
We have had a worthwhile, short debate on these issues, but I hope I have persuaded noble Lords that we are on the case and therefore that the amendment can be withdrawn.
Baroness Noakes (Con)
My Lords, the Minister said during her remarks that there would be a cost per employee of £15; I think she said that in the earlier group as well. Can she provide any more information on this? It seems counterintuitive. If the average number of sick days per employee is around eight, which is what the most recent survey data showed, that implies that employers are already bearing the cost of something like seven and a half days and are going to pay only for an extra half day. That does not seem to be consistent with the evidence of the nature of absences that also exist, which implies that most are at the shorter end and probably are going to be below the level at which they are currently being reimbursed by statutory sick pay.
It has been troubling me for some time, but I hope that the Minister will be able to provide some further information. I do not expect it from the Dispatch Box, although I would be delighted if it were to come from the Dispatch Box right now, but if she could write to me, I would be most grateful.
Baroness Jones of Whitchurch (Lab)
I suppose the simple answer to that is that it is in the regulatory impact assessment, which the noble Lord, Lord Vaux, acknowledged was one of the things that we got a fair rating for. I refer the noble Baroness to that, which I think will give more details.
Baroness Noakes (Con)
I have read it. There is no more detail in that impact assessment on the £15. That is why I am asking whether the Minister can provide further detail on how that £15 was arrived at.
Baroness Jones of Whitchurch (Lab)
I am happy to write to the noble Baroness.
Lord Fox (LD)
It would be very useful if she could share it with the other Front Benches as well.
Lord Hunt of Wirral (Con)
I am very grateful to the Minister. We have had a very important debate. I am particularly grateful to the noble Baroness, Lady Fox of Buckley, because we have not really spent enough time worrying about the people who are just unable to cope. Working conditions have changed so much. Stress-related sick leave is a huge issue, as is what the noble Baroness referred to as “losing the habit of work”. These are issues that we have to think about very carefully.
There is an important and complex issue of so-called presenteeism, which deserves greater attention in our discussions about workplace health and productivity. I came across some research—perhaps the noble Baroness had this in mind—carried out by Robertson Cooper: its 2023 data, drawn from over 3,000 UK respondents, revealed that almost two-thirds, 60%, of employees reported working while they were unwell, so-called presenteeism, in the last three months. That is an important issue, which has to be taken into account in any impact assessment.
The distinction is essential because not all forms of working while unwell are inherently harmful. Some, such as pragmatic or therapeutic presence, can be beneficial for both the employer and the employee. The challenge lies in identifying when presenteeism becomes detrimental and ensuring that workplace policy, including statutory sick pay reform, supports businesses in managing that balance effectively.
I am also grateful to the noble Lord, Lord Vaux of Harrowden, for reminding us of the finding of the Regulatory Policy Committee. We just need to be aware of the severe criticism that was meted out about a Bill that is making such profound changes while in the gloom of uncertainty, because no one can be actually sure what effect these changes are going to have.
“Review of parental leave(1) The Secretary of State must, within six months of the day on which this Act is passed, commence a review of paid parental leave.(2) The review under subsection (1) must explore—(a) the introduction of a statutory period of reserved, non-transferable paid parental leave for—(i) fathers;(ii) mothers’ partners;(iii) “second parent” adopters.(b) the level of statutory pay available to the parents listed in paragraph (a), through paternity leave, other reserved leave for fathers considered by the review or shared parental leave, and whether it is sufficient to encourage high take-up;(c) options for making paid leave available to self-employed fathers, and others ineligible for statutory support because they are not in regular employment, for example through a paternity allowance similar to the maternity allowance, currently available for mothers;(d) the extension of full employment rights, including redundancy protections, to fathers who take paternity leave and any other reserved leave considered by the review;(e) international examples of best practice in parental leave policy design.(3) The Secretary of State must lay the review before Parliament within 18 months of the day on which this Act is passed.”Member’s explanatory statement
This probing amendment specifies a number of issues that the proposed review of parental leave should consider, in particular a reserved, non-transferable period for fathers paid at a rate sufficient to encourage high take up. It also requires such a review to take place.
Baroness Lister of Burtersett (Lab)
My Lords, I am grateful to those colleagues who have added their names to Amendment 76 and to the Fatherhood Institute for its help.
I welcome the Bill’s improvements to paternity and parental leave, but they only scratch the surface of a policy that is letting fathers down badly. Moreover, it is disappointing to discover that paternity pay will not be a day one right—an issue addressed by Amendment 139 in the name of the noble Baroness, Lady Penn, which I support. Could my noble friend the Minister explain in her summing up why it will not be?
The amendment calls for a review of parental leave, which was required for drafting purposes, although I know that, in the Commons, the Minister reaffirmed an earlier welcome commitment to a review. The purpose now is to ensure that the review covers a number of key issues relating to fathers’ entitlement to paid leave in their baby’s first year, namely measures designed to improve fathers’ take-up of parental leave, including a “use it or lose it” period and adequate payment, taking account of international examples of best practice; the inclusion of self-employed fathers, who are currently excluded, and others currently ineligible for statutory support; the protection through full employment rights of fathers who take the leave; and the commitment to publish adequate take-up data in future years.
The aim is a simple one, on which I hope we will all agree: to strengthen the rights of fathers/“second parents” to be active parents, which, as I will argue, would thereby also strengthen mothers and prospective mothers’ labour market position. In doing so, it would further the Government’s own aspiration to achieve greater gender equality.
The current situation is pretty woeful as far as fathers are concerned. This has practical and cultural, symbolic effects: it is, in effect, saying that fatherhood is of lesser importance to family life and that, in so far as the labour market accommodates responsibilities for childcare, it need do so only for mothers. If we want to surround boys with positive symbolic messages about masculinity, what better place to start than to give their fathers the time they need to build strong relationships in infancy that last a lifetime, thereby showing that fatherhood is valued?
I do not have the time to give details of what fathers are entitled to compared with mothers, but suffice it to quote the Fatherhood Institute’s evidence to the Women and Equalities Committee’s current inquiry into the issue:
“As well as offering one of the least generous statutory paternity offers in the OECD … the UK is an outlier, especially among higher income countries, in the huge gap (50 weeks) between mothers’ and fathers’ entitlements to leave in the baby’s first year. By 2022 most countries in western Europe had a gap of 12 weeks or less”.
The partial extension of day-one rights does not touch the sides when it comes to the current shoddy treatment of fathers, which has resulted in low paternal take-up of paternity and shared parental leave. Paternity leave is dealt with by the other amendments in this group, so I will focus just on shared parental leave.
Take-up among fathers of the shared parental leave scheme, introduced 10 years ago, is a pitiful 5% of eligible fathers, according to a 2023 government report. The scheme is also skewed against lower-income families, with just 5% of the tiny population of SPL users coming from the bottom 50% of earners. Shared parental leave does not constitute an independent right for fathers: it depends on an entitled mother transferring part of her leave. The Government were warned at the time that this was going to fail in the aim of encouraging fathers to take the leave, and it did. This is in part because of the way the scheme is constructed, in part because the low rate of payment means that many fathers cannot afford to take it, and in part because some, such as self-employed fathers, are excluded altogether.
This matters for fathers, mothers, children and family life, as well as for the Government’s number one priority of economic growth. It matters for fathers because it makes it very difficult for them to play an equal, hands-on role in the upbringing of their infant children, which, increasingly, fathers wish to do. It matters for mothers because, to quote the Women’s Budget Group, of which I am a member:
“Unpaid care is the root cause of women’s economic inequality”.
So long as women carry so much of the responsibility for childcare in the private sphere, they enter the public sphere of the labour market with one hand tied behind their back. Too many women’s careers fall off a cliff when they become mothers. As the Women and Equalities Committee’s call for evidence states:
“Unequal division of childcaring responsibilities is a key driver of … gender inequality and the gender pay gap”.
It matters for children in two-parent families, not just for their relationship with their fathers but also, the evidence suggests, for their educational and cognitive development and overall family relationships. Research indicates that paternal engagement during the first year can foster ongoing engagement until a child is aged at least 11 and that this positive effect builds over time. It matters for families, as it can affect family well-being and stability.
It matters, too, for economic growth. The Joseph Rowntree Foundation and Centre for Progressive Policy calculate that more generous provision for fathers, earmarked for six weeks, could deliver nearly £2.7 billion net to the wider economy as a result of strengthening mothers’ labour market position.
The amendment requires a review to take account of international examples of best practice, because we have so much to learn from the many countries that are way ahead of us on this issue. In particular, the experience of the Nordic countries and some others, which have for some years included a reserved period of parental leave for fathers on a use-it-or-lose-it basis in their schemes, suggests that this model, together with adequate payment—I emphasise that—is the best way of ensuring fathers take up the leave, leading to a more equitable division of childcare responsibility between parents and enabling mothers to participate in the labour market on more equal terms.
Most see this as a better and more effective model than extending paternity leave, because it separates out the caregiving function of parental leave from the health and safety function of maternity/paternity leave and, after the first two weeks, it signals clearly that the father can take it at a later date, ideally on his own, helping more mothers resume their employment earlier. As the Fatherhood Institute notes:
“Reserved parental leave for fathers is seen as key to reducing both the gender wage gap and the gendered gap in men’s and women’s participation in paid employment – both of which act as an impediment to economic growth”.
In a book I wrote many years ago on feminist approaches to citizenship, I identified such schemes as a key social policy lever for promoting greater gender equality and recognising the importance of care to men as well as women and to wider society.
Much as I would like to see this as one result of the review, I should stress that the amendment in no way ties the Government’s hands as to this or any other outcome, apart from the provision of adequate take-up data. It could be seen as the soft-cop amendment to the hard-cop amendments by the noble Baroness, Lady Penn, which would require action now—I do have some sympathy for those, but we are where we are. That said, if the review fails adequately to consider the issues that Amendment 76 raises, then I fear it will be met with widespread derision.
I hope, therefore, that my noble friend will feel able to accept the amendment, in this or some other form, as a signal of intent. If not, at the very least, I would ask her to make clear on the record the Government’s acceptance that the current situation disadvantages farmers unfairly and that it must be a clear and explicit aim of the review to create a system that properly supports fathers and other second parents to play a full role in their children’s lives.
At Second Reading, my noble friend she expressed respect for the points that I and the noble Baroness, Lady Penn, made about parental leave and the desire to go further. However, she said that
“we must strike the right balance, while continuing to ensure that this remains a pro-worker, pro-business Bill”.—[Official Report, 27/3/25; cols. 1925-26.]
But the current situation is totally unbalanced as between the rights of fathers and mothers. Moreover, workers are gendered beings, and thorough reform of parental leave is in no way anti-business. Indeed, it would help ensure business can benefit fully from the contribution of female as well as male workers and would, as I have said, thereby contribute to economic growth.
Thus, on gender justice and pragmatic economic grounds, I hope the Government will accept the amendment and send a strong symbolic message to male workers that their role as fathers is fully recognised and valued. I beg to move.
Lord Palmer of Childs Hill (LD)
My Lords, I speak to Amendments 80 and 136 in my name. These purely clarify an entitlement to paternity leave and really follow on from the remarks by the noble Baroness, Lady Lister, on Amendment 76. Amendment 80 would extend statutory paternity leave to six weeks and allow new fathers to take this leave at any point within the first year after their child’s birth, rather than being restricted to the current 56-day window. At present, eligible fathers are entitled to just two weeks of leave, paid at a rate of less than half of full-time earnings at minimum wage. Take-up remains low and affordability is a major factor; 62% of fathers say they would take more leave if statutory paternity pay was higher.
Greater equality in parenting is essential to achieving greater equality in the workplace. At present, the unequal distribution of caring responsibilities is a major driver of the gender pay gap. On average, a woman’s earnings fall by approximately 40% following the birth of her first child and often do not recover. By contrast, men’s earnings remain largely unaffected.
Baroness Penn (Con)
My Lords, I will speak to Amendments 127, 128 and 139 in my name. Before doing so, I would like to add my support to all the amendments in this group, in particular Amendment 76 of the noble Baroness, Lady Lister, to which I have also added my name.
As we have heard already, our current system of parental leave is in desperate need of reform. For some of that reform, I accept a review is necessary. How can we improve shared parental leave? This is something that I was proud to have worked on during the coalition Government, but I and the noble Lord, Lord Palmer, have to accept that this has not delivered the change we want to see. Also, how do we extend parental leave to self-employed people—mums, dads and adoptive parents—at a proper rate of pay?
As the noble Baroness, Lady Lister, knows, I believe she is being too generous to the Government with her timelines. When this Government first took office, the Employment Rights Minister, Justin Madders, committed to the review of parental leave being completed within their first year; now, it is meant to be launched within their first year. On Report in the Commons, the Minister committed only to a launch ahead of Royal Assent of this Bill, which even on the most optimistic timetable will be after 4 July.
As well as giving important clarity to the points that the noble Baroness, Lady Lister, has made—calling for the review to cover key issues, including measures designed to improve fathers’ take-up of parental leave, such as a dedicated period of leave, adequate payment and the inclusion of self-employed fathers—could the Minister give us some reassurance on timelines? Will the review be launched within Labour’s first year in office? How long will the review take? To me, six months seems a reasonable period of time to report back on its outcomes, but I look forward to hearing from the Minister what the Government’s plan is.
While reviews are perhaps necessary in some areas, it is important not to confuse a review with action. The Minister kindly met with me last week to discuss my amendments, and it was clear at that meeting that the review would not be a consultation on specific proposals; those would have to come later. Added to any timelines for action would be a consultation on the outcomes of the review, and then, subject to its findings, further legislation. In reality, we are talking about a timeline extending over several years.
I am afraid that is not good enough on an area where there is clear evidence to support action now, and that is on improving paternity leave. It has been said that we are an outlier on how bad our paternity leave is in the UK and how unequal provision is between mums and dads or second parents. And yet, if you increased paternity leave to six weeks’ pay at 90% of salary, capped at average earnings, as my Amendment 127 does, the evidence for the benefits is overwhelming.
As the noble Baroness, Lady Lister, has said, it would improve things for dads. This week is Mental Health Awareness Week. According to research by the Dad Shift and Movember, nearly half of new dads report experiencing multiple symptoms of depression in the first year after their baby is born; 82% of them agree that better paternity leave is the number one thing that the Government could do to protect new dads’ mental health. We have heard how it will support new mums and kids too. And it will support economic growth—and that is meant to be this Government’s number one priority.
This last point is really important. In our discussions on this Bill, I am acutely aware about the concerns employers have expressed about many aspects of the Government’s plans, but, in the context of our earlier debate on statutory sick pay, it is important to remember that statutory paternity pay is reimbursed for businesses at a rate of 92% for larger businesses and 108.5% for those which qualify for small business relief. Of course, it is not only the pay that affects business but also the prospect of more administration and disruption, which can be a concern. This is why for smaller businesses the government compensation rate is at over 100%.
As we are so far behind many other countries when it comes to paternity leave, we can look at whether those concerns have been borne out in practice when leave is more generous. The short answer is that they have not. A study by the National Bureau of Economic Research in the US on Danish parental leave showed no reduction in firms’ output or decline in the wellbeing of other employees at the firm when parents took time off at the birth of their child.
One of the reasons that better paternity leave has the potential to bring such significant economic gains is that, although you lose the dad's economic output for the time he is off, the loss is limited to that period only, whereas for mothers you see an increase in labour market participation and hours worked on a sustained basis, increasing the level of economic activity overall. Reimbursing paternity pay would come at a cost to the Government, but again increased economic activity as a result of the policy would offset four-fifths of that.
It might also be argued that it is not a priority for employers or employees when there are so many other issues that need our attention. However, only 18% of the public think that two weeks is enough paternity leave and 81% agree with the statement that “I believe that giving fathers a decent amount of paid paternity leave so they can be a bigger part of their children’s lives is good for families and good for the country too”. That includes a majority of support from voters from all political parties across the spectrum, including Reform.
As I mentioned, many employers already offer enhanced pay and leave, because they see the benefits for their employees but also, as companies, for recruitment and retention of staff. According to CIPD data from 2024, around 30% of organisations enhance paternity leave beyond the statutory two-week minimum, and around 37% enhance paternity pay beyond the statutory provision.
If this is the case, why is government action needed? For two reasons, I think. First, we are talking about a culture shift. Our system of paternity leave does not reflect many people’s attitudes and plans for starting a family in today’s society. None the less, moving away from the current system is a big shift for our society, and it is one that will not happen on its own. At the moment, the statutory system tells employers that two weeks is enough, and it tells employees that that is all they can expect.
The second reason, as I have said, is that the Government reimburse employers for the statutory system. If a firm wants to go further than the statutory entitlements, they bear the burden of all the costs. That is particularly difficult for smaller businesses. While there are long-term benefits for employers, we also get benefits as a society for supporting people to start and grow their families, and we should recognise that. The CIPD asked employers about their views on paternity leave in 2022 and 2024, and almost half supported extending the statutory paternity leave and pay system, with only 24% opposing it.
Finally, I turn briefly to my other amendments in this group, which would make smaller, but none the less important, improvements to our system of paternity leave. Amendment 139 takes the new day one right to paternity leave included in this Bill and makes it paid. I have to confess that, from everything the Government had said, I thought it would be paid, as they always talk about extending the right to paternity leave and unpaid parental leave. Well, parental leave is always unpaid, so specifying it for one but not the other feels a little misleading.
It also makes no policy sense. We know the biggest barrier to take up of paternity leave is financial. The current statutory rate may be low, but it is far better than nothing at all, particularly at such a point of financial stress in families’ lives. It makes no sense to me that Ministers and the Government acknowledge that paternity leave should be a day one right but are introducing it in a way that makes it hard, if not impossible, for those who most need it to actually take it up. On the subject of costs to businesses, this would be minimal. As I have said, they are reimbursed for this cost.
Amendment 128 would require businesses with 250 or more employees to publish their leave policies on their websites. That would help people thinking about a job move to have transparency on what their entitlements are, and it would help create a race to the top, where companies would need to keep pace with their competitors to attract the best talent.
