Arrangement of Business
The Deputy Chairman of Committees (Viscount Stansgate) (Lab)
If there is a Division in the Chamber, we will adjourn for 10 minutes, but noble Lords have only to look at the screen to see that no Divisions are scheduled for today, thank heavens.
Because of the weather, we will have the doors open. I urge everyone to please drink plenty of water. I can tell those in the Room who are able to take their jackets off that I shall be gazing with envy at them while we proceed with the business.
Public Authorities (Fraud, Error and Recovery) Bill
(1 day, 4 hours ago)
Grand CommitteeRead Hansard Text Read Debate Ministerial Extracts
Lord Vaux of Harrowden
“(2A) The functions are exercisable only when accompanied by an authorised person from the police force.”Member’s explanatory statement
This amendment seeks to restrict investigators’ powers of entry, search and seizure to situations when they are accompanied by an authorised person from the police force.
Lord Vaux of Harrowden (CB)
My Lords, I shall be brief. When we discussed a previous group on Part 1 that was similar to this, I believe the Minister stated that those using search or other powers would always be accompanied by a police constable, so I suppose I am looking for confirmation that that is the same in this case. If it is, I am curious to know why we really need the powers and why it cannot be left to the police to exercise them.
I have one other, more important question. On the powers in Clause 76, under the DWP powers, new subsection (4)(i) refers to
“section 117 (reasonable use of force)”.
Slightly oddly, I have just discovered that that was not included in the powers for the PFSA, so can the Minister explain why the DWP thinks it needs to be able to use reasonable force when the PFSA did not? I beg to move.
Lord Palmer of Childs Hill (LD)
My Lords, as we consider Amendments 92 and 93 from the noble Lord, Lord Sikka, moved by the noble Lord, Lord Vaux, on his behalf, it is important to reflect on the balance between effective fraud prevention and the safeguarding of individual rights. Amendment 92 proposes that investigators’ powers of entry, search and seizure should be exercised only when accompanied by an authorised member of the police force. This approach could provide an additional layer of oversight and reassurance to the public, but it may also introduce operational complexities that could affect the speed and efficiency of investigations into public sector fraud.
Similarly, Amendment 93 seeks to require court authorisation before the Secretary of State can appoint authorised investigators. This would introduce judicial oversight, which is a well-established safeguard in many areas of law enforcement, and it could help to prevent the potential misuse of investigatory powers. But it may also add—as I said before—procedural steps that could delay urgent investigations, possibly hindering the recovery of stolen public funds, which is what this debate is all about.
Both amendments raise important questions about proportionality and accountability. I look forward to hearing the views of colleagues and the Minister on how best to achieve the right balance in this legislation, and I await their contributions.
Viscount Younger of Leckie (Con)
My Lords, I also wish to be brief and will cut down my notes, but this is a good opportunity to raise a number of points. I am very pleased that the noble Lord, Lord Vaux, has spoken to Amendments 92 and 93, as supported, or added to, by the noble Lord, Lord Palmer.
I share the principle that underpins Amendment 92 in the name of the noble Lord, Lord Sikka—that the powers of entry, search and seizure provided for in Clause 76 must be exercised responsibly and proportionately, with proper regard for the rights of individuals. However, my main point here is that, while the amendment aims to provide a safeguard by requiring investigators to be accompanied by a police officer when exercising these powers, I suggest that we need to balance that safeguard with a degree of practicality. If the use of these powers is deemed serious enough to require a police presence, one might reasonably ask an obvious question: why would the police not simply carry out the action themselves, under existing powers—I think that was the point that the noble Lord, Lord Vaux, made—rather than acting in an accompanying or supporting role? If these powers are to be used more routinely—for example, to support the investigation of lower-level but still costly fraud—do we risk placing a significant administrative and resource burden on our already overstretched police forces? I could say more on this, but I will not.
Amendment 93, also in the name of the noble Lord, Lord Sikka, seeks to insert an additional layer of judicial oversight into the appointment of authorised investigators by requiring that their authorisation is subject to court approval, rather than left solely to the discretion of the Secretary of State. Without going into the detail, I support the principle behind this amendment.
I will conclude by asking some questions of the Minister on process, which has been a consistent theme on this side in our previous four days in Committee. I am not expecting answers now; it is really to put down the questions along the themes that I have just spoken to. We have had some verbal reassurance from the Government that these powers will be used against property and not people. I am not quite sure how reasonable force can be applied against property but, more than this, it is clear from the text of the Bill that this is not legally guaranteed. Reasonable force could be wielded against people by DWP officers; I hope that the Government can provide more clarity on the balance of that. Can the Minister confirm that these powers could in fact be used against people, as well as property? That is quite an important point. Again, the argument is about whether the police or the DWP may be required. In addition, can she give us some more information as to why she believes these powers need to be granted to civil servants in the DWP?
I say again that the police are the recognised authority, who have legitimacy, in the eyes of the public, to exercise and apply PACE powers. I feel that the Government have a duty to defend, quite strongly, why they want to grant these sweeping powers to members of a government department such as the DWP. We have a police service for a reason: officers are trained, regulated and experienced in using these powers appropriately. If fraud is suspected, particularly at a serious level, is it not right that it should be investigated by the police and not delegated to civil servants?
My concluding comment is that we should be cautious about expanding investigatory powers without a clear and compelling case. My final question to the Minister is: what justification is there for bypassing the police? That plays into my main question, which is: whither the police and whither the DWP?
The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)
My Lords, I thank noble Lords for their comments and questions. I will speak first to Amendment 92. The amendment would undermine the policy intent of this part of the Bill, so we cannot accept it. The DWP leads investigations into social security matters and, as a result, our staff are better positioned to search for items relevant to these investigations—the things that they deal with, such as benefit claim packs or documents related to fraudulent identities. Requiring the police to be present for all DWP search and seizure activity, including investigative tasks related to securing criminal evidence, would erode the anticipated obvious benefits of the measure to both the DWP and the police. Crucially, it would divert the police away from focusing on the crime within our communities that only they can deal with and dealing with the human victims of those crimes.