Unlike almost every other measure in the Bill, this policy has actually been consulted on. It showed that 98% of respondents supported the proposal, including 96% of businesses and business representative organisations. One of the consultees could be considered to be Sir Keir Starmer. He was asked about this policy by Mumsnet in 2020 and said:
“I completely support this. In fact I’m really surprised it hasn’t already happened … I will wholeheartedly support this”.
Perhaps, in responding to this debate, the Minister can explain to the Prime Minister why this has not happened already and why his Government do not want to take the opportunity of this Bill to correct it.
Baroness Morrissey (Con)
My Lords, I am also pleased to support Amendment 76 in the name of the noble Baroness, Lady Lister, and add my voice to others in the Chamber asking the Government to review paid parental leave in this country. I confirm, as someone who is involved with a number of multinational businesses, that Britain certainly has fallen behind the modern practices of other countries.
I appreciate that, as my noble friend Lady Penn has already said, some Members of this Committee might consider this to be a matter best left to businesses rather than government policy or law. Unfortunately, in my experience, many British employers—not the ones cited by my noble friend Lady Penn, but the others—take a rather old-fashioned view of paternity leave, leaving the UK at risk of continuing with this unusually gendered approach to parenting and childcare, which is ultimately detrimental to society, to women, to men and to the economy.
As set out in my registered interests, I chair the Diversity Project, which seeks to future-proof the investment industry’s ability to attract and develop the very best talent. We have been working with almost 120 member firms on enhanced paternity leave and pay. There are a number of early adopters, including Aviva, Mercer, Janus Henderson and Julius Baer, which have all reported positive impacts on culture, retention and staff morale. In a “Dragons’ Den”-style competition —I do not see the noble Lord, Lord Sugar, in the Chamber—at our International Women’s Day event earlier this year, somewhat ironically, enhanced paternity leave was voted overwhelmingly by the audience as the single biggest game changer for women’s progress. I endorse the point made by the noble Baroness, Lady Lister, and others that this would help drive gender equality.
Baroness Jones of Moulsecoomb (GP)
My Lords, I will speak to Amendments 127, 128 and 139, which I have signed, but all the amendments in this group have real value.
In my relatively long life, in which I have argued endlessly for human rights, I think there can be only one or two times when I have stood up and argued for men’s rights, because I feel they have plenty of them and they do their own arguing. But, of course, this is a human rights issue. It is not just men’s rights; it is women’s rights as well, because the mothers will benefit if the fathers have parental leave.
Statutory paternity leave does not support families only in their first weeks; it helps rebalance society by moving away from a statutory parental leave system, which sends a strong message that parenting is a woman’s job and that men should keep working and stay out of the home. That idea is not just present in the legislation; it is embedded and deeply rooted in many people’s prejudices. Maternity leave is already a very hard-fought and essential right, but the imbalance between maternity and paternity leave is structurally embedding gender differences that do not benefit society.
This legislation can set young families up for a stronger start by ensuring that new fathers have plenty of paid time off work in those early weeks and months that are so crucial to a child’s development. I hope the Prime Minister was listening to the remarks of the noble Baroness, Lady Penn, and that he will perhaps urge this House to adopt at least some of these amendments.
Lord Russell of Liverpool (CB)
My Lords, I have put my name to Amendment 76 in the name of the noble Baroness, Lady Lister, and Amendments 127 and 128 in the name of the noble Baroness, Lady Penn. I rise as one of, I think, only two fathers in this debate so far and, as it happens, a recent grandfather. I thought it would be helpful to have a little bit of balance in a discussion on a group of amendments which is about what appears to be an imbalance in the respective roles of fathers and mothers.
It seems to me that there are three key reasons to act, rather than to think and debate and dance on the head of an ever-smaller pin. The first is the early years argument. I, together with other noble Lords and noble Baronesses, will be arguing the case for early years being included and very deeply thought about in the Children’s Wellbeing and Schools Bill. Indeed, the Secretary of State for Education yesterday said that early years was her number one priority. It is inarguable that changing our approach to paternity pay and giving fathers the opportunity to have a much greater presence in the lives of their children in the early years—and also, very importantly, in support of their partner or spouse, particularly if she is working or is attempting to work—is frankly a no-brainer. In that context, that is a very good first reason.
The second reason is that the economic arguments for this are also very strong. The report by the Joseph Roundtree Foundation, which came out only three weeks ago, and which was mentioned by, I think, the noble Baroness, Lady Lister, is fairly convincing. It says:
“Building on the evidence from other countries on the impact of paternity leave, the”
Centre for Progressive Policy—one would imagine that His Majesty’s Government would be in favour of an institute with a name like that—
“has modelled the economic costs and benefits of more generous paternity leave options. This novel model was built to help policy-makers understand the labour market effects – and associated economic and tax costs – of varying paternity leave terms in the UK”.
Its conclusions were very simple:
“The modelling shows a positive economy-wide effect of £2.68 billion, driven by the gains achieved when more women move into work and work more hours”.
The second bullet point is particularly apposite to the Government’s aims and what they are trying to achieve with the Bill:
“The modelling also shows that the increase in labour market outputs for this policy option is mainly driven by those at the bottom and middle of the labour market”.
That is a policy outcome you would think was very close to the Government’s heart.
Turning to the third and final reason, for 31 years I was a professional headhunter and, as a headhunter, you become relatively expert in what I might call the psychology of attraction and repulsion—what attracts people to particular types of employment or employer, and what detracts from that degree of attraction. There is increasing evidence to show that companies that are thoughtful, progressive and transparent about the offering they are making to both fathers and mothers stand a much better chance in this labour market of attracting people of real talent who have many choices they could follow up on. Also, relating back to comments made by the noble Baroness, Lady Fox, in a previous group, an important issue is that many individuals have a degree of trepidation about working for potential employers because they are uncertain of the working environment and how it might impact on their ability to play a full part in family life.
For those three key reasons, I support not only having a long hard look at paternity leave—as the noble Baroness, Lady Penn, said, frankly, we have been looking at it for longer than is either necessary or good for us—but, for the good of families and children, just getting on with it.
Baroness Whitaker (Lab)
My Lords, I add my support to this group, in particular to Amendment 76 in the name of my noble friend Lady Lister. I commend her illuminating and penetrating introduction. Indeed, all the speeches that we have heard set out a very strong case.
When I worked in an organisation, I had women colleagues whose partners could not afford to take even the leave they were entitled to, thus further burdening the tired mother and losing those irreplaceable bonding first days, to the detriment of both child and father, as many noble Lords have said. That bonding and support for the mother is just as important for adoptive fathers and stepfathers. Why should self-employed fathers be unequally treated? They are just as much fathers. I hope that my noble friend the Minister will carry out the review as set out in this amendment.
Lord Bailey of Paddington (Con)
My Lords, I support Amendments 127, 128 and 139 from my noble friend Lady Penn. I too am a father, so I have an interest in that regard. These amendments will be very useful to the poorest families in the country because currently, only the very well paid get access to serious paternal leave.
As someone who comes from a community that has suffered horribly from the absence of fathers, I know that an early intervention that ties a father emotionally, financially and in any other way to that family unit is very important. The impact it has on educational outcomes and the finances of the family into the future are hugely important. My community is more than three times more likely to be impacted by poverty and all the downsides that poverty inflicts because of that lack of an initial paternal connection to the family.
This country is also facing a very low birth rate. Many young men in this country will tell you that they cannot afford to have children. Paternity leave will be a big part of addressing that. So, supporting our birth rate in this country—addressing that demographic time bomb—is very important.
The mental health of men in this country has been poor for a very long time. Part of turning that around is improving how fatherhood is perceived, so that young men in particular lean into that role and take pride in being a father. That also has a strong knock-on effect for the women involved: they receive support in the home, and it helps them return to their own careers, as we have heard from so many Members of your Lordships’ House. In the poorest communities in this country, many of the real breadwinners in the household are the women. If they can be supported back to work, that will have a profound impact on the mental well-being of the entire family.
I have been on a personal journey to make this a day one right. Because of the profound effect that the lack of a father in the household has on many aspects of society, this should be a day one right. Basically, some things are just worth paying for, and if this has a cost to the Government, so be it, because the upsides, socially and financially, are massive and beyond measurement.
Lastly, as is well documented and as many noble Lords have already said, the benefits to companies are profound. The challenge will be the smaller companies, where one or two people form a significant proportion of the workforce. That is where this conversation has to be sold, where the rhetoric is important, because if smaller companies adopt this approach, I believe it will happen. Larger companies already know the benefits this has for their workforce.
Lord in Waiting/Government Whip (Lord Katz) (Lab)
My Lords, I beg to move that the debate on this amendment be adjourned.
Lord Katz (Lab)
My Lords, it has been agreed by the usual channels that we break at a time convenient for the Minister to make a Statement, thus allowing her to continue her other business outside the House.
Lord Katz (Lab)
My Lords, if I felt we were able to finish the group in the next five minutes, that would be fine. We have had a good debate, but this is an important topic, and it is important that the Committee is able to finish the group by hearing from any other Back-Benchers who might wish to contribute, as well as from the Front-Benchers and the Minister. All of the Committee might not be aware of it, but we have agreed through the usual channels that we will have the dinner break early to accommodate the repeat of the Statement. We are ultimately in the whole Committee’s hands. That is why we are breaking now. I know it is not usual to break midway through a group, but, as I say, it has been agreed through the usual channels that a dinner break at 6.30 pm would take priority. Perhaps we can resolve this.
Lord Sharpe of Epsom (Con)
I have had confirmation from my side that the usual channels have agreed.
Baroness Jones of Moulsecoomb (GP)
I am grateful to the noble Lord, Lord Katz, for his explanation.
Baroness Jones of Moulsecoomb (GP)
Stop groaning.
Normally, if today’s list says, “at a convenient time”, that means at the end of a group surely.
Lord Katz (Lab)
As I said, I understand that this is unusual, but it is in no way unprecedented. We have broken in the middle of a group before. It is not ideal, but we are where we are. I think it is in the best interests of the Committee, especially as it has been agreed through the usual channels, to hear from both Front Benches and any other Back-Benchers on this group in good time, and to hear, in the meantime, a repeat of the Statement from the Minister, so that everybody gets the best of all worlds. I know this is not usual practice, and we will endeavour not to do it on future Committee days.
Trade Negotiations
(1 day, 18 hours ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
Lord Sharpe of Epsom (Con)
My Lords, we on these Benches welcome free trade. It is a cornerstone of a prosperous and competitive economy. It benefits everyone, from workers to businesses and from consumers to industry sectors. Trade allows us to access a broader market, to promote innovation and to create jobs. When done right, it provides opportunities for the UK to grow and to succeed on the global stage. This deal is a reminder of one of the key benefits of Brexit. No longer bound by the limitations of collective EU decision-making, we now have the freedom to forge our own trade agreements, tailored to the strengths of our economy and aligned with our national interest. That sovereignty over trade policy is a fundamental asset and one that, used wisely, can bring real and lasting prosperity. I confess that I am at a loss to understand why the Government have repeatedly said that this is a matter of opinion and not fact.
However, while we acknowledge the importance of trade agreements and the positive elements of this UK-US deal, we must approach it with a critical eye and an understanding of the broader context. Trade deals are not simply about negotiating numbers or quotas; they must also be about fairness, sustainability and long-term growth. In this case, I am concerned that the deal, while a step in the right direction, does not go far enough in delivering the kind of comprehensive, ambitious agreement we need.
The agreement announced with the United States contains some very welcome steps—for example, tariff reductions on cars, access for UK beef producers, and the removal of punitive levies on British steel and aluminium, to name but a few. The Government are right to highlight the thousands of jobs that will benefit from these provisions. However, take, for example, the automotive sector: there are more questions that need answers. Reducing tariffs from 27.5% to 10% is undoubtedly welcome, but this deal covers only a relatively small quota of 100,000 cars, a figure that represents just a fraction of total UK car exports. What happens when that quota is reached? Are we going to see tariffs increase again? Where are the long-term assurances for our manufacturers and workers? A more strategic and forward-thinking approach is needed.
This cannot be the end of the road. If we are to make the most of our new trading freedoms, we must push for a comprehensive free trade agreement, one that goes beyond quotas and partial tariff relief and that delivers true long-term certainty for British businesses, across every sector. The 10% reciprocal tariff on a range of UK exports remains in place, affecting sectors that are critical to our industrial base and our export strength. The Government must be clear. When will negotiations begin to eliminate these tariffs, or have they already started? We urge Ministers to move beyond vague commitments that work will continue and to set out a clear timetable and a strategy for achieving a more ambitious deal.
There is particular disappointment in the pharmaceutical sector, for example, where the UK has not yet secured a carve-out from remaining tariffs. This is an industry where Britain leads the world. We are talking about jobs, innovation and the secure delivery of life-saving medicines. We must see more urgency from the Government on this front. What of the creative industries, specifically film and television? The failure to secure any protection for this sector is alarming. The threat of 100% levies on UK-made films exported to the US remains a serious concern. This is a world-leading industry with the potential to deliver billions to our economy and to showcase British culture on the global stage. It deserves far greater attention from the Government.
We on these Benches are not here to oppose free trade; we champion it. However, we want to see trade deals that are ambitious, balanced and comprehensive, and that reflect the best of Britain and support all our key sectors, from farmers to filmmakers and from scientists to steelworkers.
The Minister was somewhat vague in answer to the question from the noble Lord, Lord Purvis of Tweed, yesterday on parliamentary scrutiny of the deal. In an effort to save her from writing many letters, perhaps she can update us on this now.
This deal is a good start, and that deserves to be recognised, but the Government must now finish the job. We call for greater transparency, clear timelines and firm commitments to extend this agreement into a full and fair free trade deal that truly reflects the potential of post-Brexit Britain.
Lord Purvis of Tweed (LD)
My Lords, I look forward to the Minister answering my question from yesterday, as referenced by the noble Lord.
I wish to refer exclusively to the India agreement. We have debated in this House on a number of occasions UK-India trade, and on those occasions I have rehearsed the long-standing position on these Benches that free trade is part of our party’s DNA as a political movement. We believe fundamentally that free trade benefits consumers and businesses alike, and, combined with the means by which it is fair trade and inclusive, that it can be beneficial for wider policy ambitions on climate, sustainability, social justice and the reduction of poverty. These are the parameters by which we will judge any agreement that this Government sign with other Governments, as they were for the previous Administration, and specifically on the agreement with India.
We start from the position that we wish this agreement and the Government well in ensuring that it is the basis upon which India trade can develop. This is a complex time in international trade, as it is buffeted by policies and chaotic uncertainty from the United States. The fact that India has now signed an agreement with the UK, and that on Monday the second round of negotiations on an FTA between India and the European Union began, shows those of us who believe in widening free trade around the world that we need to redouble our efforts to reinforce the global trading environment and the rules upon which it is based.
The India agreement has been launched with a high degree of boosterism, last seen under the Boris Johnson Administration, and of course we would be a world leader in trade if press release assertion was a commodity. The Government say that we have a series of anticipated benefits as a result of this agreement. No doubt the Minister will rehearse some of those in her reply. However, looking carefully at the Government’s technical papers and not the press release, we can see that the cash figures of potential GDP growth, which she may quote in a moment, are purely a mathematical extrapolation of potential global trade in 2040, which the Government have then converted into pounds sterling, taking a starting point of 2023. This does not take into account the Trump Administration’s disruption of global trade. Therefore, all the cash figures that are presented are purely illustrative.
The technical papers also helpfully suggest that the Government made a policy decision to round up to 0.1% for the growth figures. Rounding up to 0.1% highlights that there will probably be modest results. Furthermore, very deep in the Government’s papers is that, to get their very ambitious figures on UK trade growth, the Government have taken the starting point as the baseline of 2019, which does not take into consideration the pandemic, the Ukraine war and the Trump supply chain issues. So they start at a high point in order to get higher. We do not necessarily oppose the agreement in principle, but we look at it from perhaps a more realistic and sober perspective. The issue then becomes how we will support our businesses to take advantage of the new market access arrangements.
According to the United Nations data figures, India has seen its exports rise over the last 10 years by 13.2%. This is an export market which the UK consumer wishes to benefit from. UK exports over the same time have expanded by only 5.1%. This is marginal growth over a decade, so it is right that we want to be part of a growing market. However, the European Union export growth has expanded by over 9.5% over the same period, nearly double the UK rate. We now have barriers erected, additional costs and more bureaucracy with the European Union, and we are trying to reduce them for India. So the fundamental issue is not that we have a tariff agreement but how British businesses will see the Indian market as barrier-free, open and accessible across all states, and reliable under the rule of law, with less corruption, more transparency—so that we trade more—and businesses supported more to access the market, which this agreement theoretically facilitates. What are the practical steps of actively supporting businesses that will take advantage of this agreement?
Because there is little reference so far in what the Government have said, can the Minister confirm that the agreement will include a human rights chapter, with clearly articulated mechanisms to address human rights supply chain concerns that have been raised in this House on a number of occasions, including by myself—for example, on broadcasting and civil liberties. If there is to be market access on digital, media and broadcasting, are we ensuring that it is reciprocated and that the restrictions that have been put in place for media have been lifted? Can the Minister confirm that there will be a climate chapter in the agreement that demonstrates that this agreement reduces emissions rather than contributes? On Monday, India and the EU announced their intent for an agreement by the end of the fourth quarter this year. Whether this happens is out of the Government’s hands—I completely understand that—but any comparative advantage that we are likely to have as a result of this agreement is likely to be impacted if there is an agreement between India and the European Union. On rules of origin and other areas of standards, how will we triangulate between India and EU trade?
Finally, I will ask the Minister about potential trade diversion and preference erosion as a result of this agreement. The House is well aware that I look for all the juicy details of these agreements in annexes, and typically on every page after page 200. In the previous Government’s scoping document, annex 9 of the technical paper showed that, with all the likely potential trade benefits for the UK of over £5 billion, which is very similar to this Government’s estimate, it is likely that there will be trade preference and trade erosion of over £3.25 billion.
What does that mean? It means that we must discount all of the benefits from the India agreement with the diversion of trade and the preference erosion from other countries—primarily Bangladesh, Pakistan, Kenya, Senegal, Ghana, Indonesia, the Philippines and Jamaica. For Bangladesh alone, the previous Government estimated that the trade erosion would be £1.5 billion less trade with the UK. So I hope the Government will have an impact assessment clearly articulating the likely trade erosion and trade preference. Will there be primary legislation as a result of this, what will be the extent of it and when are we likely to see it?
The Minister of State, Department for Business and Trade and HM Treasury (Baroness Gustafsson) (Lab)
My Lords, I thank the noble Lords for their questions and responses to the Minister of Trade’s policy Statement. It is lovely to see the full support for trade that we all share. I am happy to answer the questions, but, before I do, I will take a step back and quickly consider the agreement that we are due to discuss in context.
Fundamentally, as the noble Lord, Lord Purvis, said, the UK is a trading nation. The reality is deeply rooted in our DNA and that remains true to this day. Stronger trade ties with our partners around the world and championing free, fair and open trade delivers back here at home, generating growth, boosting wages and supporting jobs in every corner of the UK. It is this attitude and openness to trade that has helped cement the UK’s global reputation as being open for business and a home to iconic brands that are sought after all over the world. That is why we have always been clear-eyed in pursuing a deal with India, one of the fastest-growing economies in the world. Despite the strong ties connecting our two nations, not least through our people-to-people connections, there has always been room to strengthen our economic connections.
The deal we have does just that. This is a modern and comprehensive agreement that will increase UK GDP by £4.8 billion in the long run. Our bilateral trade, which is already £43 billion, will increase by £25.5 billion, £15.7 billion of which is expected to be UK exports. India has agreed that, from the first day this deal enters into force, it will cut tariffs worth £400 million on UK goods, a number that will jump to £900 million after 10 years. We have unlocked unprecedented access to India’s procurement market, giving UK companies access to 40,000 tenders worth £38 billion. New commitments of customs and digital trade will make it quicker, cheaper and easier to trade with India than ever before.
I hear the challenge about how those spreadsheets work and the models that sit behind them, and whether we are being optimistic. These are very realistic and measured, but ultimately an approximation of the benefit that this opportunity will bring us. It is also not a limit. We do still have the opportunity to benefit above and beyond the numbers that we have stated. I assure your Lordships that this is based on the modelling of worldwide standards but, at the signing of that trade deal, a full impact assessment will also be published to give noble Lords a little bit more small print to crawl through as well, which I know they will enjoy.
We have locked in access for our service companies, promoted stronger ties in a variety of areas—from innovation to gender to anti-corruption—and, most crucially, we have provided businesses with a certainty in a time when it is dearly lacking. I welcome the support that this deal has already had from across the House and from those who have recognised this for what it is, a landmark agreement with one of the most exciting and dynamic economies in the world.
I have also been warmed by the support from the businesses that will be using this deal, including the British Chambers of Commerce, the Institute of Directors, the Confederation of British Industry, the Scotch Whisky Association, the National Farmers’ Union, the Food & Drink Federation, techUK, Small Business Britain, the Premier League, Standard Chartered, Smith & Nephew, Coltraco and more.
I want to address the double contributions convention, which we have agreed to negotiate and implement in parallel with this free trade agreement. There has been much speculation, and indeed misinformation, regarding this element of the agreement. To set the record straight, this is a reciprocal agreement which is designed to prevent the double payment of social security contributions for a specific group of workers known as “detached workers”, who are sent by their employers on a temporary basis and whose long-term jobs are based in their original country. These agreements are for the benefit of both countries. The UK has agreed numerous DCCs over recent years, including with Iceland, Norway and Liechtenstein in 2023, Switzerland in 2021, the EU in 2020 and Chile in 2012.
There has been speculation this will make it cheaper for UK employers to hire temporary Indian workers than it is to hire British workers. This is not true. This applies only to Indian workers who are sent by their employers based in India to work temporarily in the UK for up to three years. There have also been claims that this agreement undercuts UK workers. In fact, the double contributions convention supports UK workers, particularly those in our world-class service sector. As a whole, this agreement will boost wages in the UK by £2.2 billion, putting money into the pockets of working people right across the country.
I am well aware that many in this House will rightly be keen to understand the intricacies of this agreement and have a keen eye for detail. We have already published the summary document, which includes a brief overview of every chapter within the agreement. My officials are working at pace to prepare the legal treaty, which will be available once the agreement is ready to be signed. As with any free trade agreement, parliamentarians will have ample opportunity to scrutinise the deal, which is subject to the usual ratification procedures under the Constitutional Reform and Governance Act 2010. The double contributions convention will also be scrutinised by Parliament via the standard processes outlined in the CRaG Act. Any legislative changes required will be scrutinised and passed by Parliament in the usual ways before ratification.
I hear the challenge about the human rights record. The UK is a leading advocate for human rights around the world, and we remain committed to the promotion of universal human rights. Where we have concerns, they are raised directly with the Government of India, including at ministerial level. This has been undertaken separately to these trade negotiations, although they are part of building open and trusting relationships with important partners. The avenue to communal trade supports our ability to influence in these matters far more greatly.
There was also a question about whether we are eroding trade and how that will be received. We set out further information on the trade diversion impacts of this agreement in our impact assessment. This free trade agreement will include India’s first ever trade and development chapter in an FTA. Both the UK and India will monitor the effects of the agreement on developing countries. To facilitate effective dialogue in this space, we will aim to share our research and understanding, and this will in turn help inform future development programmes and policies.
To conclude, as my colleague the Trade Minister rightfully outlined in the other place, this deal affords UK businesses certainty and stability during a time of global uncertainty and instability. It is a deal that will give British businesses access to one of our biggest markets abroad while raising wages and driving growth here at home.
Lord Hannay of Chiswick (CB)
My Lords, I thank the Minister for that account of the agreement with India and the deal with the United States. She said what the processes will be for the India deal with respect to this House—that the CRAG arrangements will be triggered—but she has not said anything about the deal with the United States. First, could she possibly reply to the question: what parliamentary scrutiny process will be applied to the deal with the United States? Secondly, could she say whether the United States deal is consistent with the UK’s MFN—most favoured nation—treatment under the General Agreement on Tariffs and Trade, and also whether the US agreement will fulfil the provisions of Article XXIV(6) of the GATT to give a waiver to any discrimination?
Baroness Gustafsson (Lab)
I thank the noble Lord for his question. I think he knows that yesterday I commented that I would follow up in writing with the specifics on that, and I will endeavour also to include the noble Lord in that response. As I commented yesterday, my parliamentary knowledge is thin but building, but it is not yet at Article XXIV of the GATT.
Baroness Curran (Lab)
I say to my noble friend the Minister that I warmly welcome this Statement, most particularly its emphasis on the negotiations with India in respect of the Scottish whisky industry and the benefits it will bring for that industry but also, more broadly, for the Scottish economy. Will my noble friend the Minister confirm that these negotiations will reduce tariffs on Scotch whisky from 150% to 75% at entry, moving to 40% after 10 years? Given that Labour’s team has succeeded in these negotiations where the previous Tory Government patently failed, does the Minister think it appropriate that the team should perhaps celebrate with a wee dram? If she needs any advice on what Scottish whiskies she could partake in, I am more than happy to provide that introduction.
Baroness Gustafsson (Lab)
That is wonderful to hear—a worthy celebration indeed. Of course, I am delighted that, as a result of this deal, Scotland will benefit from significant tariff liberalisation for a whole variety of its exports, which includes whisky, for which the current 150% tariff will reduce to 75% from day one of the deal, reaching just 40% after 10 years. The Scotch Whisky Association described the deal as
“a once in a generation deal and a landmark moment”
which is “transformational” for Scotch whisky exports.
Lord Lansley (Con)
My Lords, I know many of us who were on the International Agreements Committee at an earlier stage, when we were looking at the difficulties of negotiating a deal with India, realise that it is a significant achievement and very welcome. It is not, however, as comprehensive as we had hoped it might be. Positively, I am very glad to see the procurement opportunities that it offers. In that regard, access to procurement in India is very large scale, but we need something which is digitally available, a bit like our own Tenders Electronic Daily. Is there an expectation that small businesses will have access to those procurement opportunities through that kind of mechanism? Secondly, we had hoped, at one time, that we might—and it would be very significant—have an investor-state dispute settlement provision in the deal. I do not understand that there is such a thing, but are there any side letters about giving assurance to UK investors in India for the future? Regarding parliamentary scrutiny, the CRaG provisions will apply, but would the Minister reiterate what we call the “Grimstone rule”—that is, if our International Agreements Committee was to recommend that the deal should be debated by this House, that such a debate would take place before the Government proceeded to ratification?
Baroness Gustafsson (Lab)
On the investor treaty and how we are making sure that we get investor protections for people looking to invest across borders, the bilateral investment treaty is not included as part of this free trade agreement. That is the next stage in these agreements, and that will be followed up afterwards. It is not part of the free trade agreement, but those negotiations are still ongoing and will be part of future conversations. Forgive me: the noble Lord asked a second question; would he mind just repeating it?
Lord Lansley (Con)
The Grimstone rule is essentially that the Government commit that, if our International Agreements Committee said that the treaty should be debated by this House, that debate should take place before the Government proceed to ratification.
Baroness Hoey (Non-Afl)
My Lords, the Minister will know that not all these trade deals apply to Northern Ireland. Yesterday in the other place, the Secretary of State for Business said basically that that was because of the Belfast/Good Friday agreement and the Windsor Framework and we had to protect the Belfast/Good Friday agreement. Could the Minister give me exact detail of where it says in the Belfast/Good Friday agreement that businesses in Northern Ireland should be treated differently and that we should be left under the European Union’s court and rules? Would the Minister perhaps accept that we are getting a little bit tired of the Good Friday/Belfast agreement being used in so many different ways?
Baroness Gustafsson (Lab)
I hear the noble Baroness’s frustration. We want businesses in Northern Ireland to be able to benefit from this to the fullest extent that they can, and that is absolutely what we expect here. Businesses in Northern Ireland, exporting their goods and services will benefit from this free trade agreement, just as businesses elsewhere within the United Kingdom will. Businesses exporting from Northern Ireland will therefore benefit from the free trade agreement with India, so this should be a good news story. When we think about businesses importing into Northern Ireland from India—India-originating goods entering Northern Ireland—they will do so under the terms of this free trade agreement provided that those goods are not at risk of entering the EU. This is where the Windsor Framework kicks in, making sure that, under the usual process of the Windsor Framework, that is protected. Businesses operating within Northern Ireland will benefit from the terms of the free trade agreement.
The Lord Bishop of Manchester
My Lords, I too welcome both trade agreements in recent weeks and congratulate His Majesty’s Government on achieving them. I know that in my diocese in Manchester, the large Indian diaspora community will be working hard to help British exports where they have improved opportunities.
I am not sure that the Minister quite answered the question from the Liberal Democrat Front Bench, with references to human rights and climate change. I want to widen that slightly with regard to the upcoming trade strategy that the Statement referred to and ask whether there is any ethical component to it? Will moral considerations play any part in negotiating the trade agreements, or is trade, in effect, an ethics-free zone?
Baroness Gustafsson (Lab)
On the environmental aspect, this is India’s first ever chapter on the environment within a free trade agreement and it goes further into this area than it has ever gone before. The agreement requires India to promote high and continually improving levels of environmental protection, reaffirms our joint commitment to the Paris agreement and strengthens environmental standards through non-derogation commitments. It is a big first step, but a free trade agreement cannot fix all environmental issues. Those are most effectively tackled when we work directly and closely with our partners through this international approach. Having a deal like this solidifies our relationship and provides much broader access and opportunity to exert that influence.
Baroness Ritchie of Downpatrick (Lab)
My Lords, I thank my noble friend the Minister for the Statement. I welcome this trade deal, and I, for one, welcome the Belfast/Good Friday agreement and the Windsor framework. I believe that we should avail ourselves of every opportunity to access trade opportunities wherever they may arise, whether in India, the EU or North America, notwithstanding certain, shall we say, threats that may be made. In light of a previous question, what discussions will be held with the Northern Ireland Executive about potential opportunities for trade between Northern Ireland and India to avail of every opportunity and our ability to access the UK internal market and the EU in terms of goods?
Baroness Gustafsson (Lab)
I thank my noble friend for that question. This free trade agreement presents a selection of opportunities for trade between India and Northern Ireland, but it is not the only one. We will be working closely with the devolved Governments to think about those opportunities and build on them collaboratively. In my particular area, investment, we are working closely with those Governments to understand what those trade and investment opportunities are and how we, as that central Government, amplify some of them. When I travel the world, I talk to investors and share opportunities not just within a mile’s radius of where we stand today but across the UK, so that benefit can be felt throughout.
Captain of the King’s Bodyguard of the Yeomen of the Guard and Deputy Chief Whip (Baroness Wheeler) (Lab)
My Lords, it is the turn of the Tory Benches.
Baroness Lawlor (Con)
The Minister mentioned that Indian firms could send their employees to work here. Do the Government have any idea of the numbers involved? Will they put a cap on those numbers, bearing in mind the Prime Minister’s statement yesterday and that of the Home Secretary? What mechanisms will be in place to ensure that when the three years are over, those employees will return? The Minister mentioned that there was a worry, which she answered, that they would undercut British workers. What steps will be taken so that UK workers—local workers—can avail themselves of the opportunities of this deal by seeking employment with Indian firms?
Baroness Gustafsson (Lab)
To provide some reassurance, there is no change in the visa process. The points-based immigration system is not affected, so there is no change in the various routes for visa applications as a consequence of this deal. In those limited instances where detached workers are employed by an Indian company on a short-term contract within the UK, they will not be paying social security contributions in both situations. This will not in any way change the immigration policy around visa applications; that will be consistent with the current processes to ensure that any visas granted are applied and people are understood to be in the country legally. Where they are not, the procedures will be as normal.
Baroness Falkner of Margravine (CB)
My Lords, I declare an interest as chair of the Equality and Human Rights Commission, but I am speaking in a personal capacity today. I have not heard the Minister explain whether, in following the usual processes, the Government will publish a human rights assessment and the other impact assessments mentioned by the noble Lord, Lord Purvis of Tweed, in advance of the debate in this House. On a slightly different point, in the projections and the wonderful figures that her modelling paints for a future some decades out, have the Government taken into account the long-term impact of geostrategic instability in south Asia, which we are witnessing as we speak?
Baroness Gustafsson (Lab)
In terms of the process and the timing of the impact statement, negotiations have concluded so we are in the final stages to get the treaty signed; it will happen as quickly as possible— I hope in the coming months. There will be a process for CRaG, and it will be discussed at parliamentary level. A full impact statement will be released, as well as the full trade agreement, on signature, so that should be available shortly. The human rights aspect is subject to an ongoing conversation and will be dealt with separately.
Lord Lilley (Con)
I strongly support the free trade elements in this deal, and not just because it is a Brexit benefit, which I am sure the Minister welcomes. Given that the Indians strongly wanted to link immigration to this free trade deal, can she give us an assurance regarding the strange loophole in the intercompany transfer arrangements? Although not incentivised by the tax issues to which she referred, has there been a guarantee that it will continue? Has there been any change in the situation since the last published figures, which showed that two-thirds of all the inter- company transfers coming into the country came from the contractor route? That means that people are migrants, employed by a contractor and then supplied to British firms, and 97% of those come from India. The loophole seems to be geared to the needs of the Indian desire to export some of their people. Can the Minister confirm that no assurance has been given that this loophole will not be closed? The last available figures show 26,000 people coming from India in a single year.
Baroness Gustafsson (Lab)
I shall repeat some of the statements that I made earlier. We are not giving away more visas or creating new routes as part of the deal. Existing mobility routes have been expanded to cover additional sectors, so a broader number of sectors will now be considered for that mobility visa, but that does not necessarily change the quota. It is the same number of people accessing those facilities. The facilities have not changed; it is just that we will consider a broader range of sectors when considering those visa applications. To qualify for the routes, professionals must demonstrate that they meet strict criteria for professional experience and qualifications, consistent with the current process.
Baroness Hoey (Non-Afl)
My Lords, I know the Minister is honest and straightforward, as, of course, all noble Lords are, but would she like to state what it seems no other Government Minister wishes to state: that we would not be having this discussion or these deals if we had not left the European Union?
Baroness Gustafsson (Lab)
I try to be as honest and straightforward as I possibly can. I refer to the numbers that we talked about when we talked about modelling the numbers. There are a lot of what ifs and hows, but the reality is that we have to deal with the state of the world as it is today. That presents threats in some corners but opportunities in others. What was in front of us was the opportunity to build and expand our relationship with India in a way that supports both our nations, and that is an opportunity that we grabbed with both hands and made the most of.
Lord Lilley (Con)
I am grateful for the frank and open reply that the Minister gave to my question, which I actually found rather worrying. I had not realised that there were existing restrictions on the intracompany transfer route to particular sectors, and that that was going to be liberalised and widened to additional sectors. Could she possibly write to me, and put a copy of the letter in the Library, about what the extent was before, how wide it will be in future and some estimate of the extra migration into this country that is going to come? Was any account taken of that in the Statement on migration from the Home Secretary the other day?
Baroness Gustafsson (Lab)
I assure the noble Lord that that worry is unfounded and that the numbers will not change. I am happy to write to him to follow up on the sectors that will now be included.
Baroness Lawlor (Con)
Could the Minister write to me and let me know what numbers are involved in company transfers to this country as matters stand? Do we have any idea of the numbers that companies will want permission to send here?
Employment Rights Bill
Tuesday 13th May 2025
(1 day, 18 hours ago)
Lords ChamberEmployment Rights Bill 2024-26 View all Employment Rights Bill 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 81-III(a) Amendments for Committee (Supplementary to the Third Marshalled List) - (13 May 2025)
Lord Harlech (Con)
My Lords, I support Amendments 127, 128 and 139 in the name of my noble friend Lady Penn. In so doing, I declare my interests as an employer and as the father of a four month-old son.
The amendments in this group seek to deliver a fairer, more modern and more economically rational approach to paternity leave in this country. They are modest in scope but transformative in impact. They are not about political ideology; they are about justice, equality, family well-being and economic prudence.