These powers allow the DWP to apply to a court for warrants to enter a premises, conduct search and seizure and apply for and exercise production orders, with or without the police present. That clarifies the point made by the noble Lord, Lord Vaux. They provide the DWP with greater control over its own operations and ensure that police time is not spent undertaking administrative tasks on the DWP’s behalf.
However, I reassure the Committee that safeguards are in place to govern the use of these powers. First and foremost, court approval must be granted for all warrants. The requirements for a DWP warrant application will be as strict as those for a police warrant application. Furthermore, the DWP intends to exercise these powers exclusively in cases involving serious and organised crime. This is not novel. Similar powers are already being used by HMRC, the Food Standards Agency and the Gangmasters and Labour Abuse Authority, which can undertake search and seizure activity without needing to be accompanied by the police.
Amendment 93 would impose unique obligations on the courts that they do not face in respect of other government departments with similar powers. PACE powers do not require the individual exercising them to be appointed by the court and there is no clear reason for the DWP to be any different. DWP-authorised investigators, like others who exercise PACE powers, will be subject to the PACE code of practice relating to search and seizure activity and will be required to follow the same procedures and processes as the police when submitting a warrant application to the court. These are not standards set by the DWP; they are set out in PACE, which all bodies exercising these kinds of law enforcement powers must adhere to. Specialist training must be successfully completed before authorisation is given and only then can an authorised investigator exercise these powers on behalf of the Secretary of State. That approach ensures that the correct responsibilities are attributed to the Secretary of State and the courts.
On the question relating to the PSFA, I am advised that it is not that a constable necessarily has to be present, but somebody with those powers, who may not be a police officer but could be from the National Crime Agency, the Serious Fraud Office, et cetera. As I said, the police do not always have to be there, if it is not necessary. There will be occasions when it will be necessary. For example, the previous Government published a fraud plan in which they recommended that powers of not only search and seizure but arrest be taken. We have decided not to take those powers, so if there needed to be an arrest, we would need to have police officers with us. If there were a risk of serious violence, again, the police would need to be present, but not otherwise.
On the question of force, the provisions set out in Clause 76 provide powers under PACE to enable DWP serious and organised crime investigators to apply for a search warrant to enter a premises, search it and seize items, with or without police involvement in England and Wales. The clause also enables authorised investigators to apply to a judge for an order requiring an individual suspected of social security fraud to provide certain types of sensitive information when relevant to the criminal investigation. It also provides for the use of reasonable force to conduct a search, such as breaking open a locked filing cabinet to search for materials. The clause provides that these powers can be used by an authorised investigator who is authorised by the Secretary of State.
To be clear, a warrant provides for the powers that can be deployed when that warrant is exercised. Our authorised investigators in DWP will not use reasonable force against people, although they may use it against property, such as breaking open a locked filing cabinet to retrieve a laptop or other evidence. However, the reason it has to be here is that, when the DWP applies for a warrant, that warrant must cover any activities that may need to be undertaken by either the DWP or the police, so although our investigators will not use reasonable force against people, it may be necessary for the police to do so when they are accompanying the DWP. That is why the legislation is drafted that way. If it were not, police out there on our warrant would not be able to use reasonable force and there may be occasions on which they need to do so. I hope that that clarifies matters for the noble Lord.
Lord Vaux of Harrowden (CB)
Can the Minister explain why the DWP needs that power but the PSFA does not? The two clauses in the Bill are otherwise identical and differ only in respect of the reasonable force element. If the PSFA does not need it, I do not understand why the DWP does.
Baroness Sherlock (Lab)
The expectation is that we will be dealing with different kinds of crime. We are talking about serious and organised crime, where we will go out looking for evidence. We believe we do need these powers. If there is another argument behind that I am happy to write to the noble Lord. I have explained why the DWP needs them, and we clearly do need them in these circumstances because without them we could not conduct this work. The DWP has lots of experience because we already do this work; the police just have to go out with us, to be there and to do the searching. So we know what we need and therefore we know that we need these powers. If there is anything else I can add on the PSFA, I will write to the noble Lord.
Viscount Younger of Leckie (Con)
The Minister may have just answered my question, which is a slightly opaque one, perhaps. Is it a good assumption that in any search of a property by the DWP when it suspects fraud, members of the DWP will always go prepared with the necessary back-up, including the police or members of the NCA, if they suspect it is going to be a challenging search—or is that wrong?
Baroness Sherlock (Lab)
As I said, the police might need to be present if we felt there was a risk of any serious violence. If it was felt there might be a need for arrests or, as the noble Viscount has suggested, there was a possible risk of violence, the police would be asked to accompany DWP officers. I have given those assurances, so I hope the noble Lord will withdraw the amendment.
Lord Vaux of Harrowden (CB)
My Lords, I thank everyone who has taken part in this short but, I hope, illuminating debate. I have concerns about these police powers being given to civil servants and I do not think I am alone in that respect. I am comforted, to some extent, by the fact that these will be used only in the cases of serious and organised crime. I wonder whether the solution, therefore, is to put that in the Bill and put that safeguard in place, because I think that would comfort most people who have the concerns that we have. Perhaps that is something that the Minister might be willing to discuss between now and Report. That said, I beg leave to withdraw the amendment.
Baroness Sherlock
Member’s explanatory statement
See the explanatory statement for my amendment to Schedule 4, page 101, line 15.
Baroness Sherlock (Lab)
My Lords, government Amendments 94 to 97 are minor and technical in nature. In England and Wales, the common law does not permit access to material protected by legal professional privilege under any circumstances. However, relying on this common-law exclusion would not extend to Scotland. In addition, a different definition of legal privilege applies in Scotland. To ensure that the original intent is maintained, this position is now set out in a single provision within new Schedule 3ZD.