The case for action is overwhelming. Today in the United Kingdom we grant mothers 52 weeks of maternity leave. Fathers receive just two weeks and are paid a mere £187.18 per week for it, which is less than half the national living wage. That is not support, it is a symbolic gesture, and one that fails our families, our economy and our vision for a truly modern and inclusive society. As we have heard, the UK has the least generous paternity leave system in Europe and we rank 40th out of 43 OECD nations. While 22 OECD countries offer six weeks or more of well-paid reserved paternity leave, the UK offers just 0.4 weeks of full-time equivalent paid leave. Is that the legacy that we wish to defend?
The amendments seek to correct that imbalance. They would do three vital things: make statutory paternity pay a day-one right, just like paternity leave will be under the Bill; increase paternity leave from two weeks to six and raise the rate of pay to 90% of the father’s salary, capped at median earnings; and require transparency from large employers by mandating the publication of their parental leave policies. Each of those proposed reforms is supported by robust evidence, each is economically justified and, perhaps most importantly, each is backed by overwhelming public support.
The Government rightly propose to make paternity leave a day-one right, yet they do not extend that logic to pay. What message does that send—that a father may take time off but must go without income to do so? Incidentally, it is worth noting that that is currently the arrangement in your Lordships’ House. Perhaps if the Government are about fairness and workers’ rights, as they purport to be, that may be something that they wish to take up with the commission.
Research shows that the biggest barrier to fathers taking paternity leave is affordability. Nearly three-quarters of those who cut their leave short did so because they could not afford to stay off work any longer. What use is leave if it is unpaid?
Why six weeks, and why 90% pay? It is because we know, from the experience of countries such as Sweden, Germany, Spain and beyond, that reserved well-paid leave for fathers leads to profound benefits for families, for women’s equality, for children and for national prosperity. OECD data shows that, in countries offering fathers six weeks or more of well-paid leave, the gender wage gap is 4% smaller and women’s labour force participation is 3.7% higher. Why? It is because shared caregiving allows mothers to return to work sooner and on fairer terms.
However, this is not just a women’s issue; it is a fairness issue for all parents, and smart economic policy. The economic argument is striking. Closing the gender pay gap could boost UK economic output by £23 billion, while increasing paternity leave to six weeks at 90% pay could generate an immediate economic benefit of £2.6 billion. That is based on sound modelling endorsed by reputable analysts, including the Joseph Rowntree Foundation.
Moreover, 90% of businesses surveyed by the CBI say that inclusive workplace practices help them to attract and retain talent. Nearly three-quarters of employers that offer enhanced paternity leave report higher productivity—we were discussing productivity rates in this country in earlier groups; this is a solution to help that—and employee engagement. So let us discard the myth that this would be a bureaucratic cost; in truth, it would be a smart investment for business.
Let us also remember the human case. Better paternity leave benefits children. As my noble friend Lord Bailey said earlier, children with engaged fathers show higher academic achievement, greater resilience and stronger social skills. It benefits mothers: when care is shared, women can more easily return to the workplace and pursue their careers. It benefits fathers: longer paternity leave leads to better mental health—something that we also heard about earlier—stronger father-child bonds and more engaged parenting throughout childhood. If we want to build a society where men are not just allowed but expected and supported to care for their children, then this is the place to start.
The public are with us on this point. Some 81% agree that more generous paternity leave is good for families and for the country. Support crosses party lines: Labour, the Conservatives, the Liberal Democrats, the SNP and Reform all back this measure. This is not a fringe issue; it a mainstream demand and a moral necessity.
We have what is perhaps a once-in-a-generation opportunity to reshape the way this country supports fathers, mothers and children in their earliest days together. The proposed amendments are reasonable, grounded in evidence and long overdue. I urge the Government to accept them.
Baroness Smith of Llanfaes (PC)
My Lords, it is a pleasure to follow the noble Lord, Lord Harlech, who made a compelling case for these amendments. I rise to speak in strong support of Amendments 139 and 76, tabled respectively by the noble Baronesses, Lady Penn and Lady Lister.
The UK’s statutory paternity leave—just two weeks, paid at £187.18 per week—is the most limited in Europe. In many OECD countries, six weeks’ leave at the equivalent of full pay is standard. By comparison, our offer is inadequate and outdated.
Eligibility for paternity leave is also restricted. It requires continuous employment with the same employer for 26 weeks before the 15th week prior to the due date. That excludes many fathers, especially those in insecure work, the self-employed, or those working in gig economy roles. Many are forced to take unpaid leave or use holiday just to be present at the start of their child’s life.
The impact is significant. The TUC reports that over half of families struggle financially when a parent takes paternity leave, and one in five do not take the leave they are entitled to, mostly for financial reasons. Research from Pregnant Then Screwed found that 70% of fathers who did not take their full leave had to cut it short due to cost.
This is not just about finances; it affects bonding with the child and support for the mother or birthing partner, and it reinforces gender inequality in unpaid care. The lack of accessible leave for fathers limits shared parenting and is a contributor to the gender pay gap and future pension pot inequality.
The Employment Rights Bill includes provisions to address some of these issues. Clauses 15 and 16 remove the qualifying periods for unpaid parental and paternity leave. Clause 17 removes the requirement to take paternity or adoption leave before parental leave, allowing paternity and adoption leave to be taken following shared parental leave. However, these clauses fail to tackle the low level of statutory paternity pay, or to extend fathers’ and second parents’ leave entitlement past two weeks.
While the Labour Party committed in its manifesto to review the parental leave system more broadly, the Employment Rights Bill provides an opportunity in the here and now to implement changes that would make a real difference to families and people considering having children. The noble Lord, Lord Bailey, mentioned the lower birth rate—an important context that we must take into account in considering in these amendments.
Amendment 139 from the noble Baroness, Lady Penn, offers a practical and immediate step forward. It would require statutory paternity pay to be a day one right, removing unnecessary barriers for thousands of working parents.
Amendment 76 from the noble Baroness, Lady Lister, backed by the noble Baroness, Lady Penn, would mandate a comprehensive review of paid parental leave within six months of the Bill becoming law. Importantly, it sets the terms of that review: to consider a statutory, non-transferable period of paid leave for second parents, to raise pay levels, and to include the self-employed.
This is not merely a social issue; it is an economic one. Many noble Lords have mentioned the modelling by the Joseph Rowntree Foundation and the Centre for Progressive Policy, which suggests that increasing paternity leave to six weeks at 90% of earnings could contribute £2.68 billion to the UK economy by supporting more mothers to return to work and encouraging shared care from the outset.
Countries with more than six weeks’ paid paternity leave have significantly smaller gender pay and participation gaps, as we heard in the international examples shared by a number of noble Lords during this debate. The benefits are clear, and the public support reform—only 18% believe the current two-week offer is sufficient.
Other amendments in this group have been powerfully spoken to, such as Amendment 80 from the noble Lord, Lord Palmer, and Amendment 127 from the noble Baroness, Lady Penn, which both propose extended leave and fairer pay.
The case for reform has been compellingly made in this group. The Employment Rights Bill offers a real opportunity to modernise paternity leave, benefiting families, the economy and gender equality at work. I urge the Minister to consider the strength of the arguments presented today and to respond with the action that it deserves.
Lord Ashcombe (Con)
My Lords, I rise to speak in support of Amendments 127, 128 and 139 in the name in my noble friend Lady Penn.
I would like to think that the birth of any child is an important day in the eyes of the father as well as the mother; yet, when it comes to the parental leave granted by companies, they are treated very differently: up to 52 weeks for the mother and two weeks for the father. On this basis, as we have heard, the United Kingdom compares very unfavourably with other European nations. In addition, 22 OECD nations offer more than six weeks, paid at the equivalent of 100% of salary.
The Government’s weekly rate of statutory pay, for the two weeks that it is paid to fathers in this country, is currently the lesser of £187.18 or 90% of average weekly earnings. This is a modest amount by any measure, given that the average full-time working man is paid just under £700 per week.
We have heard from other noble Lords of the benefits to fathers themselves, as well as mothers and children, when fathers are permitted to spend longer with the family in the early period of a child’s life.
I wish to draw on my personal experience. As I have said before, the company that I work for—Marsh, a very large insurance broker—now has a mature policy on paternity leave. Fathers are allowed to take up to 16 weeks’ leave, and the company ensures that they continue to be paid the equivalent of 100% of their salary during their time away from the workplace. Importantly, their job remains open for this period to facilitate their return. This benefit was not available to me when my sons were born in the 1990s—unlike the noble Lord, Lord Russell of Liverpool, I have not yet reached grandfatherhood.
The time allowed must be taken within 52 weeks of the birth of the child, or children in the event of a multiple birth. I am sure that our competitors offer something similar, as competition for staff is an ongoing issue, and benefits count enormously in any discussion should a member of staff wish to change employer. Such a policy helps to define the culture of a company that cares not only for itself but also for the lives of its colleagues.
I do not believe that Amendment 128, which asks for parental leave policies to be published by large companies, is making an onerous request; indeed, publishing them would enable meaningful comparisons, inform jobseekers and encourage best practice across industry. I support it.
As I mentioned in an earlier group, happy staff tend to do good work. This is certainly a stressful time in any family’s life, and the mental health of staff is important, as we have heard today from my noble friend Lord Bailey of Paddington and others. It is one thing for a large company with the ability to cover a colleague’s workload to offer such a period of paternity leave, but this is obviously more challenging for smaller companies.
I am not suggesting for one moment that all companies should offer such generous periods of paternity leave as my own, much as I would have enjoyed it in my time. The birth of any child is, I hope, an exciting experience. It is also, in my experience, a somewhat nerve-wracking one, which can be ameliorated by parents being able to spend more time together during this period.
Two weeks of paternity leave is simply not enough. I encourage the Government to extend the statutory period for paternity leave to six weeks, as suggested in Amendment 127, and to provide a more generous level of salary. I hope that this will encourage fathers to take off this period, which, as I have demonstrated, is exceeded in some workplaces.
Finally, I will look briefly at Amendment 139, again in the name of my noble friend Lady Penn, on which I have changed my opinion during this debate. I believe that companies of all sizes feel that day one paternity leave is a step too far when the new employee has not even walked through the door. However, if the Government insist on this, it seems only right that fathers should receive statutory pay as a minimum. Companies obviously still have the opportunity to decide whether to go further, as would be the case for employees who have been part of the workforce for a certain period of time.
Lord Gascoigne (Con)
My Lords, I support Amendment 127 from my noble friend Lady Penn. I declare an interest—which I am increasingly discovering to be a growing financial interest—in the form of my two daughters, who are the most precious things to me.
I confess that I am glad that it is my noble friend Lady Penn who is leading the charge on this amendment, and the noble Baroness, Lady Lister, leading the group. I rise with some trepidation. I am not alone in being conscious that, in speaking to this amendment, as a man I am putting myself slightly in the firing line by somehow implying that a man should have exactly the same as the woman who has just carried and given birth to the child. As has been said, this is not about more rights for the man. It is more than that. It is about ensuring a dad can be at home to play their part for the child and, crucially, be there for the mum.
I am lucky and immensely grateful that, on both occasions when my wife gave birth to our children, I had two supportive bosses, one of whom I am delighted to say is still my boss, in the form of the Opposition Chief Whip. When the time came, my noble friend worked to give me the support and time I wanted to be with my family. When I was in the Government Whips’ Office, I worked with colleagues—two of whom I am pleased to see here, in the form of the noble Lords, Lord Evans and Lord Harlech—to ensure that we all got the time at home that we wanted, especially me. This is not unique, but I was lucky: lucky that it was offered, lucky that it was an open dialogue, lucky that I could ask for what I would like without recourse and was completely understood, and lucky that the support extended beyond the time I was at home. I was also lucky that my child was healthy and lucky that I had my in-laws around to help out.
Like so many in the country, I wanted to be at home to help, but also to share those early moments—the precious moments in a young child’s life that were mentioned earlier. I was there to help, tidy, ferry, feed, give cover and support my wife, who was recovering after surgery. To explain my personal circumstances, both of my children’s births were not simple. The first required emergency surgery, and then a return to hospital for another stay a week after coming home. Our second child’s birth was also complicated. Despite being a planned caesarean, the surgery did not go well and it required weeks of hospital visits. There is no way at all that my wife, on her return, could have looked after a newborn child, never mind our eldest or, indeed, herself.
I say this not for sympathy, or to suggest that I am special or unique, or deserve better support than others. General statistics show that, on average, a labour can last up to 18 hours. While around 46% of women who give birth in England spend one day in postnatal care, around 40% of women spend two days or more. Caesareans have increased over the last decade, amounting to over 40% of births. It is worth reflecting that the advice on caesareans is that for weeks the mother should not lift anything heavier than her own baby.
Not everyone is able to have a wider family network to rally in support. While I was lucky that I had support at work, some are not so lucky. They do not have a choice and have to return to work sooner than they would like to, as the noble Baroness, Lady Smith, said. Indeed, I read online that one dad was back at work 24 hours after their child was born.
I am a realist and I know that money does not grow on trees, and many businesses are already providing longer and better parental leave. Some may say that they have concerns about the impact on business and the economy, and I will not comment on the Bill as a whole, but it is obviously right that each and every day we should be supporting and helping businesses to grow—they pay the taxes and employ people.
Research shows that three-quarters of employers who offer extended leave see an increase in productivity and engagement, and almost 100% of fathers said flexibility is a deal breaker when looking for employment. As my noble friend Lady Penn said earlier, extended leave is good for parents, so that they can help and support one another; it is good for the child, to ensure that support is there for them, and to build bonds as part of a new unit; and it is good for forming another special bond, the one between employer and employee. I hope that all noble Lords, especially in my own party, recognise the merits of this amendment as something that is good for both business and families.
Baroness O'Grady of Upper Holloway (Lab)
My Lords, I will speak very, very briefly. It is heartening to hear support for the amendments in this group right across the House. I will speak in particular to those from the noble Baronesses, Lady Lister and Lady Penn. I have already shared with the noble Baroness, Lady Penn, that, when I was at the TUC, I very, very vividly remember having conversations with young men who were working as riders and delivery drivers, and they really, really wanted to be good dads. They had young babies and children, and what was most important to them—and I hope others will reflect this in paying attention to how we make working families’ lives better—was predictability of shifts and guaranteed hours, so they would know how much money they could earn, but they also wanted paid paternity leave.
To keep this really, really brief, I have a couple of questions for my noble friend the Minister before she responds. First, can we accept that the starting point for a review would be to recognise that, compared with other countries, the UK is so ungenerous in its paid paternity leave? We do not need a huge review to know that; it is our starting point. If we are to move into the 21st century, we also need to recognise that new dads from all sorts of backgrounds want time to bond with their babies and be involved more equally in their care. Secondly, will this review focus specifically on paid paternity leave, working from the simple premise that, unless it is paid, there are whole swathes of new dads who simply cannot afford to take it?
I have been encouraged by the discussion around the House. I think there is a cross-party consensus that we all want to see new dads having that opportunity. We all know it will bring benefits for women—including closing the gender pay gap—and opportunities for children to have a better life, too.
Lord Sharpe of Epsom (Con)
My Lords, I thank my noble friend Lady Penn for her very thoughtful amendments in this group. I acknowledge the valuable contributions from all noble Lords, in particular the noble Baroness, Lady Lister, for introducing her amendments, and the noble Lord, Lord Palmer of Childs Hill, for introducing his amendments and, perhaps more importantly, reminding the House of the Conservative-led coalition Government’s work in this area—although I note that he did not heap praise on the then Secretary of State for Work and Pensions, my right honourable friend Iain Duncan Smith.
We fully recognise and support the intention behind these proposals, which is to strengthen support for families and in particular to enhance the role of paternity leave in allowing fathers to spend essential early time with their children. This is a laudable aim that clearly finds broad sympathy across the House.
However, while the objective is clear and commendable, we must also consider the practical implications of how such policies are implemented, particularly in relation to the impact on businesses. Many employers, large and small, continue to face significant challenges in the current economic climate, as we have discussed at length this evening. The introduction of new requirements, even when limited to large employers, must be approached with caution and care, and I acknowledge that my noble friend Lady Penn addressed many of those concerns directly in her speech.
As for the reporting obligations set out in Amendment 128, tabled by my noble friend, these would apply to businesses with 250 employees or more. While this threshold helps to focus the requirement on larger organisations, we should still be mindful of the potential administrative and financial burdens such reporting could entail. Even within that category, resources vary significantly, and not all may be equally equipped to take on new reporting functions—a point that was addressed by my noble friends Lord Bailey and Lord Ashcombe. That said, transparency and data collection can play a valuable role in shaping effective policy. If it can be clearly demonstrated that these measures would bring mutual benefits, improving employee well-being and retention, for example, without imposing disproportionate costs or complexity on employers, it is certainly something that we should be prepared to consider further.
Ultimately, we have to strike the right balance, ensuring meaningful support for families while safeguarding the viability and flexibility of the businesses that employ them. That is the lens through which we should view not just this amendment but the broader provisions of the Bill.
Lord in Waiting/Government Whip (Lord Leong) (Lab)
My Lords, this has been a wide-ranging, informative and very exciting debate. I thank all noble Lords who have contributed. I take this opportunity to congratulate the noble Lord, Lord Harlech, on his four month-old son. I begin by recognising the key role that parental leave plays in supporting families—I wish it had been available when I became a father, at a much older age, some 18 years ago. I thank the noble Lord, Lord Gascoigne, for sharing his story about the difficult time he had during the birth of his children.
This Government understand that the arrival of a child, whether through birth or adoption, is the most transformative time in a family’s life. We understand that the current parental leave system needs changing so that it better supports working families. We have committed to do this and we are taking action in a number of different ways. Through this Bill, the Government are making paternity leave and parental leave day-one rights, meaning that employees will be eligible to give notice of the intent to take leave from the first day of employment. I hope that many noble Lords will welcome this position. This brings such leave in line with maternity and adoption leave, so simplifying the system.
Baroness Penn (Con)
The Minister said that this brings paternity leave in line with maternity leave, but for maternity leave, the right to pay is also a day-one right. Does he acknowledge that the Bill does not create alignment between maternity and paternity?
Lord Leong (Lab)
The noble Baroness is absolutely right. I just said that the leave is the same as maternity leave, not the pay. This brings paternity leave in line with maternity leave and adoption leave, thereby simplifying the system. We are removing the restriction preventing paternity leave and pay being taken after shared parental leave and pay, to further support working parents in assessing the entitlements available to them. Separate from the Bill, planning work is under way for the parental leave review, which will explore how well the current system supports working families and what improvements could be made.
Amendments 127, 80, 138 and 139 seek to make changes to paternity leave and pay. Amendments 127 and 139 are in the name of the noble Baroness, Lady Penn. Amendment 127 seeks to extend statutory paternity leave and pay from two weeks to six weeks and to increase the rate of pay to the lower of 90% or national median pay—although the drafting relates specifically to pay. Amendment 139 seeks to make statutory paternity pay a day-one right for all employees by removing the current continuity of working requirements. The noble Lord, Lord Palmer, has laid two similar amendments, Amendments 80 and 138. Amendment 80 would increase the minimum length of paternity leave from two to six weeks and require regulations to introduce the ability to take paternity leave at any time in at least the first year following birth or adoption. Amendment 138 calls for the existing flat rate of statutory parental payments to be increased, by doubling the rate from £184.03 to £368.06.
I hope to reassure the noble Baroness and the noble Lord, in part by highlighting several reforms to paternity leave and pay which took effect in April last year. These changes now allow eligible parents to take their leave and pay in two non-consecutive weeks; to take their leave and pay at any point in the first year after the birth or adoption of their child, rather than only within the first eight weeks, as was previously the case; and to give shorter notice for each period of leave. I hope that the noble Lord, Lord Palmer, will therefore agree that, while well-intentioned, Amendment 80 is not necessary in relation to when paternity leave is taken, for the reasons I have just explained.
Baroness Penn (Con)
Will the noble Lord clarify whether he just said that there are no day-one rights to parental pay, including for maternity?
Lord Leong (Lab)
I will read it again. Amendment 139 would make statutory paternity pay a day-one right. Currently, no parental pay entitlements are available from day one, including maternity pay.
Baroness Penn (Con)
Does the noble Lord acknowledge that maternity allowance is available from day one, at the same rate of pay as statutory paternity pay?
Lord Leong (Lab)
The noble Baroness is absolutely right: maternity allowances are available from day one.
Parental pay entitlements require employees to meet an average earnings test. Calculating whether newly employed parents have met this threshold would present a significant challenge to their new employers who administer parental payments.
Amendments 127, 138 and 139 would introduce a cost burden to the Exchequer at a time when public finances are under pressure. When considering calls to increase the level of parental pay generally, any changes will need to take account of the economic situation, the financial impact on employers and the needs of parents, and be made in consultation with businesses and stakeholders. The Secretary of State for Work and Pensions is required by law to undertake an annual review of benefits and state pensions, including statutory payments. This is based on a review of trends in prices and earnings growth in the preceding year. Generally, as with other benefits, parental payments are increased in line with CPI. For example, statutory maternity pay, statutory paternity pay and statutory adoption pay will all increase by 1.7% in April 2025, in line with the September 2024 CPI figure.
Baroness Penn (Con)
Does the noble Lord acknowledge that, in linking the payments to CPI, what is actually happening is that we are seeing a bigger gap between statutory payments and people’s salaries, as the national minimum wage is increasing by a greater degree? The process that the noble Lord has laid out is increasing the problem that we have of payments not coming anywhere close to replacing wages.
Lord Leong (Lab)
I thank the noble Baroness for that. That is the situation as it is now. Until and unless things change, that is what is happening.
Depending on individual circumstances, additional financial support will be available to parents. For example, universal credit, child benefit and the Sure Start maternity grant may be available alongside statutory parental pay.
I turn to the issue of shared parental leave. Where fathers and partners want a longer period of leave and pay, shared parental leave and pay is already available. Shared parental leave and pay offers up to 50 weeks of leave and up to 37 weeks of pay, which can be created for parents to share from maternity entitlements that the mother does not intend to use. Parents can use the scheme to take leave together for nearly six months, or intersperse periods of leave with periods of work.
I turn to Amendment 136, again laid by the noble Lord, Lord Palmer, and supported by the noble Baroness, Lady Whitaker, which calls for individuals who are self-employed or contractors to have access to statutory adoption pay within six months of the passage of the Bill. It would also require the terms “self-employed” and “contractors” to be defined in regulations, to set out a clear description of who would qualify for statutory adoption pay under this extended eligibility.
I want to reiterate my appreciation and gratitude towards all adoptive parents, who provide loving and stable homes to children who are unable to live with their birth parents. Currently, parental leave and pay entitlements are generally not available to the self-employed. This focus on providing parental leave and pay to employees is rooted in the understanding that employees often have less flexibility and control over their working conditions than those who are self-employed. There is of course the exception of maternity allowance, which is available to self-employed mothers as an important health and safety provision. It makes sure that mothers can take time away from having to work to recover from childbirth, bond with the child and establish breastfeeding if they wish to do so. For parents who do not qualify for adoption pay—for example, those who are self-employed or contractors—statutory adoption guidance advises local authorities to consider making a payment similar to maternity allowance.
In November 2024, the Government published Keeping Children Safe, Helping Families Thrive, in which we allocated £49 million to the adoption and special guardianship support fund for this financial year. This will enable local authorities and regional adoption agencies to offer a wide range of tailored support, including psychotherapy, family therapy and creative therapies, to adoptive families. These services are available following a locally conducted assessment of the adoptive family’s needs.
Amendment 128, tabled by the noble Baroness, Lady Penn, would commit the Government to introducing regulations requiring organisations which employ more than 250 people to publish information about their parental leave and pay policies. It is true that parental leave and pay policies are not extras. They are essential policies that allow people to manage their professional and personal responsibilities and play a huge role in addressing wider social and economic issues.
The Bill contains a number of measures which will improve the support working families receive, most notably by: putting in place legislation that makes it unlawful to dismiss pregnant women, mothers on maternity leave and mothers who come back to work for a six-month period after they return—except in specific circumstances; making flexible working the default, except where not reasonably feasible; and the requirement that large employers produce equality action plans. We feel that we are already striking the right balance between doing more to help working families and ensuring that these changes are manageable for employers to respond and adapt to. Therefore, we do not believe this is the right time to legislate to require publication of parental policies.
Amendment 76, tabled by my noble friend Lady Lister, would make it a legal requirement for the Secretary of State to begin a review of paid parental leave within six months of Royal Assent and to lay the review before Parliament within 18 months. I share the desire of all the noble Lords and Baronesses who have tabled these amendments today: I too want to see change made to the parental leave system to better support families, and I thank them for their clear dedication to improving the lives of parents and children. I recognise their concerns that the current system reinforces outdated gender roles. The responsibility for childcare remains, for many families, with the mother. For many, this will be through choice, but it is also reflective of a system that grants fathers and partners a short period of time off to be with their partner and child during this first year of life. Shared parental leave is available to qualifying fathers and partners who wish to take a longer period, but take-up remains low.
Family life has changed radically since the 1970s, when the then Labour Government passed the Employment Protection Act, which established the right to maternity leave for working mothers. We all agree that improvement needs to be made, and this Government have already begun that work by making paternity leave and parental leave day-one rights through this Bill. This removes a layer of complexity and makes the system more accessible. More needs to be done, and I recognise the fair point raised by my noble friend Lady Lister in Amendment 76 that a review needs to address the disparities in the current system.
The plan to make work pay—a manifesto commitment —committed to a review of the parental leave system within the first year of a Labour Government to ensure that it best supports working families. Planning is under way, and we hope to provide further detail soon.
Baroness Penn (Con)
Can the Minister confirm that the Government will meet that manifesto commitment to start the review within the first year, and can he give a timescale not just for when the review will start but for when it will be completed?
Lord Leong (Lab)
I can give the commitment that we will do this within the first year of the Labour Government.
Lord Leong (Lab)
We are planning and conducting the review within the first year of the Labour Government.
It would be premature to make further legislation in this space before the parental leave review has taken place. We will, however, take my noble friend’s ideas and concerns into consideration, and I look forward to updating your Lordships’ House on the review.
Before I conclude, we understand the concerns raised by—
Lord Fox (LD)
Before the Minister exits the review, it clearly reflects on a number of the issues in the Bill. It would make an awful lot of sense, if the Government are going to do this within the first year—which, by the way, is not very much longer—to be able to present us with the findings of that review so that we can reflect them in what we bring back on Report.
Lord Leong (Lab)
I thank the noble Lord for that intervention, and I will speak to my officials and write to all noble Lords accordingly regarding the review.
We understand the concerns raised by micro and small businesses around proposed day-one rights to paternity leave. Those employers often work with very lean teams and tight margins, so any perceived increase in entitlement can raise questions about costs and continuity. Introducing day-one rights is about fairness and consistency. It ensures that all fathers, regardless of tenure, have the opportunity to support their families at a critical time.
Baroness Penn (Con)
I am sorry to interrupt the noble Lord again. He has just talked about the importance of a day-one right to paternity leave, giving fathers the ability to take that leave, but, as the noble Baroness, Lady O’Grady, said, unless it is paid, swathes of dads will not be able to afford to take it. If the Government recognise the importance of this, why will they not make it paid?
Lord Leong (Lab)
I thank the noble Baroness for that. As I said in my previous paragraph, we are making day-one rights such as this and consulting, and the review will look at all the issues that the noble Baroness has brought forward. Until we get the review done, I really cannot commit to anything at this stage.
For businesses, this kind of support fosters loyalty and improved retention in a competitive hiring environment. Demonstrating a commitment to family-friendly practices helps attract and keep skilled employees. We also encourage proactive workforce planning. Cross-training and flexible staffing arrangements can mitigate disruption during short absences. Many small employers already manage similar situations around holiday leave or illness, so this policy is not about adding burden but about building a workplace culture where staff feel valued from the very start. We are committed to working with small businesses to ensure that the transition is smooth, supported and sustainable.
I hope I have reassured all noble Lords of the Government’s commitment to parental leave and respectfully ask that the amendment be withdrawn.
Lord Russell of Liverpool (CB)
My Lords, before the Minister sits down, can I, first, just make an observation? Having listened to him reading from his brief, I wondered how many members of the team who prepared the brief have themselves ever been able to take paternity leave, because it certainly did not sound like they had. Secondly, as the noble Baroness, Lady O’Grady, said in her intervention, she was very happy with the support from across the House for paternity leave being changed, and quickly. Those of us in the House who are in front of and to the side of the Minister were able to witness the body language of his Back-Benchers. Having seen that, I will say only that I suggest that going and sitting down with them as a group between now and Report might be helpful.
Lord Leong (Lab)
I thank the noble Lord for that, and I will probably take up his idea.
Baroness Lister of Burtersett (Lab)
My Lords, I thank everybody who contributed to this debate. I particularly thank all the fathers who contributed; they made it very much an issue for fathers and brought their personal experience to it. That was very important, and I value it.
The noble Baroness, Lady Penn, pushed and pushed on the question of the timeline. As far as I understand it, it is starting to happen and will start within the first year of a Labour Government, but there remains a question about when it will finish. Perhaps the Minister can take away that question and see whether he could bring back in a letter before Report a clearer idea of what the timeline will be and exactly what it will look like. I must say that, if the scenario that the noble Baroness, Lady Penn, laid out is how it is going to be, I would find that disappointing. It would be very disappointing for many people in this Committee who have supported the raft of amendments so powerfully.
I ask that a copy of this debate is given to the Minister responsible for this review. I think it would help that Minister, whoever it is, to see just how strong the feeling is, across this Committee, that this needs looked at—in particular, from the perspective of fathers and the raw deal that they get.
As the noble Baroness, Lady Jones, pointed out, this is a human rights issue. I am more used to talking about women’s rights than men’s rights, but I hear that this is one of those issues where the two come together and the one supports the other. It is so good to see this acknowledged across the Committee in that way.
My noble friend the Minister said he hoped that we had been reassured, but I have to admit that I was not—I am sorry. There was a lot of talk about better support for working families. What I did not hear—I will read Hansard—is a clear acknowledgement that this is about a better deal for fathers, and that from that then flows a better deal for mothers, children, families and the economy. The noble Lord, Lord Sharpe, talked a bit about the costs, but this could be good for the economy and for business, and I think that perhaps that needs to be recognised more.
I will not say any more now. I ask that my suggestion that this debate be brought to the attention of the Minister responsible for the review is taken seriously—there is nodding from the Front Bench in front of me.
I cannot speak for the body language of all my colleagues here on the Back Benches, but I think it has been a very good debate and worth having. We need to think about what we want to do on Report, and I am sure this will come back in some form then. I ask that officials give more thought to what was really motivating this debate in what is presented back to us on Report, because I am not sure that they really got it—and this is too important for it not to be got. I will leave it at that. I beg leave to withdraw the amendment, but I look forward to continuing the conversation across the House.
“Foster carer’s leave(1) The Employment Rights Act 1996 is amended as follows.(2) In the title of Part 8B, for “CARER’S LEAVE” substitute “CARER’S LEAVE AND FOSTER CARER’S LEAVE”. (3) After section 80J (Carer’s leave) insert—“80JA Foster carer’s leave(1) The Secretary of State must make regulations entitling an employee to be absent from work on leave under this section in order to undertake activities as a result of being a local authority foster parent.(2) For the purposes of subsection (1), “local authority foster parent” is defined in accordance with section 105 of The Children’s Act 1989.(3) The regulations must include provision for determining—(a) the extent of an employee’s entitlement to leave under this section;(b) when leave under this section may be taken.(4) Provision under subsection (3)(a) must secure that where an employee is entitled to leave under this section the employee is entitled to at least a week’s leave during any period of 12 months.(5) The regulations may make provision about how leave under this section is to be taken (including by providing for it to be taken non-continuously).(6) The regulations may provide that particular activities are, or are not, to be treated as providing or arranging care for the purposes of this Part.”(4) In section 80K—(a) in subsection (1), after “80J” insert “and 80JA”,(b) in subsection (2), after “80J” in both places it occurs insert “and 80JA”,(c) in subsection (4), after “80J” insert “and 80JA”, and(d) in subsection (5), after “80J” insert “and 80JA”.(5) In subsection (1) of section 80L, after “80J” insert “and 80JA”.(6) In section 80M—(a) In subsection (1)—(i) in the opening words, after “80J” insert “80JA”,(ii) in paragraph (e), after “80J” insert “and 80JA”,(iii) in paragraph (f), after “80J” insert “and 80JA”,(iv) in paragraph (g), after “80J” insert “and 80JA”,(v) in paragraph (h), after “80J” insert “and 80JA,(b) In subsection (2), after “80J” insert “and 80JA”, and(c) In subsection (3), after “80J(4)” insert “and 80JA(4)”.”Member’s explanatory statement
This new clause ensures local authority foster parents are entitled to at least one extra week’s leave every 12 months.
Lord Palmer of Childs Hill (LD)
In moving my Amendment 77, I shall speak to Amendments 78, 79, 135 and 144 in my name. Amendment 77 seeks to extend to foster carers the leave given to carers, and I hope that noble Lords will see this as a necessary clarification, which is all that it is. Amendments 78 and 79 focus specifically on kinship carers and would require larger employers—those with over 250 staff—to review the support they offer to unpaid carers. Amendments 78 and 79 seek to address a significant gap in employment rights for kinship carers by introducing a new entitlement to kinship care leave. Amendment 78 proposes a provision to establish this right, while Amendment 79 links the proposed entitlement to the broader provisions of the Bill.
These amendments respond to a pressing social need. Over 130,000 children across the UK are currently being raised in kinship care arrangements—more than three times the number in foster care. Despite the critical role that kinship carers play, often stepping in during times of crisis to prevent children entering the care system, they receive far less support, including in the workplace. Introducing a specific entitlement to kinship care leave would provide families with much-needed time and space to adjust, to make the necessary arrangements and to ensure the child’s well-being during what is often a traumatic transition. Not only would this improve outcomes for children and families but it would help relieve pressure on the formal care system, where costs are often excessive and the emotional toll on children is, I am sure, significant. In enabling kinship carers to remain in employment while fulfilling their caregiving responsibilities, these amendments recognise the long-term social value of keeping children within loving, familiar, family environments.
Amendments 78 and 79 would introduce a right to kinship care leave and link it to broader employment provisions. As I say, 130,000 children in the UK are in kinship care, which is more than three times the number in foster care. Kinship carers often step in during family crises, preventing children entering state care, yet they lack formal workplace protections. These amendments would provide time for families to adjust and to support a child’s transition—especially vital in sudden or emergency situations. I maintain that supporting kinship care is cost-effective and reduces reliance on costly private care providers that profit from family meltdown. This is about reshaping workplace culture to reflect the reality of modern families and ensure that children can remain in loving, stable homes. These proposals align with broader efforts to reform the care system and should be viewed as part of a compassionate, pragmatic approach to child welfare.
Amendment 135 would make carer’s leave a paid entitlement. I do not really need to add more than that.
Amendment 144 would require employers with more than 250 employees to consider what support they offer to unpaid carers within their workforce when publishing their gender equality action plans. This is a modest but important step towards recognising the hidden pressures faced by most employees, most often women, who juggle paid work with unpaid caring responsibilities.
Unpaid carers are the backbone of our social care system—where would we be without them? Yet their contribution is routinely overlooked in workplace policies and gender pay gap reporting. By including consideration of unpaid carers in gender equality action plans, we would acknowledge the real-life factors that contribute to disparities in career progression, earnings and job security. Employers cannot meaningfully address gender equality without recognising the care burden that disproportionately falls on women. This amendment is a practical and proportionate way in which to ensure that unpaid carers are no longer invisible in workplace policies.
When drafting my words for today, I did not realise how important kinship care was. One talks about the mothers and fathers, but very often it is the aunts, uncles, grandmothers and grandpas—other people who are kin to the child—who are not recognised in our system as producing the support that our system requires. I hope that noble Lords will support the amendment in my name, which I beg to move.