These amendments make it explicit that if the information being sought relates to personal records which involve confidentiality of communications that could be maintained in legal proceedings in Scotland, it cannot be seized, copied or obtained, et cetera. This ensures that the same protections for information of this type apply in Scotland as they would in England and Wales. I hope that these amendments are clear and I beg to move.
Lord Palmer of Childs Hill (LD)
My Lords, as we turn to government Amendments 94 to 97, I wonder, as I always do when there are lots of government amendments to their own Bill, whether enough thought has gone into it in the other place.
I know that these proposals are primarily technical, with the key aim of simplifying the drafting of new Schedule 3ZD to the Social Security Administration Act 1992. Government Amendment 96 introduces a single clear prohibition on the seizure or examination of information of legal privilege. This streamlining could help to clarify the legal position for both investigators and those subject to investigation, ensuring that the Bill’s provisions are easier to interpret and apply in practice.
Clarity in legislation is always desirable, especially in complex areas such as fraud investigation, where the rights of individuals and the needs of public authorities must be carefully balanced. At the same time, it is important to consider how these amendments interact with the Bill’s wider objectives of safeguarding public money and equipping authorities with the tools needed to tackle fraud and error effectively. Ensuring that information which is subject to legal privilege is properly protected is a long-standing principle within our legal system. These amendments appear to reaffirm that commitment without substantially altering the Bill’s intent. I have no problem in agreeing with what should have been in the Bill at the beginning.
Viscount Younger of Leckie (Con)
My Lords, my remarks largely chime with those made by the noble Lord, Lord Palmer. The Committee will be relieved to know that this is my shortest speech. I offer some measured support for these amendments. They address the important principle of the protection of legally privileged material, and in a way that simplifies and clarifies the drafting of this part of the Bill.
The right to legal professional privilege is, of course, a cornerstone of our justice system. That principle should be unambiguous in legislation of this kind. These amendments seek to express that safeguard more clearly through a single consolidated position. There is certainly merit in that. A simplified and consolidated statement of the limitation on investigatory powers in respect of privileged material is likely to be easier to apply in practice and could reduce the risk of inadvertent overreach.
Baroness Sherlock (Lab)
My Lords, I am grateful for the support and take the chiding in the spirit in which noble Lords intended it.
Government amendments are a key part of the legislative process. Noble Lords will have seen them from time to time, allowing for the refinement and improvement of Bills as they move through Parliament. It is critical that the Bill’s provisions comply with the distinct legal jurisdiction of Scotland. Every effort has been made to ensure that this is the case. We have worked closely with the Office of the Advocate-General for Scotland and with officials in the Scottish Government.
Following an additional review of the Bill prior to Committee, the Office of the Advocate-General for Scotland identified the need for a minor amendment to ensure that the powers would operate in Scotland as intended. We felt it was important to make the law clear in the Bill. I am grateful for noble Lords’ grace on this.
Baroness Sherlock
Member’s explanatory statement
See the explanatory statement for my amendment to Schedule 4, page 101, line 15.
“Material subject to legal privilege
10 Nothing in this Schedule confers power to— (a) require any person to provide information, or(b) seize, remove, take a copy of or otherwise record anything,in respect of which a claim to confidentiality of communications could be maintained in legal proceedings.”Member’s explanatory statement
This amendment, together with my other amendments to Schedule 4, simplifies the drafting of new Schedule 3ZD to the Social Security Administration Act 1992 by creating a single prohibition on the seizure etc of information subject to legal privilege.
Member’s explanatory statement
See the explanatory statement for my amendment to Schedule 4, page 101, line 15.
Baroness Sherlock
Member’s explanatory statement
This amendment and my other amendment to clause 85 remove unnecessary references to a payment or credit, both of which are within the relevant definition of “benefit” already as a result of section 121DA(5) of the Social Security Administration Act 1992.
Member’s explanatory statement
See the explanatory statement for my other amendment to clause 85.
Baroness Finn
Member’s explanatory statement
This amendment would ensure that the Secretary of State did not have the power to direct the independent person to review only certain timeframes.
Baroness Finn (Con)
My Lords, Amendments 99A to 99C have been tabled, as ever, in the spirit of constructive scrutiny and with the aim of strengthening one of the more significant accountability provisions in the Bill: the independent review process set out in Clause 88.
These amendments are modest, reasonable and necessary. They are not designed to undermine the intention of Clause 88 but quite the opposite: to give that clause the clarity, independence and rigour that an effective review mechanism surely must demand. Fundamentally, they seek to correct the text in the Bill as drafted, as this would not provide for a proper independent review process of the exercise of powers under this part of the Bill. As we have been clear throughout these days in Committee, having a proper, full and independent review mechanism is an essential requirement to balance the powers granted.
Let me begin with Amendment 99A. As currently drafted, new Section 109J, to be inserted by Clause 88, allows the Secretary of State to direct the independent person to review only certain timeframes, saying in subsection (1):
“The Secretary of State may give the independent person appointed … directions as to the period to be covered by each review under section 109I”.
This, in our view, strikes at the heart of the independence that the clause is meant to enshrine.
If the Secretary of State can determine the scope of the review in such a narrow and discretionary fashion, deciding what is in and what is out, we risk reducing the entire review process to something partial and predetermined. An independent reviewer must have the freedom to examine the full timeline of events, decisions and outcomes as they see fit, not just the periods that a Minister deems relevant. This amendment would remove the power for the Secretary of State to constrain that scope. It would ensure that the independent person can review what needs reviewing, not merely what it is convenient to review.
Further to this, Amendment 99B addresses another area in which we believe the clause falls short of its intended purpose. As present, new Section 109J(3) states:
“The Secretary of State may disclose information to the independent person”.
We do not think this is adequate. For a review to be meaningful, the reviewer must be empowered to access all relevant material. It cannot be left to the Minister to determine what relevant information may or may not be disclosed to the independent person for review. By replacing “may” with “must”, this amendment would impose a basic but essential duty for the Government to co-operate with their own independent review mechanism. This should not be controversial. If the review is to be credible both in substance and perception, the provision of relevant documents, data and records must be a legal obligation, not a voluntary gesture. Our amendment would ensure that the independent reviewer could operate with true independence and without the bias that the discretionary drafting currently in the Bill implies.