Lord Brennan of Canton (Lab)
My Lords, I shall speak to Amendment 81, standing in my name in this group, if that is in order at this stage. It is a privilege to speak to this amendment. Although it stands in my name, I am just a vessel in this case; the credit for getting the amendment to this stage and in this shape should go to the members of the House of Commons Women and Equalities Committee, but particularly to the wonderful chair of that committee, my good friend Sarah Owen MP. Her tireless and passionate advocacy in raising the issue of the need for bereavement leave following pregnancy loss has successfully persuaded the Government that action is necessary on this particular matter. Therefore, I hope that, when my noble friend the Minister replies at the end of the debate on this group of amendments, he will be able to indicate support for Amendment 81 or at the very least confirm that the Government will bring forward an equivalent amendment on Report.
Listening to and reading the stories of women and their partners affected by pregnancy loss is a very moving and powerful experience. However, unlike other parts of the pregnancy journey, such as IVF, there is often a cloud of secrecy around miscarriage, leading sometimes to a feeling that many women have that it is somehow their fault when pregnancy loss occurs. Sarah herself has spoken publicly with great courage, emotion and eloquence about her own experiences of pregnancy loss, and she has referred to that feeling, which is compounded by the fact that, having miscarried and experienced the related physical and emotional trauma, a woman is expected to apply for sick leave to deal with the bereavement of pregnancy loss.
Miscarriage is not a sickness; it is not a disease, and it is not the equivalent of having a heavy cold or any other infectious condition. Having to take sick leave to deal with the heartbreak of miscarriage trauma reinforces the idea that there is something wrong with the woman. That is the evidence that Sarah Owen’s committee received when it undertook its inquiry into this matter. It is also the case that taking sick leave will often trigger an HR process from an employer, which can enhance a feeling of insecurity of employment at a time of great vulnerability for the woman concerned.
Pregnancy loss bereavement should be treated in the same way as any other kind of bereavement suffered by workers, and it should therefore be a right in law, enacted through this Bill. In addition, this measure would help to lift that veil of secrecy and guilt around miscarriage and build more compassionate and human workplace environments. Sarah Owen herself has spoken movingly about this when describing and discussing her own experience of miscarriage. She said in the Commons:
“I experienced pregnancy loss while I was an MP, and the kindness of colleagues in this place got me though, but at no point did any of them wrap their arms around me and say, ‘Get well soon’; they all said, ‘I’m sorry for your loss.’”.—[Official Report, Commons, 11/3/25; col. 927.]
I believe that this amendment can help to drain that well of loneliness that can be felt when pregnancy loss is left unacknowledged in employment law and in the workplace, particularly as it is such a common occurrence.
Of course, partners need to be involved too. The committee heard compelling testimony from women who had experienced miscarriage that partners needed time to grieve their loss, as well as to accompany their partners to doctors’ appointments and so on. They heard from a witness who nearly bled to death on the way to hospital because her husband was not given time off work.
Baroness Grey-Thompson (CB)
My Lords, I rise to speak to Amendment 134, which is in my name and that of my noble friend Lady Finlay of Llandaff.
The aim of this amendment is simple but vital. It seeks to provide day one financial support for parents of children diagnosed with a serious or life-limiting illness. It would create a new statutory right for parents to take a period of paid leave from employment to care for their seriously ill child. This right would apply to parents of children aged between 29 days and 16 years old who are receiving or have received specified types of medical or palliative care. The duration of this leave, including rate of pay, would need to be set out in regulation.
This amendment is tabled in honour of a young boy named Hugh, who sadly lost his battle to rhabdomyosarcoma, a rare form of cancer, at just six years old. His parents, Ceri and Frances Menai-Davis founded the charity It’s Never You to help support the parents of children who have been diagnosed with serious illnesses. They have been campaigning for three years to change the law and are here in the Gallery tonight to listen to this debate.
Throughout Hugh’s treatment, Ceri and Frances saw first hand the immense challenges faced by parents—not just the emotional and physical strain of caring for a seriously ill child but the severe financial pressures that come with it. Each year, around 4,000 families in the UK spend two months or more in hospital with their child, who is undergoing treatment for a life-threatening illness. These parents are being forced to make the impossible choice of earning a living or being by their child’s bedside. The current system is leaving these families unsupported at the most vulnerable moment in their lives. Many are selling their homes, their clothes and turning to crowdfunding sites like GoFundMe just to cover basic living costs, which can go against them in any application for universal credit.
At present, no parent is entitled to any financial support in the first 90 days of their child’s illness. After 90 days, they can apply for disability living allowance, which would help with the costs of caring for their sick child. But even then, successful DLA applications can take up to 20 weeks to be approved.
Of the families surveyed by It’s Never You, 90% believed that immediate financial support would have made a critical difference to the hardships they faced following their child’s diagnosis and treatment. This amendment seeks to build on important progress made through the 2023 Neonatal Care (Leave and Pay) Act. Under this Act, parents of babies admitted to neonatal care within the first 28 days of life and who require a hospital stay of seven continuous days or more, are now entitled to up to 12 weeks of statutory leave with pay for those eligible. This leave is also in addition to existing maternity or paternity entitlements.
Regarding these recent legislative changes, the Minister, the noble Baroness, Lady Merron, remarked:
“No parent should have to choose between being with their vulnerable newborn or returning to work … We are giving parents peace of mind so they can focus on their family.”
Considering this statement, I would like to ask the Minister just one question. The Government clearly recognise that no parent should be forced to have to make such choices between their child’s health and employment. So why are they so reluctant to provide essential financial support to those vulnerable parents who are in equally devastating situations?
Lord Watson of Invergowrie (Lab)
My Lords, I wish to speak to Amendment 77 on foster carers’ leave, and Amendments 78 and 79 on kinship carers’ leave. I congratulate the noble Lord, Lord Palmer, on bringing them forward.
Both types of carers, as the noble Lord said in tabling his amendments, provide a huge service by allowing children to remain in loving family settings, and both types will be the subject of wider consideration in the Children’s Wellbeing and Schools Bill. But today there is a need to ensure that the essential caring role they provide is acknowledged by making provision for them to have a right to leave, as do employees.
Foster carers at least receive fees and allowances, although a survey by The Fostering Network last year found that 32% of local authorities pay less than the national minimum allowance to their foster carers, and even those rates are out of date and fail to meet the costs of caring for a child. It is also essential that recognition be given to foster carers’ right to leave from work to enable them to respond to situations in the same way as birth parents are able to do.
There are over 150,000 children in kinship care in England, and yet there is a lack of understanding among the general public as to just what kinship care is and what it involves. It is any situation in which a child has been raised in the care of a friend or family member who is not their parent. The arrangement may be temporary, or it may be long term. Kinship carers need employment leave because they step up in times of crisis to provide love and care to children who may otherwise be sent to the care system—a situation that has often come about because of tragedy and/or trauma.
The period when the child moves in with a family can be difficult. They are likely to need a lot of support. Often, the carer has not planned to take on parenting responsibilities for one or more children, so they may have to spend time attending meetings with children’s services, being involved in court proceedings, finding a nursery or making arrangements with the child’s school and GP. Sometimes, children’s services place an expectation on kinship carers that they at least temporarily stop working, if they think it necessary to meet the needs of the child.
Whether the carer receives any local authority support, in a financial sense, in this situation is dependent on where the carer lives, the type of arrangement and whether the child is or was previously in the care system. More often than not, kinship carers become dependent on social security, which is simply not right or fair. Surveys by Family Rights Group have found that a third of working-age kinship carers are not in paid employment due to their caring responsibilities, and six in 10 kinship carers have to give up work or reduce their hours when the child comes to live with them.
The contrast between adoptive parents and foster carers is stark. Adopters are entitled to 52 weeks of leave and 39 weeks of pay to enable them to settle a child into their home. This is paid at 90% of average weekly earnings for the first six weeks, followed by a payment which currently stands at £184 a week for the next 33 weeks, and employers can usually reclaim almost all those costs. There is no equivalent employment leave entitlement or payment for kinship carers, but there should be. Amendment 78 would introduce significant steps towards that, because providing kinship carers with paid leave would provide families with financial security and lead to direct savings for the Treasury from kinship carers remaining in employment, reduced universal credit claims and greater tax revenues, not to mention wider social benefits from gains in children’s well-being and in GDP.
Foster carers and kinship carers do not simply provide a service to the children they look after: they provide a service to the Government by lessening the demands on children’s services and saving public expenditure. I very much hope that my noble friend will recognise this and give an assurance that she will bring forward a government amendment to right these very obvious wrongs around leave for foster carers and kinship carers, and recognise the vital service that they provide.
The Lord Bishop of Newcastle
My Lords, I thank the noble Lord, Lord Palmer of Childs Hill, for tabling Amendments 78 and 79, to which I have added my name in support. My comments will be brief. I add my voice to those of other noble Lords in the Chamber in appreciation of the debates that we have heard today on the detail of the Bill, which in many ways indicate the interrelatedness of the issues before us, and about what it is to live well together to enable the flourishing of every person throughout their whole lives.
I am very grateful to the Minister for her engagement with me over several months on the matter of kinship care, and I acknowledge the Government’s evolving view on how best to ensure consistent and sustainable support for kinship carers. I appreciate that the Minister is open to further conversations, and I look forward to them.
Part of the challenge is providing a clear, agreed and workable definition of kinship care, and there is more work to be done on this, recognising that Amendment 79 sets out in some way to go about this task. It is about finding the right balance to achieve what is needed in supporting kinship carers and is not so open as to be unworkable in law and unrealistic in affordability. That, to me, is a challenge—it is around the parameters of what kinship care is—but I do not think that it is unresolvable.
However, the longer we take to get to this point, the more lives are being impacted. Kinship carers are overrepresented in the health, education and social care sectors, so the withdrawal from this labour market has an obvious impact on wider society. The north-east region, which I serve, has the highest rates of children in kinship care. The impact of this in real terms, given multiple and systemic factors of inequality, is immense.
Amendment 78 would grant kinship carers the right to take statutory paid leave, as the noble Lord, Lord Palmer, said, akin to the entitlements of adoptive parents. It would allow them to spend a period of protected time with the children entering their care as they settle into their new arrangements. Further, it would enable caregivers to remain in employment while they adjust to their new responsibilities and continue contributing to the economic growth that this Government strive for.
I again thank the Minister for her willingness to meet me and engage with these amendments. I urge her to carefully consider the difference these amendments would make to the lives of kinship carers, to those growing up in their loving care and to wider society.
Lord Young of Cookham (Con)
My Lords, it is a pleasure to follow the right reverend Prelate, who makes a strong case for more support for kinship carers. I added my name to Amendments 135 and 144 to demonstrate cross-party support for a squarer deal for carers.
Before I add a brief word to what has already been said about carers, I add a quick word about Amendment 77, on foster care. A long time ago, my wife and I were registered foster parents in the London Borough of Lambeth. We did short-term fostering, typically when a mother went into hospital to have a child and somebody needed to look after her existing child or children. It is not quite clear from the wording of Amendment 77 how short-term foster parents might qualify if the amendment became law.
If the definition in Amendment 78 was used—namely, that the fostering of a child had to last a year—then short-term foster parents would not qualify, even though they might have been providing short-term fostering for up to a year with a series of different children. Short-term fostering can last from two days to two years. On the other hand, should a two-day short-term fostering spell qualify for leave on its own? Probably not—so, we need a bit of clarity on entitlement if this is to go further.
Baroness Pitkeathley (Lab)
My Lords, I support Amendments 135 and 144, which relate to unpaid carers. It is always a pleasure to follow the noble Lord, Lord Young of Cookham, who is always so sound on carers’ issues. I declare an interest as vice-president of Carers UK.
Amendments 135 and 144 would provide employees with a statutory right to paid carer’s leave and require employers with over 250 employees to consider what support unpaid carers are given within their workforce when publishing action plans on gender equality. Both seem to be entirely sensible, and I am pleased they have received cross-party support. As noble Lords will know, I have long campaigned for greater employment rights for those juggling paid work with their unpaid caring responsibilities. This Bill is very welcome and includes many provisions which have a positive impact on working carers.
Millions of people are now doing this juggling act of paid work with their unpaid caring responsibilities, but this juggling act is very difficult to maintain. Despite pockets of good practice, a lack of support and understanding from many employers—and too few rights in the workplace—too often leaves carers with no choice but to give up work or turn to part time or insecure work. It is estimated that 600 people per day quit work to provide unpaid care, with real and lasting consequences for them and their families. That is not only bad for them but bad for their employers and the economy. As recently as March, the Government provided a new estimate of the cost to the economy of carers being unable to work, which the noble Lord, Lord Young, quoted. It was a staggering £37 billion a year—a huge figure.
We have made good progress in recent years. Indeed, the entitlement to a week of unpaid carer’s leave was secured, as we have heard, through the Carer’s Leave Act 2023, and it was a positive step in the right direction. However, it was always intended to be just that—we said this endlessly during the passage of that Act, as some noble Lords will remember—as it was a first step to be built on. I welcome that the Government have committed to review the implementation of the current right to unpaid carer’s leave under the Carer’s Leave Act 2023 and to consider whether there is a need for paid carer’s leave. However, I urge the Government to go further and faster to seize the opportunity in front of them. It is clear to me that we should be doing everything we can to ensure that all carers who are able and wish to work are able to do so. Surely this is part of what the Government are trying to do in other areas—encourage people back into the workforce.
Carers UK’s evidence shows that 80% of carers say that additional paid carer’s leave of between five and 10 days would better help them to juggle work and unpaid care, and 50% of carers would find it easier to return to work after a period of absence if they had access to paid carer’s leave. Almost half of those who have given up work or retired early—many people take early retirement specifically to take up caring responsibilities—said that paid carer’s leave would have helped them to stay in employment for longer had it been available at the time.
The modelling that Carers UK has undertaken based on existing employer practice estimates it would cost the Government between £5.5 million and £32 million annually to introduce paid carer’s leave, depending on the rate of compensation employees receive. I know that is a large figure, but it is in fact a small price to pay compared with the huge contribution made to our economy by carers.
Amendment 144, relating to equality action plans, is necessary due to the gendered nature of caring. At the heavy end of caring, women are still much more involved than men, and this impacts specifically on women’s employment. I understand and welcome that Ministers have been engaging with organisations such as Carers UK, as well as carer-friendly employers, over the last year. I am sure they will have heard much about the positive impacts that organisations such as TSB, Centrica and Phoenix Group can have on their employees by promoting best practice. However, that support should not be the preserve of employees who just happen to work for enlightened employers.
I agree with the Government that this Bill is pro-business and pro-worker. These amendments are too, and that is why I hope they will be supported by the Government.
Lord Hogan-Howe (CB)
My Lords, I support Amendment 134 from the noble Baroness, Lady Grey-Thompson. She has highlighted that there is a glaring gap in our welfare system. It fails to provide adequate, immediate support for parents whose children fall seriously ill. Although the Neonatal Care (Leave and Pay) Act rightly recognised the need for non-means tested leave and pay when a child is critically ill at or shortly after birth, that protection vanishes as the child grows older. Parents whose children fall seriously ill beyond the neonatal period are left navigating benefits that are not suited to the immediate support they require.
Currently, there are only three options available for parents seeking that financial support. The first is universal credit, which is means tested and not easily accessible. The second, disability living allowance, was mentioned by the noble Baroness, Lady Grey-Thompson. It can only be applied for three months after a diagnosis and then takes an additional 20 weeks—approaching half a year altogether—to process. DLA is also a requirement for claiming a blue badge—just to give an example of how long this process takes. The third option is 18 weeks of unpaid parental leave taken in four-week blocks within a calendar year.
So, there is a gap from day one to day 90 before a parent can apply for financial help. In these cases, it appears families face an impossible choice—financial insecurity or being at their child’s side during the most traumatic moment of their young lives. This amendment addresses that gap, providing a grant to the parents of a chronically sick child from day one. The grant will be limited to the first one to three months, and approved quickly by the consultant, with a renewal every month.
According to data from the Treasury, there are approximately 4,000 children each year who could be expected to have a hospital stay of two months or more. The cost of caring for a chronically ill child is estimated to be around £750 per month. According to estimates by the charity It’s Never You, if the Government were to provide two months of support during this gap period, it would cost around £6 million—a significant amount, but at the lower end of national spending in revenue terms compared with many of the options talked about today.
This amendment seeks to extend the principles of the Neonatal Care (Leave and Pay) Act to children up to the age of 16 in cases of serious illness. It builds on a clear precedent and introduces a compassionate, practical solution—non-means tested support—at that moment of crisis.
The impact on employers will be minimal, affecting, as I have stated, only a few thousand families a year. But the benefit to those families would be profound. This is precisely the kind of change where legislation can make a life-changing difference at very little cost. I urge the Government to consider this amendment, which is in keeping with the spirit of this legislation.
Baroness Smith of Llanfaes (PC)
My Lords, before I deliver my remarks in relation to the amendments that I have signed, I will add my support to the amendment on miscarriage leave from the noble Lord, Lord Brennan of Canton. My Plaid Cymru colleagues in the other place also supported that amendment, so I am glad to see that it has made its way to this House, too.
Amendment 135, tabled by the noble Lord, Lord Palmer, would establish carer’s leave as a paid entitlement. I will keep my remarks brief, but I speak from lived experience. I became an unpaid carer at the age of 12. I know what it means to juggle education, work and caring responsibilities while having to repeat my story to NHS staff, college tutors, employers and the DWP. The obstacles I faced are not unique. I know that a number of carers who I spoke to in the past, and continue to do so, continue to face these obstacles. Those experiences led me to campaign on those issues, and I am proud to have influenced positive policy changes in Wales that make life a little easier for young carers trying to stay in education.
Amendment 135 would help build a safety net for the millions of people with unpaid caring responsibilities —people like I once was. The Government have made it clear that getting people back into work is a priority, and they also recognise that unpaid carers’ inability to work costs the economy £37 billion a year. Supporting carers to enter and stay in employment must therefore be seen not only as a social priority but an economic one. Introducing paid carer’s leave is not an expensive proposal. Modelling by Carers UK suggests it would cost between £5.5 million and £32 million per year, depending on the rate of compensation. Set against the cost of lost productivity, high turnover and pressure on health and social care systems, this is a modest and worthwhile investment.
Baroness Lister of Burtersett (Lab)
My Lords, I rise to support Amendment 135, to which I have added my name. It is a pleasure to follow the noble Baroness, Lady Smith, especially given that she spoke from lived experience, which I think is really important.
I recently attended a policy breakfast about support for working carers, sponsored by the Centre for Care, Sheffield University. The unanimous view was that the leave has to be paid to make a real difference, and that is the message received from carers themselves, gathered by Carers UK. Many, especially those on low income, many of whom as we have heard are women, simply cannot afford to take unpaid leave. In the words of the Centre for Care:
“A statutory right to unpaid carer’s leave in the context of a gender-segregated labour market with a substantial gender pay gap is likely to substantially exacerbate inequality”.
The evidence it has collected shows that we compare badly to many other countries where paid carer’s leave is now taken for granted.
As I said on Second Reading, the argument rests not simply on the social and moral case—the huge difference it would make to the lives, health and well-being of carers—but on the strong economic case. It would increase the likelihood of carers entering or remaining in the labour force, thereby supporting the Government’s aim of increasing employment and promoting economic growth. As a Government-supported task and finish group noted, supporting carers to remain in paid work represents an economic opportunity. TSB, which provides its own carer’s support scheme, is clear about the value it provides for it as an employer, and therefore is one of many organisations calling for the Bill to include provision for paid carer’s leave. It is not just big employers that are supportive: a CIPD consultation with its members found that support among SMEs was not much lower than among large employers.
The original new deal for working people promised paid carers leave. I have a different quote from that given by the noble Lord, Lord Young of Cookham. At the Commons Third Reading of the Private Member’s Bill which introduced unpaid leave just a couple of years ago, the Front-Bench spokesperson said that
“the next Labour Government will be committed to building on this legislation and introducing a right to paid carer’s leave in our new deal for working people”.—[Official Report, Commons, 3/2/23; col. 580.]
However, although he responded sympathetically on the issue on Report for this Bill in the Commons, the Minister could only say that, because the right to unpaid leave was enacted recently, the Government were
“reviewing this measure and considering whether further support is required”.—[Official Report, Commons, 11/3/25; col. 952.]
I echo the question asked by the noble Lord, Lord Young, about whether my noble friend the Minister could explain this shift in attitude. I completely understand that the Government need to consider how paid leave should be designed, not least because we need to learn from other countries. Yet what is there to consider with regard to the need for further support, given the body of evidence which overwhelmingly demonstrates the case for it? Surely, we can show our commitment to unpaid carers by writing into the Bill an in-principle provision to cover the introduction of paid leave once a review of the details is completed. This would be wholly in line with the spirit of the Bill and consistent with the Government’s missions—not least their overriding pursuit of economic growth—while demonstrating support for a group at considerable risk of poverty.
The Government have demonstrated their commitment to carers, with action already taken on carer’s allowance, although its loss for thousands of carers as a result of the planned PIP cuts points in the opposite direction. Therefore, it is all the more important to use this Bill to demonstrate our commitment to carers who are desperately trying to juggle their responsibilities in the labour market and to their loved ones and our recognition of the importance of care to our society.
Baroness Coffey (Con)
My Lords, I commend the speeches that have been made, particularly on kinship care, but recognise the challenges that carers face. I am sure that the debate on remuneration for carer’s leave will continue. I am contributing on this group because of Amendment 81, from the noble Lord, Lord Brennan of Canton. I would say that it is quite odd for this to have been grouped alongside the other issues, recognising the very serious situation of pregnancy loss. Before the noble Lord spoke, I was not aware that this was relating to an inquiry at the other end. I have only just started reading aspects of that report, so I am not as fully informed as he was in presenting this. However, there are some issues here that I am concerned about.
Thinking through this, only three other countries in the world include parts of pregnancy loss in terms of being formally considered for bereavement leave. That is not a reason not to do it, but it is important to recognise that we would still be quite a considerable outlier. It needs careful consideration. I am not dismissing it in any way, but I am conscious that the Government responded on 25 March and I am slightly disappointed that we have not yet seen an amendment tabled. I appreciate that some of these things take a bit of time, but I had hoped that in Committee we would be able to consider what the Government were going to table in this regard.
As the Government have set out in their response to the committee and as is set out in ACAS guidance, a number of these issues are already covered in terms of pregnancy or maternity-related illness. I heard what the noble Lord, Lord Brennan, said about this becoming a potential HR issue. It is discriminatory for any such illness in any way, including miscarriage, and molar pregnancy and ectopic pregnancy would be covered very straightforwardly by that.
I have a particular concern about proposed subsection (2B)(a)(iv) in his Amendment 81, which widely casts the net of any medical abortion. It is already recognised that any abortion after 24 weeks is automatically covered in bereavement leave. The same is true of stillbirth, which, in the UK, is considered to be the loss of a pregnancy at 24 weeks and above. The two are not causal or directly related—obviously, there is a correlation in the timing. It just so happens that we have our current abortion limits, with certain exceptions, up to 24 weeks. So I am concerned that, in effect, proactive abortions taken up to 24 weeks would be covered in this amendment. I do not know whether that is the intention of the Government in their response, because, as I have said to the House already, I have not yet had the chance to read the entire report from the Women and Equalities Committee.
On proposed subsection (2B)(b), I say that I have had many friends who have, not always successfully, had children through IVF. Thankfully, many people do, but they recognise when they enter into it some of the challenges they definitely will face in trying to have a child by IVF. As it stands, on average, the success rate for a woman below 38 is about 35% for any particular embryo-transfer loss. Once a woman starts to go over the age of 40, that falls—it has gone up from 2012 from an 8% to a 10% success rate in 2022. That careful consideration needs to be thought about by the Government and your Lordships in this House when we decide to extend certain entitlements, while recognising the heartbreak that can happen at certain moments in people’s lives in these particularly sensitive moments. I am conscious that this is a sensitive issue to bring up at this point in the Bill.
I do believe that I would like to understand this in more detail. I will take the time to do some more research myself, but I am very keen to hear from the Government quite where this is stretching. I appreciate they have given a certain kind of wording to the House of Commons Select Committee on this point, but the provision of further details to the Committee here would be very welcome.
Lord Fox (LD)
My Lords, I thank all speakers from your Lordships’ House for what has been an excellent debate. It is a genuine pleasure for me to participate, hopefully quite briefly.
The noble Lord, Lord Brennan, gave a moving speech, which was made more moving by the knowledge that Sarah Owen is at the Bar today, and I thank both of them for their contributions, but especially Sarah.
Amendment 81 has our support, not least as a catalyst to try to have the sort of debate we need and the careful consideration that the noble Baroness, Lady Coffey, also alluded to. I hope it can start to move things forward.
We also support Amendment 134, which was so ably explained by the noble Baroness, Lady Grey-Thompson, and supported by the noble Lord, Lord Hogan-Howe. This again is an important issue that we want to have more conversations about following this debate.
My noble friend Lord Palmer gave a very spirited and strong advocacy for kinship care, and that was supported across the House—here is another area where there is an absolutely clear and present need for carers to be officially brought into the carers’ community.
The point on fostering was also well made by my noble friend, as was the point made by the noble Lord, Lord Young, about short-term fostering as something we should seek to bring into that. All these amendments are, in a sense, broadening the scope of carers and where we should be considering. For all of them, I hope the Minister will be able to stand up and say “Let’s have a debate following this particular group. Let’s talk with interested parties to see how some or all of this could start to be moved forward”.
I hope your Lordships will excuse me if I focus on paid carer’s leave. I had the great honour of piloting Wendy Chamberlain’s Private Member’s Bill through your Lordships’ House with, as the noble Lord, Lord Young, pointed out, the strong support of the Conservative Government. During that time, I had a chance to meet a lot of carers and a lot of employers of carers—big companies such as Centrica, which the noble Lord mentioned, and much smaller companies. They all set out the advantages of having a proper, strong relationship with their carers and the starting point, which we established through that Private Member’s Bill, of unpaid carer’s leave.
Lord Hunt of Wirral (Con)
I agree with the noble Lord, Lord Fox, whose fox has not been shot.
This has been such an interesting, important, fascinating and deeply moving debate. We owe a debt of gratitude to the noble Lord, Lord Palmer of Childs Hill, for very positively introducing the fact that unpaid carers are the backbone of the care system, and for bringing us up to date with the reality of modern families. I think the Committee has spoken with one voice as we await the reply from the Government Front Bench. Have we not united in saying what we want the Government to do? It will be very interesting to hear the response. I hope they will use every moment between now and Report to be more specific about how they wish to respond to the issues that have been thrown up in this debate.
Like the noble Lord, Lord Palmer, I acknowledge the importance of kinship carers—the grandparents, aunts, uncles, siblings and other close family members who step forward when children need a stable and loving environment. These individuals often take on significant responsibilities with little preparation or support, and they always do so with compassion and commitment. The contribution of kinship carers cannot be overstated. As the noble Lord, Lord Watson of Invergowrie, and the right reverend Prelate the Bishop of Newcastle reminded us, they help prevent children entering the care system. They keep families together, and often do so at great personal and financial cost.
I have to acknowledge the contribution of my noble friend Lord Young of Cookham, who had some wonderful specific quotes to share with the Committee. There is an important strategic alliance here, particularly with the noble Baronesses, Lady Pitkeathley and Lady Lister of Burtersett, and it will be important to respond positively to the points that they have made.
I believe there is a genuine case for us to explore how we might better support those who take on these caring responsibilities in such difficult circumstances. While I appreciate that statutory leave may not be straightforward to implement, especially in the current economic climate, there is room, as the noble Lord, Lord Fox, suggested, for a wider conversation about what more might be done. There should therefore be further consultation on this matter—with kinship carers themselves, with businesses and with the wider public—to understand the practicalities and to gather the necessary evidence. If we can find a solution that is proportionate, workable and rooted in the realities faced by both carers and employers then that will deserve our serious consideration. As the noble Baroness, Lady Smith of Llanfaes, has said, there is room here for a modest move forward that would make a significant contribution.
We have to acknowledge the moving speech of the noble Lord, Lord Brennan of Canton, about bereavement leave. He spoke movingly of his Commons colleague Sarah Owen, MP for Luton North, who has blazed a trail of understanding in some areas that previously have not been properly understood, and we need to respond positively to that.
The noble Baroness, Lady Grey-Thompson, talked about serious childhood illness, pay and leave, supported by the noble Lord, Lord Hogan-Howe. That that is another area where we need to explore how we can better tackle these challenges. In all these areas, I am confident that, through continued dialogue, we can work towards a sustainable strategy.
Lord in Waiting/Government Whip (Lord Katz) (Lab)
My Lords, this has been another wide-ranging debate and I am grateful for the contributions of all noble Lords. As the noble Lord, Lord Hunt, my opposite number, just said, it has been a moving and profound debate that has demonstrated the complexities of the issues in front of us. There is unanimity across the Committee, I am sure, that we should do as much as we can to support carers. We have to ask ourselves how best we do that. We have picked up the baton from the last Government, who passed the Carer’s Leave Act, and we must move forward on that—but I am getting ahead of myself.
I join the noble Lord, Lord Hunt, in paying tribute to the noble Lord, Lord Palmer of Childs Hill, and the noble Baroness, Lady Grey-Thompson, for putting the issue of kinship care in front of us, tabling Amendments 77, 78, 79, 134, 135 and 144. I also thank my noble friend Lord Brennan of Canton for tabling Amendment 81. I will do my best to get through these amendments at a decent pace.
I will begin with kinship care, speaking to Amendments 78 and 79, tabled by the noble Lord, Lord Palmer. I join others in emphasising how greatly I and the Government appreciate kinship carers, who generously step into the breach and offer loving homes for children who cannot live with their parents. I am sure that the whole House shares these sentiments.
I reassure noble Lords that the Government are committed to ensuring that all employed parents and carers receive the support they need to manage both their work and their family lives. As we have heard, Amendment 78 aims to establish a new “kinship care leave” entitlement for employed kinship carers. Amendment 79 then seeks to creates a legal definition of “kinship care” to be used to establish eligibility for kinship care leave.
The right reverend Prelate the Bishop of Newcastle, my noble friend Lord Watson of Invergowrie and, indeed, the noble Lord, Lord Palmer, himself, rightly talked about the amazing work done by kinship carers across the country, supporting children in times of greatest stress and need, in their own households, and in so doing relieving local authorities and the wider care system.
The Government recognise that the current support for working families needs improvement. We have already begun work to improve the system for kinship carers. We are defining kinship care through other legislation that is currently before this House, and later this year we will begin trialling a kinship allowance in several local authorities.
We are pleased to say that, for the first time, through the Government’s Children’s Wellbeing and Schools Bill, we will create a legal definition of kinship care for the purposes of specific duties within that Bill: the requirement to provide information about services to kinship families, and the duty to promote the educational achievement of children in kinship care. This will help to ensure that all local authorities interpret and apply the definition uniformly in relation to the new duty to publish information required, reducing ambiguity and potential disparities in information provided about support by different local authorities. This will, we hope, make life much easier at the sharp end of providing kinship care. It is a vital part of our commitment to keeping families together and supporting children to achieve and thrive.
I am also very pleased to say that the Government have recently announced a £40 million package to trial a new kinship allowance. This is the single biggest investment made by any Government in kinship care to date; indeed, it is the first of its kind. This financial commitment could transform the lives of vulnerable children who can no longer live at home. It would enable children to be raised within their extended families and communities. As we heard from the noble Lord, Lord Palmer, and others, it would minimise disruption to their formative years, allowing them to focus on schooling and building friendships—in short, having a normal life, as we want for all our children.
In addition, qualifying employed kinship carers may already benefit from various workplace rights aimed at supporting employees in managing work alongside caring responsibilities. These include a day one right to time off for dependants, which grants a reasonable amount of unpaid leave to deal with unexpected emergencies involving a child or dependant; the right to request flexible working; and unpaid parental leave, which, through this Bill, we are making a day one right.
Employees may not automatically have parental responsibility as a result of being a kinship carer, but they can acquire parental responsibility through different legal methods such as a special guardianship order. The Government have also committed to a review of the parental leave system to ensure that it best supports all working families. This review will be conducted separately from the Employment Rights Bill, and work is already under way on planning for its delivery.
Amendment 77 would provide foster carers with one week of leave every 12 months. As we have heard, foster carers play a life-changing role in the lives of children who need a safe and supportive environment. At times when young people are facing significant challenges, foster parents offer not only care and security but emotional support and consistency. I pay tribute to all those who step forward to provide the essential service of foster-caring—not least, as we have heard, the noble Lord, Lord Young of Cookham, who has now changed his place but is very much with us in the Chair.
It is important to highlight that a range of workplace rights already exists to help employees who take on the responsibilities of fostering. From their first day on the job, employees have the legal right to take unpaid time off in emergency situations involving their dependents. This enables them to respond swiftly to sudden issues, such as arranging care for a foster child. If a foster carer is looking after a child with a long-term illness or disability, they are entitled to carer’s leave. This provides them with up to a week of unpaid leave in a 12-month period, to manage healthcare needs or attend appointments. Those fostering with the intention of adopting may be eligible for paid adoption leave, provided they meet the necessary criteria. In addition, all employees are entitled to submit a request for flexible working arrangements from day one of their employment. Given that these existing provisions go a long way to help foster carers to balance work and their foster care responsibilities, it does not seem right to add a new entitlement without a proper assessment of the need for it and the impact it might have.
Lord Watson of Invergowrie (Lab)
I appreciate what the Minister has said. If I heard him correctly, he said it would not be appropriate to introduce this leave without undertaking an assessment of how it would be applied. Will such an assessment be undertaken? I think it is important.
Lord Katz (Lab)
I am very happy to write to my noble friend with more details. We will cover some of the issues on carer’s leave in the round later in my speech, but I thank him for his intervention.
Lord Fox (LD)
With all due respect, this Bill is full of situations in which the consultation for its implementation is yet to be completed. Having adopted a principle in primary legislation, one more consultation would hardly stain the integrity of this Bill. If the Government wanted to, they could very well take on kinship care and fill in the details later—that is what they are doing with the rest of the Bill.
Lord Katz (Lab)
We may be talking at cross purposes. I am very happy to write with more details of the way that we plan to take foster care forward.
On paid carer’s leave, Amendment 135 would introduce a statutory entitlement for unpaid carers to receive their usual wage while taking carer’s leave. As drafted, the responsibility for covering these costs would lie with the employer. At Second Reading, and this evening, the noble Lords, Lord Palmer and Lord Young of Cookham, spoke powerfully on the vital role played by unpaid carers. I pay tribute to my noble friend Lady Pitkeathley for all the work she has done on fighting for carers, and to the noble Baroness, Lady Smith of Llanfaes, for speaking about her direct experience of caring. As my noble friend Lady Lister remarked, it is this sort of lived experience that brings so much to our House’s considerations of these matters.
I emphasise that the Government are committed to supporting those who combine work with care. However, there are not insignificant concerns with the amendment, which has not been changed since it was first brought forward in the other place. It does not give due consideration to the potentially significant costs it may place on businesses—particularly small businesses. It would create a situation of differential treatment between those taking leave to care for a family member or loved one under the Carer’s Leave Act and those taking other forms of leave, such as maternity and paternity leave. Those taking carer’s leave would be paid their normal wage, while other forms of leave are paid at a statutory rate, meaning that unpaid carers would be treated more favourably.
Although the Government do not support this amendment for these reasons, I assure noble Lords that His Majesty’s Government is fully committed to ensuring that unpaid carers can combine work with their caring responsibilities. We are reviewing the Carer’s Leave Act, which was introduced in April 2024 and gave employed carers a new right to time off work. We have heard tonight, as the noble Lord, Lord Fox, expressed, the depths of feeling and concern that this is done properly. We have had the baton of the Carer’s Leave Act passed over; we want to make sure that we get this right, hence the review that we are undertaking.
Baroness Lister of Burtersett (Lab)
I quite take my noble friend’s point, but we were not saying how it should be paid; we were asking for an acknowledgement of the principle that it should be paid and leaving it up to the Government to then review the details of how it should be paid. It would be good to have at least an acknowledgement that that is where the Government are heading.