We must appreciate that if the Secretary of State can direct the scope and scale of these independent reviews, they cannot truly be called independent. As noble Lords across the Committee will know, the outcome of such a process is only as good as the information that is put into it. I am sure that this Minister would not allow biased information or timeframes or seek to direct the independent reviewer. But, as noble Lords have previously made clear in Committee, we must legislate for the future and future Ministers. This cannot be done on the basis of guarantees alone. I trust the Minister implicitly, but I do not know—indeed, none of us in this Committee knows—that we could always say the same about her successors. It is important that we ensure that this independent review process is independent from day one and there is no risk of it becoming a rubber-stamping body used to sign off favourable reviews on the back of limited information and narrow timeframes.
Finally, Amendment 99C would compel the appointment of independent persons to carry out reviews in England, Wales and Scotland. The Bill in its current form allows the Secretary of State to do so but does not require it. We think that is a mistake. Public sector fraud is not a phenomenon confined to one part of the United Kingdom. If we are serious about building a coherent and credible national response, it follows that there must be consistent independent scrutiny across all three nations. Leaving this to ministerial discretion opens the door to uneven practice and potential political selectivity. By making the appointment of independent reviewers mandatory across the nations, we would create a consistent framework for accountability —one that reflects the devolved landscape while still holding the centre to account.
Taken together, these three amendments seek to reinforce what I believe the Government want to achieve: an independent, well-informed and effective review mechanism. They would ensure that reviews are not unduly limited, that reviewers are not kept in the dark and that all parts of the UK are covered by the same standards of transparency. In short, these amendments would close the gaps that could otherwise turn an accountability provision into an optional exercise. I hope the Minister will reflect carefully on their intent and consider how they might help deliver a stronger, fairer and more credible oversight process. I beg to move.
Lord Vaux of Harrowden (CB)
My Lords, I rise briefly to add my support to the first two amendments in this group. While I agree with removing the discretion of the Secretary of State, Amendment 99A does not say what the period of the review should be. I suggest that it should be the same as the period of the review for the eligibility verification notices, which is annual, and that that is what should be in the Bill. It would be useful to hear from the Minister what the Government are proposing in that respect.
Lord Palmer of Childs Hill (LD)
My Lords, as we consider Amendments 99A, 99B and 99C, spoken to by the noble Baroness, Lady Finn, it is clear that these proposals are focused on the mechanisms of independent review and oversight within the Bill. Amendment 99A would ensure that the Secretary of State cannot limit the independent person’s review to only certain timeframes, thereby supporting the principle of comprehensive and impartial scrutiny. Amendment 99B would require the Secretary of State to provide information to the independent person for the purposes of a review, which could strengthen the independence and effectiveness of the review process. Amendment 99C would compel the Secretary of State to appoint independent reviewers not just in England but also in Wales and Scotland, ensuring a degree of consistency and regional representation in oversight arrangements.
These amendments appear to reinforce the Bill’s commitment to robust oversight and transparency, aligning with the existing provisions for independent inspection and review already outlined in the legislation. At the same time, it will be important to consider whether these changes might introduce additional administrative complexity or affect the flexibility of the Secretary of State to respond to evolving circumstances. As ever, the challenge is to strike the right balance between effective oversight and operational efficiency. I look forward to hearing the views of the noble Baroness, Lady Sherlock, on whether these proposals best serve the aims of accountability and good governance within the framework of this Bill. It is amazing what changing the word from “may” to “must” can do, but it can make a big difference and I wait to hear the Minister’s reply.
Baroness Sherlock (Lab)
My Lords, I am grateful for the contributions to this short debate. I hope that I can answer the questions that have been raised.
The first and most important piece of information is to remind the Committee that in the Commons my honourable friend the Minister for Transformation made it clear that His Majesty’s Inspectorate of Constabulary and Fire and Rescue Services will be commissioned to inspect the DWP’s criminal investigation powers for England and Wales and HMICS for Scotland. I hope that that is helpful. I can reassure the noble Baroness, Lady Finn, that the reason why we chose HMIC is that for more than 160 years it has been carrying out independent scrutiny of law enforcement in England and Wales, including the police. There is no danger whatever that it will be any kind of box-ticking exercise, if HMIC is doing it. I am sure that she can be reassured on that front.
I hope that that shows the level of commitment that we have to the level of scrutiny. If we want to do it properly, HMIC is the body to scrutinise powers of this seriousness. But we have worked closely with HMICFRS and HMICS. We intend to operate in the same way as other law enforcement agencies that are subject to inspections by those bodies. What will happen is that, prior to each inspection, the DWP and the inspectorate body will mutually agree the period that the inspection will cover. That is to make sure that the inspection can cover all necessary activity that has been undertaken, which is a common way of operating. We have no reason to believe that it will not operate well in this case.
We understand that sharing information is essential and will obviously not seek to misrepresent or hold back any relevant information. The legislation as drafted allows us to share all relevant information. But it is essential that the Secretary of State retains discretion—for example, being able to choose not to provide information that may be particularly sensitive and where sharing it could have a detrimental impact, such as on the outcome of an active case. The DWP will fully support and co-operate with the inspection bodies and its reports will make clear if we did not do that. But we want to do so, to make sure that we can deliver on these powers to the right standard.
I am grateful to the noble Lord, Lord Vaux, for answering one question for me. There will indeed be inspectorates. HMICFRS will cover England and Wales and HMIC will cover Scotland to enable us to have a different reviewer in the two places. I hope that, given those reassurances, the noble Baroness, Lady Finn, will not press her amendments.
Baroness Finn (Con)
My Lords, I thank the Minister for her reply. As we draw this debate to a close, I return to the fact that these amendments are rooted in the core values of fairness, transparency, independence and accountability. I thank the noble Lords, Lord Vaux and Lord Palmer, for their support, although I know that the noble Lord, Lord Vaux, has not supported Amendment 99C.
The independent review mechanism outlined in Clause 88 should be one of the central safeguards of the Bill. It should ensure that the powers conferred are used proportionately, effectively and in the public interest. As it currently stands, that mechanism risks being weakened by loopholes and discretionary clauses that leave too much power in ministerial hands. I note the response about HMIC, but it still goes to the core that we want this Bill as a standalone and that those loopholes are necessarily closed.
Amendment 99A speaks to a fundamental concern: the right of the Government to define the terms of their own scrutiny. That is not a mark of confident democracy. A review that can only examine certain timeframes selected by the very people being reviewed is not a genuine safeguard; it is a managed narrative. True independence means giving the reviewer the authority to follow the evidence wherever it leads, not wherever the Secretary of State allows.
Amendment 99B is in many ways even more foundational. What is the value of appointing an independent person if that individual can be denied access to the very information that they need to do their job? We cannot have effective oversight if it depends on the good will of the department being examined. I take note of what the noble Lord, Lord Palmer, said. There is a huge difference, as I know well from my own time in government, between the words “may” and “must”. “Must” is a minimal expectation if we are to uphold the principles of openness and integrity. Anything less risks turning independence into theatre and accountability into a form without substance.
Amendment 99C is about consistency. I appreciate that the noble Lord, Lord Vaux, considers it unnecessary. However, if fraud knows no borders between England, Wales and Scotland, neither should scrutiny. We cannot rely only on the Secretary of State’s discretion to decide whether an independent review happens in one nation but not another, because that creates potential confusion and disparity and the appearance, if not the reality, of selective transparency. This is a probing amendment and I appreciate what has been said, which I will pick up on later. What we are aiming for is a duty to appoint independent reviewers across the devolved nations so that trust is not patchy but uniform across the United Kingdom.
When taken together, these amendments must represent a clear and coherent vision that government power must be matched by government accountability. That review must be more than just process. It must be meaningful, showing that we do not fear scrutiny but welcome it, because it is through scrutiny that public trust is earned and retained. The Government have rightly set out to tackle fraud and protect public money, but if the public are to believe that this effort is both rigorous and fair, the checks that we place on those powers must be equally robust. These amendments deliver that balance, not to obstruct but to uphold the values that any confident, responsible Government should share. I urge the Minister to consider the purpose and principle that these amendments seek to preserve. Let us not pass up the opportunity to make this legislation stronger, fairer and more trustworthy. I beg leave to withdraw the amendment.
“Consideration of vulnerabilities(1) The Secretary of State must have due regard for the external circumstances pertaining to a person under investigation in respect of the mental capacity, economic circumstances, and physical and mental health of the claimant, particularly where the claimant is or may reasonably be considered a vulnerable person.(2) For the purposes of this section, a "vulnerable person" includes, but is not limited to, individuals who—(a) lacks mental capacity within the meaning of the Mental Capacity Act 2005;(b) are in receipt of, or have been assessed as eligible for, support relating to mental or physical health conditions;(c) could be reasonably regarded as vulnerable to domestic abuse or coercion.(3) The Secretary of State shall ensure that a fair and reasonable assessment of the claimant's circumstances is conducted before any deduction is applied.(4) The assessment under subsection (3) may consider evidence provided on behalf of the claimant, including medical reports, financial information, and input from authorised support workers or representatives.(5) All decisions to deduct welfare payments shall be documented, with explicit reference to how the claimant’s vulnerability was considered. (6) The records under subsection (5) shall be made available to the claimant upon request and subject to audit by an independent body.”Member’s explanatory statement
This new clause would ensure that, before a deduction was applied, due regard was given to the wider circumstances and vulnerabilities of the liable person, which they would have to document, to be made available upon request by the claimant.
Viscount Younger of Leckie (Con)
My Lords, Amendments 99D and 109ZA are in my name. Amendment 99D seeks to ensure that, before a deduction order is applied, proper and fair consideration is given to the wider circumstances of the person under investigation, especially where there may be indicators of vulnerability. It is an amendment rooted not in obstruction but in principle and in pragmatism. It recognises that, if we are to give public authorities powerful tools to detect and recover fraud, we must also ensure that those powers are exercised with fairness and, crucially, the full understanding of the person’s situation.
Many individuals who fall under investigation may be living with complex challenges. I know that we touched on these matters earlier in Committee, but some of these issues are worth repeating. Some individuals may lack the mental capacity to understand what is being asked of them; others may be suffering from physical or mental health conditions that impair their ability to manage forms, deadlines or correspondence; and still others may be experiencing domestic abuse, coercion or forms of control that make it difficult or even impossible for them to make independent financial decisions. These people do not, certainly as yet, have a deputy, proxy or power of attorney in support. They remain in sole charge of their accounts.
I am sure that noble Lords across the Committee would welcome reassurance from the Government, first, on how these people will be identified and, secondly, how the system and process will cope and adapt to reflect their needs and, where needed, to protect them. These are not on-the-edge cases; they are realities that front-line officials in the department and around the country encounter every day. If we are not careful, precisely these individuals may end up most at risk of enforcement action—not because they are wilfully defrauding the system but because they simply did not or could not understand what was expected of them.
We must therefore be careful to differentiate error from intent to defraud. There will be cases where a person under investigation may not have understood what he or she was supposed to be doing but is technically fraudulent. This is exactly what this amendment seeks: it would require that the Secretary of State has due regard to the mental capacity, economic circumstances and health of the claimant, especially where there are indicators of vulnerability. It would also ensure that a fair and reasonable assessment of the person’s circumstances is conducted before any deduction is applied. I should say that this is not about softening our stance on fraud; it is simply about targeting it accurately and responsibly.
The amendment also places emphasis on the evidentiary basis of decisions. It allows for medical reports, financial statements and input from support workers or advocates to be taken into account. Importantly, it also creates a clear paper trail by requiring that decisions to deduct are documented with reference to how the claimant’s vulnerabilities were considered. That documentation must be made available upon request and be subject to independent audit. I argue that this is important and not a form of bureaucracy—before noble Lords get up.