Lord Katz (Lab)
I fear I may disappoint my noble friend slightly, but it is important that, if we are going to review these things, we review them in the round, and that I do not pre-empt that review at the Dispatch Box tonight. We are considering whether further support is needed, including potential options for paid leave, while being mindful of potential impacts on businesses.
It would be worth spending a little more time discussing the review, as several noble Lords have now asked about it. The review is under way and officials in the Department for Business and Trade have already spoken to over 70 employers, third sector organisations and charities, such as Carers UK, in the course of undertaking the report. We have held events across the UK, in Wales, England and Scotland, and this engagement will continue as the review progresses, alongside both qualitative and quantitative research.
I will answer a couple of direct questions on the review. To answer the noble Baroness, Lady Coffey, we will be considering international examples. To answer the noble Lord, Lord Young of Cookham, we will be taking into account the immigration White Paper, which he so keenly observed has just been published. The review will assess the impact of unpaid carer’s leave, introduced last year, while considering whether further support is needed, including potential options for paid leave, while being mindful of any potential impacts on businesses.
To respond again to my noble friend Lady Lister, we do not want to pre-empt the outcome of the review. We must allow it to run its course, to ensure that we make a considered, evidence-based decision about what further support would most benefit unpaid carers.
As time is running on, I will speak to Amendment 134. I begin by thanking the noble Baroness, Lady Grey-Thompson, and the noble Lord, Lord Hogan-Howe, for bringing attention to this issue. I pay particular tribute to the work done by the charity It’s Never You, which worked with the noble Baroness on this amendment. I join her in paying tribute to Ceri and Frances Menai-Davis, who have so bravely and tirelessly campaigned in memory of their son, Hugh. I am so pleased that they could join us in the Committee to understand how seriously the whole House takes the issue they have raised—it gives us the opportunity to thank them again for their hard work on the issue.
This amendment would extend provisions on neonatal care leave and pay to the parents of all children up to the age of 16 who are seriously ill for an extended period of time, entitling parents to paid time off work at the rate of statutory neonatal care pay. As I have said, this is a very important issue, and I wholly acknowledge how incredibly difficult childhood illness can be for parents. Equally, I recognise the vital role played by parents and other family members who provide care in such circumstances. The importance of being able to spend time by the bedside of a loved one who is unwell cannot be overstated.
To respond directly to the noble Baroness, Lady Grey-Thompson, the Government are reviewing the existing entitlement to carer’s leave, as I have already mentioned, and considering whether further changes may be helpful in supporting those who provide care to loved ones alongside work. For instance, employers are able to offer enhanced parental leave beyond the four-week limit in a year, and we encourage employers to consider doing this in unusual circumstances, such as a child becoming seriously ill. It is important that parents of disabled children are supported to return to or remain in work, if this is what they choose to do. Parents of disabled or seriously ill children may be protected from employment discrimination, by association with a disabled person, under the Equality Act 2010. These may well be more appropriate avenues through which to consider the issue.
While I am afraid that the Government cannot support the amendment at the present time, I understand that officials in the Department for Business and Trade have extended an invitation to the It’s Never You campaign to further discuss its proposals as part of the ongoing review of carer’s leave. I hope that noble Lords take that as a promissory note of how seriously we take the issue. I certainly hope that the Menai-Davises will be able to contribute their valuable perspective on this ongoing piece of work.
Amendment 144, on carers and equality action plans, would require employers to consider caring as a matter related to gender equality within any equality action plans, with reference to Clause 31 of the Bill. I thank the noble Lord, Lord Palmer, for drawing attention to the disproportionate impact that is felt by women when it comes to providing unpaid care, and particularly women in the workplace. This is undoubtedly a very important issue.
The provision in the Bill is designed to emphasise gender equality issues, but this amendment risks inadvertently strengthening existing assumptions about who provides care within our homes, families and society. The clause as it stands can already accommodate consideration of the needs of carers. We want to ensure that a variety of actions can be taken to support employees in a range of circumstances, so we fully expect action plans to consider those with caring responsibilities. Action plans are a vital step in supporting employers to make progress on closing the gender pay gap. Acknowledging the needs of those who provide unpaid care will no doubt play an important role in this, given that it is a significant contributing factor to the gap.
Finally, I will speak to Amendment 81, tabled by my noble friend Lord Brennan of Canton. I think the whole House was moved by his words on the issue. He calls himself a vessel, but he was certainly no empty vessel—if he will excuse my rather poor pun for this time of night. The amendment would extend the scope of bereavement leave to include pregnancy loss before 24 weeks. It would apply to those who experience miscarriage, ectopic pregnancy, a molar pregnancy, a medical termination or an unsuccessful attempt at IVF due to embryo-transfer loss.
The loss of a baby at any stage is incredibly sad and difficult. As my noble friend Lord Brennan said, it is not a disease or an illness. The Government acknowledge that there is a clear gap in support for those who suffer a pregnancy loss before 24 weeks and that there is a need for time to grieve and recover, which, as many noble Lords from around the Committee recognised, was so helpfully highlighted by the work of the Women and Equalities Committee. It would be most remiss of me now not to join my noble friend Lord Brennan and indeed other noble Lords in paying tribute to the work of the committee, and in particular of my friend and comrade Sarah Owen, who has so movingly told of her own experience and has thought about the wider piece around this important and sensitive issue. We appreciate the way in which the committee has brought this issue forward.
We fully accept the principle of bereavement leave for pregnancy loss, as raised in the amendment, and we look forward to further discussions with my noble friend and other noble Lords as the Bill continues in this House. As my noble friend Lord Brennan said, this can help bring a more compassionate and humane face to the workplace as people deal with events that, frankly, at this current point in time, carry far too much stigma, secrecy and basic misconception of the facts.
Lord Brennan of Canton (Lab)
Can my noble friend the Minister confirm that the meaning of his words is that it is the intention of the Government to bring forward amendments that he is about to get to on Report in this regard?
Lord Katz (Lab)
It will not come as a surprise to my noble friend that we cannot accept the amendment in front of us today. However, I am very happy to work with him to ensure that your Lordships’ House can consider this most important issue again on Report. So I respectfully ask him not to move this amendment and ask that the noble Lord withdraws his amendment.
Lord Palmer of Childs Hill (LD)
I feel humbled by this debate. It started off for me with the noble Lord, Lord Watson of Invergowrie, and the right reverend Prelate and it went on in the same vein, right across the House: the feeling that there was this Bill, the Employment Rights Bill, and that we recognise that within employment rights there are carers who have been ignored and need to be paid for what they are doing, for people and for the system that they underwrite.
The Government have not really replied in positive enough terms on this, but we will come back to this on Report with specific amendments. By that time, I hope that Government Ministers will go back to their colleagues in the other place and say that across the House, from all parts of this House, there was a feeling that unpaid carers need to be recognised in the Employment Rights Bill, and that kinship carers, who have not been recognised before, need to be recognised. We hope the Government have heard this and we look forward to a positive response by Report. I beg leave to withdraw my amendment.
Lord Hogan-Howe
“Special constables: right to time off for public duties(1) The Employment Rights Act 1996 is amended is follows. (2) In section 50 (Right to time off for public duties), after subsection (1) insert—“(1A) An employer shall permit an employee who is a special constable, appointed in accordance with section 27 of the Police Act 1996, section 9 of the Police and Fire Reform (Scotland) Act 2012 or section 25 of the Railways and Transport Safety Act 2003, to take time off during the employee’s working hours for the purpose of performing their duties.(1B) In section (1A), “duties” means any activity under the direction of a chief officer of police.””Member's explanatory statement
This new clause gives employees who are special constables the right to time off to carry out their police duties.
Lord Hogan-Howe (CB)
My Lords, my amendment is supported by the noble Lords, Lord Paddick and Lord Evans, for which I am grateful. The amendment seeks to add special constables to the group of people in the criminal justice system who have the right to time off to fulfil their duties.
In 2018, Section 50 of the Employment Act was amended to include lay observers in prisons and members of immigration visiting committees for immigration centres and short-term holding facilities among those, such as magistrates and JPs, who have the right to take time off from their employment. Of course, each of those groups of volunteers is essential to the effective functioning of the criminal justice system, and so are special constables, who have existed since being created by the Special Constables Act 1831, although today’s version was really created by the Police Act 1964.
Special constables are special by name and special by nature, in my view. They are unpaid volunteers who have all the powers of a regular constable and take all the risks that their colleagues take, too, of being stabbed, assaulted and people abusing or spitting at them. They are paid expenses, but of course this covers only their outgoings and they make no profit. They deal with issues such as suicides, terrible road traffic collisions and many other things that regular officers have to deal with, but these are volunteers. After being trained, they are usually expected to be on duty for at least four hours a month. Most do very much more than that; some work every weekend. During breaks in employment, they often work almost full-time hours. Some work at this for over 20 years.
Special constables were designed to be a contingency for war, backfilling the police officers who would be expected to join the Armed Forces. Given many of the uncertainties in the world at the moment, it is not unrealistic to expect that we may call on them in the foreseeable future.
Special constables are a visible representation of community policing, giving of themselves without payment to stop crime and keep order. For me, they have always been a way to have the community in the police station, holding their regular colleagues to account and not captured by the prevalent police culture of the time—almost a pre-body-worn video system before that was even thought about. Some 25% of them go on to become regular officers, so it is not a bad recruiting route and not a bad way for them to test whether they would like to be a police officer or whether police officers think that they are going to be suitable full-time colleagues in future.
At present, the numbers of special constables are dropping quite dramatically. In September 2023, there were 6,330 in England and Wales, but by September the following year there were only 5,818. That is just one-third of the figure it was 10 years ago.
In this context, on the grounds of equity with other volunteers in the criminal justice system, surely we need to enhance the volunteer offer to encourage recruitment, retention and diversity. The Government have said that they want strategically to boost neighbourhood policing, with around 13,000 more officers and PCSOs in the coming years. Surely that priority alone demands that special constables—the most visible of community-based policing—have a priority in recruitment. This amendment would assist in that process.
No doubt the Government may say that this should not be approached in a piecemeal way and that they will make announcements when they say more about neighbourhood policing. Many of those announcements have been made, and this opportunity has been missed, I would say.
Some may say that this is a burden on small businesses, but I do not accept that. The Section 50 right for volunteers has a reasonableness clause in it, so a business of three people may struggle to give any time off, whereas a business employing 10,000 people may have far more flexibility. For example, it is not reasonable for an employee to consistently take time off when the business is particularly busy and needs them.
To be fair, those people come back to work better trained, confident and rounded individuals. As I said earlier, they have had a few new experiences of life—some good and some not so good. The Government may say that, if we do that for this group of volunteers, we may have to do it for others, and we may need to consider that as a whole. I do not accept that either; this reform is long overdue and is supported by the National Police Chiefs’ Council and the specials’ own representative body, the Association of Special Constabulary Officers.
There is a huge gap in recruitment and retention, and that problem is now and the time to deal with it is now. This is a great opportunity to assist what is a special group of people whom we probably have all taken for granted for too long. The Government have an opportunity in this Bill to do something to help, and which will cost nothing.
Lord Paddick (Non-Afl)
My Lords, I rise to support Amendment 82 in the name of my friend and former colleague, the noble Lord Hogan-Howe, which I have signed. I declare an interest as a paid non-executive adviser to the Metropolitan Police Service. I apologise that I was unable to speak at Second Reading, but I intend to focus in a disciplined way on the amendment, unlike some colleagues.
In London, the Metropolitan Police, the UK’s largest police force, has, in recent years, been unable to recruit police officers to the level it has been funded for, and is now unable to recruit full-time regular police officers because of budget constraints. The Labour Government’s community policing guarantee, to recruit 13,000 more neighbourhood police and Police Community Support Officers, appears to be challenging, given that the Metropolitan Police accounts for about 19% of all UK police officers and about 25% of the UK police budget.
One low-cost way to recruit more community police officers is to take a no-cost-to-the-taxpayer measure to encourage members of the public to become special constables, such as that proposed in the noble Lord’s amendment. As of March 2023, the contribution of special constables was saving an estimated £85 million to £90 million a year in policing delivery, according to government statistics.
The Minister may well say, as Ministers are prone to do—for example, on the issue of humanist weddings—that while they agree in principle with the amendment it needs to be part of a holistic approach to volunteering generally; that the Government will consider this and bring forward such legislation in due course, if necessary; but that they do not want to create an uneven playing field. However, if they intend to meet the 13,000 uplift in community police officers, they need to create an uneven playing field, providing more of an incentive for the public to volunteer to be special constables than to be any other sort of volunteer.
In any event, the playing field is already uneven, as the noble Lord, Lord Hogan-Howe, has just said, in that in 2018 the Government—albeit a different Government—amended Section 50 of the Employment Rights Act 1996 to include four groups of volunteers in another part of the criminal justice system, such as independent prison monitors. The reason was to attract applicants in full-time employment, who tend to be younger, and thereby improve the diversity of these volunteers, who tended to be skewed in favour of older age groups.
Not only do the police need fit, younger people to volunteer to be special constables but, particularly in London, they need local volunteers who know and reflect the diversity of the communities in which they will serve. The proportion of special constables from minority backgrounds currently serving is higher than it is among regular full-time police officers, and with the added incentive that this amendment would provide, we have the prospect of recruiting more ideal volunteers, who know and reflect their local communities, as special constables.
Were these not good enough reasons to support this amendment, given the current issues around police culture—highlighted by the noble Baroness, Lady Casey of Blackstock, in her report on the cultural issues facing the Metropolitan Police—recruiting more officers from minority backgrounds, working part-time and hence less influenced by existing negative aspects of police culture, would assist in changing those undesirable aspects of police culture and increase public trust and confidence. Not only would the public see more police officers who look like them; they may recognise them as members of their local community.
The special constabulary has also proved to be a fertile recruiting ground for the full-time regular force, as the noble Lord, Lord Hogan-Howe, has just said, providing an opportunity for those from minority backgrounds in particular to try out policing before making a full-time commitment to it. Recruiting more volunteer special constables could also lead to improving the diversity and local representation among the full-time regular police force.
As with the changes made in 2018 to the 1996 Act, there are compelling reasons to extend Section 50 of the current Employment Rights Act to special constables, and I enthusiastically support this amendment.
Lord Fox (LD)
My Lords, we could hardly have expected two more expert speakers to propose this amendment. This is another case where society is getting something on the cheap and, even though it is a different argument from the one about unpaid carers, it is another way where, in fact, we are not recognising the value that society is getting from these people who work as special police officers.
I really want to hear what the Government say on this and I hope it is not the sort of answer that my friend, the noble Lord, Lord Paddick, suggested it might be but is something rather more constructive that can come forward the next time this Bill comes up.
Lord Sharpe of Epsom (Con)
My Lords, I would very much like to thank the noble Lord, Lord Hogan-Howe, for his important amendment in this group and for the valuable context he gave in his opening remarks, and the noble Lord, Lord Paddick, for speaking so eloquently to it as well.
They are both right. Special constables play a vital role in our communities and, as they pointed out, they serve alongside other police officers, offering their time and their skills to protect the public and contribute to the safety and well-being of society at large. As the noble Lord, Lord Fox, has just pointed out, society benefits from their work.
It is often overlooked, though. For many, being a special constable is something they do alongside other regular employment. These individuals are already balancing their professional lives with the demands of policing and, as has been pointed out, that can be both challenging and rewarding.
I could bore on for hours about how valuable special constables were when I was policing in Hong Kong—but I will not. I welcome this amendment and believe it represents a small but significant way to better support those who give their time to serve our communities by ensuring that special constables can fulfil their duties without facing conflicts with their employment obligations. We would be sending a strong message of support for public service generally, as well, of course, as for special constables. So we are very minded to support this amendment.
Lord Katz (Lab)
My Lords, this has been an interesting debate—some might say “esoteric”, but not me— and indeed, thankfully, a slightly shorter one. I thank the noble Lord, Lord Hogan-Howe, for tabling Amendment 82, co-signed by the noble Lords, Lord Paddick and Lord Evans of Rainow. I am also grateful to the noble Lords, Lord Hogan-Howe and Lord Paddick, for meeting me, the Minister and the noble Lord, Lord Leong, earlier today to discuss this amendment. It was really helpful to have the opportunity to, as we heard from both noble Lords this evening, hear the background context to the work of special constables, how they are regarded within the force and how they are integrated within the forces in which they serve.
Amendment 82 would give employees who are special constables a statutory right to time off from work to carry out their voluntary police duties. This Government recognise, as I think we all do across the House, and really value the important role that special constables play in our communities, and we are committed to ensuring that they are supported to navigate those responsibilities that they carry out as special constables alongside their working life.
Special constables, along with the full range of police volunteers, bring valuable and diverse skills, which complement the roles that full-time officers and staff play in delivering the best possible service to the public in protecting our streets and making sure that our communities are safe.
Lord Hogan-Howe (CB)
My Lords, I thank the noble Lord, Lord Katz, and his colleagues for providing the meeting earlier for me and the noble Lord, Lord Paddick, and for the time they took, on a long Bill with many amendments, to spend some time with us. We both appreciated it.
The Minister just said—he realised that I possibly might not agree—that it was invidious to draw distinctions between volunteers, but that is what happened with the employment Act in 2018, which distinguished between prison visitors and immigration. I see no reason why it cannot happen again, in principle. It does not seem to be a real problem.
The Minister said that it is hard to establish how many people might use this right. However, we know that it is no more than about 5,000 people—there are so few of them—in a workforce of about 26 million, so it is not going to cause a massive disruption to employers and employees.
On the voluntary arrangement with the NPCC whereby employers voluntarily give time off, the Minister will know that a survey established that about two-thirds of those who tried to use that scheme were unable to access it because their employers denied them that opportunity. That probably means that this right is particularly needed at the moment.
Finally, although I was not aware of the Hong Kong example—which I guess has a little of the British tradition—there are not many, if any, places in the world where a police officer can be a volunteer and take all the risks and have all the powers. It is a unique thing in the UK. If you talk to officers from Australia or America, they say, “Let’s get this right: they pay them nothing and they take people on and try to arrest them?” They cannot believe it. It is a rare thing we have, and it would be a shame to lose it, but we are in the process of losing it. All that said, of course I am prepared, at this stage, to withdraw my amendment.