So we come back to understanding how the test-and-learn operation and exercises will take account of this. Could the Minister give us some detail on how such cases will be identified and on the other questions that I asked earlier? I also ask her to help the Committee to understand what the Government will access in terms of information relating to these wider circumstances. We see it as vital that this information is taken into consideration.
At this stage of the Bill, it is also right that we ask what kinds of protections the Government intend to put in place for vulnerable people generally. This extends to the Cabinet Office aspects of the Bill. I realise that my noble friend Lady Finn may have raised these questions earlier, but what process will be followed to ensure that mental capacity is assessed? What training will investigators have to recognise signs of coercion or distress, and what mechanisms will be available to review decisions, particularly where someone’s vulnerability has been overlooked? These are not academic questions; they go to the heart of what kind of enforcement regime we are creating and how confident the public can be that it will act justly, especially where people are least able to defend themselves.
I turn to Amendment 109ZA. It is well established that the Government themselves recognise that disabled people face higher living costs than their non-disabled counterparts. We have had many debates in the Chamber that have highlighted these issues. We know that these costs are not optional; they are the result of essential needs—specialised equipment, personal care and accessible transport—and higher utility bills, among other things.
Baroness Fox of Buckley (Non-Afl)
My Lords, I warmly welcome these amendments in the name of the noble Viscount, Lord Younger. I appreciated the detail that he went into because it is important that we remember that these direct deduction orders are real instruments of power. I am interested in how they will be used differentially, because I do not want them to be a blunt instrument. Therefore, it is worth remembering and considering those who might be on the receiving end of them.
In an earlier group discussing search and seizure, I had been considering speaking but was in some ways put off, because I thought that the search and seizure measures were only meant for organised criminal gangs. As was pointed out, if that was in the Bill maybe it would be more reassuring. It is difficult to know how many people will be affected by the same powers. We want to differentiate, surely, between the vulnerable and an organised criminal gang. There are those who are technically fraudulent, but it is because they have made a mistake, and so on.
I particularly thought of that because I listened to a vivid documentary recently about bailiffs and people who had got themselves into all sorts of distress and debt, with bailiffs kicking down their doors. I had that caricature in my head, and I do not want that to happen to those people. I am not suggesting the search and seizure measures will lead in that direction, but we should always think: who is on the receiving end of these powers? How did they get into that situation? How does the Bill make a distinction so that we do not, on the one hand, have a one-size-fits-all approach? On the other hand—this is a slight anxiety I have— I do not want us to simply get into a situation where we are saying that, because people are on welfare, they are vulnerable. That is equally a caricature, and I do not think it is helpful for us to see people always in a victim role.
I would be interested—that is why I welcome this group—in making the distinctions and learning how the Minister envisages us making the distinctions between the multitude of people on welfare when these powers, which are quite severe in many instances, are going to be applied. How will that happen? Who makes the decision? I think that is why these amendments are very useful.
Lord Palmer of Childs Hill (LD)
My Lords, I am pleased in this instance to express my strong support for Amendments 99D and Amendment 109ZA, tabled by the noble Viscount, Lord Younger, and the noble Baroness, Lady Finn. I have not been quite so firm in my support for others, but Amendment 99D would ensure that, before any deduction is applied to recover debt overpayment, due regard is given to the wider circumstances and vulnerabilities of the liable person. There would be a requirement for this assessment to be documented and available to the claimant on request.
This is a vital safeguard that would place fairness and compassion at the heart of the debt recovery process, ensuring that individuals are not pushed into hardship without a proper understanding of their personal situation. It aligns with my and my party’s commitment to a welfare system that is both effective and humane, recognising that people’s circumstances can be complex—gosh, they certainly can be—and that a one-size-fits-all approach to debt recovery is neither just nor practical.
Amendment 109ZA—we have a wonderful numbering system—would further strengthen these protections by requiring the Minister to consider the additional costs of living with a disability before making a direct deduction order. This would be an essential step in ensuring that disabled people, who often face higher living expenses, are not disproportionately affected by debt recovery measures. Both amendments reflect the principles of proportionality and sensitivity that should underpin all government action in this area. They represent a significant improvement to the Bill’s framework for tackling fraud and error while safeguarding the dignity and well-being of the most vulnerable.
Unlike the noble Baroness, Lady Fox, who said she was a bit hesitant on this, I urge the Committee and the Minister to support these amendments, which would ensure that the pursuit of public funds is always balanced with compassion and respect for individual circumstances. At this stage of the Bill, as mentioned by the noble Viscount, these measures need to be introduced so that we can perhaps on Report include them in the Bill.
Baroness Sherlock (Lab)
My Lords, I am grateful to the noble Viscount for his amendments and to all noble Lords who have spoken. We all want to ensure that, when someone who is subject to these debt recovery powers is vulnerable, we are aware of that and take appropriate steps to treat them as we should. Before I turn to the individual amendments, I shall recap on how direct deduction orders will operate and what safeguards are there, as this is relevant to the debate.
These powers are vital to recovering funds that are owed by debtors who are—just to remind the Committee—by definition not on benefits or PAYE. If they were, we would have other ways to deal with them. These are people who have some other source of income, owe the DWP money and have simply refused to engage with us at all, at any stage. That does not mean that none of them is vulnerable—of course, they may be—but this is the category of people that we are talking about. The department has long-standing powers to recover public money that has been wrongly paid in excess of entitlement, through deductions from benefits or earnings, but not for those in that category.
There are important new safeguards for these powers. They are there only as a last resort. First, before they can be used, multiple attempts at contact must be made, of different types. We must make at least four attempts to contact someone, at least twice by letter. We not simply trying once and giving up. We must have really tried to engage with people who simply do not engage with us all.
Secondly, when a direct deduction order is necessary, the DWP must be satisfied that any deduction, whether a lump sum or a regular deduction, will not cause the debtor, other account holder or their dependants hardship in meeting ordinary living expenses. That means that, legally, the DWP must ensure that there is enough money remaining in an account after a lump sum deduction to allow the debtor to meet their essential living needs.
In response to the noble Viscount, deductions must be fair in all the circumstances. This would include consideration of any vulnerabilities or additional costs related to living with a disability. The noble Viscount helpfully outlined what some of those will be. The point is that they must be particular to the individual. Each individual’s circumstances will be different. As the noble Baroness, Lady Fox, pointed out, not everybody who is poor is vulnerable, not everybody who is on benefits is vulnerable and not everybody who is disabled is vulnerable, necessarily. We need to understand their circumstances to know what is fair and ensure that they will not be pushed into hardship by a deduction.
Thirdly, to ensure that the deduction is made in that way, the amounts will be decided following an affordability assessment based on information shared by the debtor’s bank and any subsequent representations made by the individual or their representative if they need someone to speak for them. Legislation sets out the maximum amounts that can be deducted for regular deduction orders.
Fourthly, the Secretary of State can vary or revoke direct deduction orders in the light of a change of circumstances—for example, if the debtor had a change of income, made a new claim to benefit or something else of significance happened. Fifthly, when a direct deduction order is made, notice must be given to the bank and all holders of the account in question. If an order is still upheld after a review, or after considering information that has been presented, an individual who is not happy with that has a right of appeal to the First-tier Tribunal.
Finally, I remind the Committee that a code of practice for the new powers has been made available for noble Lords to review. This sets out revised guidance on ways to identify and support those who are vulnerable. Ahead of public consultation, our team continues to work on the code collaboratively with key stakeholders, including charities such as Surviving Economic Abuse and the Money and Pensions Service. These are important safeguards which I hope will alleviate noble Lords’ concerns.
On Amendments 99D and 109ZA, it is worth looking at what these amendments would do in practice. While we all share the desire to protect vulnerable groups, these amendments would place additional legal duties on the DWP to consider the impact of any vulnerabilities that a debtor may have, even when it could not be reasonably possible for the DWP to know. These requirements would be imposed without providing any new ways for the DWP to obtain that information.
As I have said, the direct deduction order power is one of last resort, aimed at those who are not on benefits or in PAYE employment, where all reasonable attempts to engage with the individual have failed. These are individuals who have not responded to repeated contact from the DWP’s debt management officials about their debt. In the absence of meaningful engagement from the debtor or their representative, the DWP will not be aware of their current personal circumstances. This puts the DWP in a difficult, if not impossible position, regarding the obligations that the proposed amendments would impose.
However, we need safeguards. The new safeguards that are introduced in this Bill, which I outlined at the start of my speech, alongside the existing safeguards and departmental processes for supporting those who are vulnerable, reflect a better approach to protecting vulnerable people. I shall now set out some of those existing safeguards and processes that are outside of this Bill, for the record.
Layers of support already exist within the DWP to support those who are vulnerable or have complex needs. They include proactive vulnerability checks at different points in the customer journey, and where vulnerable individuals are identified, to ensure that the necessary support and adjustments are put in place. Where any additional support or adjustments are identified by a DWP official or are disclosed by the individual, they are recorded on DWP systems to ensure that all officials know how best to support them.
Viscount Younger of Leckie (Con)
My Lords, I am very grateful for the thoughtful and supportive contributions from the noble Baroness, Lady Fox, and the noble Lord, Lord Palmer, which we have heard throughout this debate. As it draws to a close, I want to return to the fundamental values that underpin Amendments 99D and 109ZA.
I will not repeat everything I said before but, briefly, these amendments are not about hampering fraud enforcement but about ensuring that where serious powers are granted—powers that allow the state to intervene directly in someone’s financial life—they are exercised with the kind of care, discretion and humanity that should be the hallmark of any public authority in a just society.
Amendment 99D asks a simple but fundamental question: how do we treat those whose circumstances may mean that they did not or could not understand or apply the rules? As the Minister herself said, rightly, we all want the same thing. Fraud must be pursued, but, as the noble Baroness, Lady Fox, alluded to, we must not collapse the distinction between error and intent, between misunderstanding and malice. The law and those who enforce it must have the tools to see the difference.
Amendment 109ZA builds on this principle of proportionality; it addresses a reality that we all know—that disabled people may face higher costs of living by virtue of their condition. As I said earlier, the direct deduction order, if applied too bluntly, can turn an already stretched household into one facing crisis, and we must ensure that these powers are used with sensitivity. This is exactly what my Amendment 109ZA provides: a measured and sensible requirement.
I appreciate the very sensible explanations that the Minister produced. I appreciate what she said and the fullness of her remarks. I shall make sure that I read all her remarks in Hansard to see whether they satisfy the concerns expressed in the amendments that I have tabled. I appreciate the fullness of what she has produced. Both these amendments provide something important. They place a protective guardrail on otherwise broad and serious enforcement powers. They ask us to apply judgment, not just rules, and to recognise vulnerability and not just liability. Separately, I also appreciate the safeguards that the Minister spelled out towards the end of her remarks.
Broadly, people will support fraud enforcement when they believe it is fair, and they will support recovery powers when they trust that those powers will not be used to punish the vulnerable alongside the guilty. This is where the balance needs to be struck.
I shall also look at Hansard because the Minister gave us a helpful explanation in terms of the balance required in the obligations placed on the DWP, and at whether in fact my amendments are too onerous or a bit overreaching. I would like to reflect on those questions. We may come back on Report with something, or we may not. In the meantime, I beg leave to withdraw the amendment.
Baroness Sherlock
“(i) the period mentioned in section 71ZK(6)(a) for P to appeal against the outcome of the review has passed without P bringing an appeal, or”Member’s explanatory statement
This amendment is consequential on my amendment to clause 89, page 56, line 31.
(a) the period of one month beginning with the day after the day on which P is notified of the outcome of the review, or(b) such longer period (if any) as the Tribunal considers reasonable in all the circumstances.”Member’s explanatory statement
This amendment means that the tribunal can extend the time limit for bringing an appeal in relation to an overpayment notice.
Baroness Fox of Buckley
Member’s explanatory statement
This amendment removes the power of the Secretary of State to make direct deduction orders and instead provides for direct deduction orders to be made only by a court following an application by the Secretary of State to the court.
Baroness Fox of Buckley (Non-Afl)
My Lords, in moving Amendment 102, I shall speak also to Amendment 122. I thank the noble Lord, Lord Palmer of Childs Hill, for putting his name to these amendments.
These amendments are similar to those that I tabled in an earlier group in relation to Part 1. In this instance, they focus on removing the power of the Secretary of State to make direct deduction orders and instead suggests that DDOs be made only by the relevant court following an application from the Secretary of State.
Throughout Committee, the noble Lord, Lord Vaux, has helpfully stressed that, when we are having this discussion, particularly in this environment, it is very difficult to imagine a Minister other than the noble Baroness, Lady Sherlock, who I do not think of as a malign person. In this instance, this is not helpful, because as a Committee we must always take a decision based on what we think could happen in future—what powers are being created—and therefore we bring to bear as much as we can the safeguards as a Committee.
I think that we can all agree, and we keep saying this, that it is important to note that the powers are in pursuit of a legitimate aim: here, to reclaim overpayment of money paid to welfare claimants. Following the previous group, we should not say that a welfare claimant, if they have defrauded the state, should be treated with kid gloves—I am not suggesting that. But whenever new state powers over the individual are created, a legitimate aim is not enough to mean that we should not have a more granular probing of the powers that have been created, which is why we as a Committee need to insist that powers are tightly drawn to guard against arbitrariness and limited to what is necessary and proportionate. When the Government award themselves powers, as they do in this part of the Bill, to intrude on the privacy of anyone’s bank account, check on its contents and remove money, there needs to be a strong legal justification. As yet, I am not convinced that we should not make it the job of the courts to best determine and assess when this is appropriate.
In an earlier group, on search and seizure powers, the Minister reassured the Committee that we do not need to worry because this would happen only with court approval. I am suggesting that we might need court approval here. The DWP characterises DDOs as a power of last resort, which can be exercised only when the Secretary of State has given the debtor a reasonable opportunity to settle the debt and notified them of the possible use of the powers. I felt that the Minister’s helpful explanation earlier really brought this to life.
On the other hand, there is no definition in the Bill of what, for example, a reasonable opportunity threshold might be. Ironically, one of the safeguards presented by the DWP is a check on affordability, in terms of fairness. This takes the form of account information notices. I know that we will have a number of amendments on that issue, but I want to dwell on this now, because these safeguards are one of the most egregious aspects of the Bill. To consider whether the debtor can afford to have funds deducted before the Secretary of State makes a DDO, page 105 of the Bill tells us that
“the Secretary of State must obtain and consider bank statements for the account covering a period of at least three months”.
One requirement of the account information notices is that the bank must not notify the account holder—or anyone associated with them, for that matter. Surely this, as I have mentioned in previous contexts, puts the bank in an invidious position of being compelled to breach any professional confidentiality that it owes its customer, even if its customer is a debtor, based on the word of the Government telling it that the account holder owes the DWP money. Compelling banks to hand over bank statements secretly, however benign the motives in relation to affordability checks—all without any external oversight, such as judicial authority —needs to be probed in terms of its efficacy and ethics, which is what these amendments try to do.
Before issuing a DDO, the Secretary of State must give the debtor and any joint account holder notice of the proposed order and invite them to make representations, as the Minister explained earlier. On the basis of these representations, the Secretary of State will decide whether and on what terms to make the DDO, and may do so only if satisfied from bank statements and representations that the order is fair and that the liable person, the account holder and their dependants will not
“suffer hardship in meeting essential living expenses”.
That sounds so reasonable but, in reality, it hands extraordinary discretion to the Secretary of State, as there is no threshold to determine what constitutes hardship or essential living expenses. I am sure that, if we went around the Room, we would have various versions of what we need to live on and would argue over it. Who decides what is fair in this instance? I suggest that at least having an external court look at this would be more appropriate.
Perhaps we would put such qualms aside, if these powers applied only to overpayments caused by deliberately fraudulent behaviour. I can see why going hard on fraudsters might be popular, but these powers to seize funds directly from bank accounts without judicial scrutiny will also apply to individuals who have been overpaid as a result of making a mistake when filling out one of those notoriously complex claim forms, who have failed to update a change in their circumstances, or who may just be struggling to navigate the system in general. Such errors—that is what they are—account for almost a quarter of overpayments. They include errors caused by the DWP’s own actions, as the carer’s allowance scandal revealed, but it is the likes of unwitting carers who will be on the receiving end of these powers, yet the negligent DWP staff who made the mistakes are nowhere caught by the powers that we are discussing.
I say this not to have a go at the staff, in that instance, but to note, as we have talked about previously, that we do not need a one-size-fits-all situation. That was the point that the noble Lord, Lord Palmer, made and it is very important. All sorts of people will be caught up—people making mistakes, vulnerable people and some fraudsters—but they will all be treated the same.
Baroness Bennett of Manor Castle (GP)
My Lords, I rise briefly to support the amendments so powerfully, and with considerable detail, explained by the noble Baroness, Lady Fox of Buckley. I want to cross-reference a couple of things. I was unable to be here for the whole discussion on the last group in this Committee but I came in and heard the Minister reassuring us that there are layers of support in the DWP for identifying the vulnerable and that there is regular vulnerability training.
I have to contrast that with one of my last contributions in this Committee and this Room, talking about the horrendous case of Nicola Green. I try to share as much as I can of what I am doing in the Chamber so that it is available to the world. I have to say that the little parliamentary video of that exchange, with its less-than-ideal lighting—no offence to anyone who is doing their best they can with the television—has, you could reasonably say, gone viral, because there is a flood of comments of people saying what the DWP has done to them. I cannot attest, of course, to the truth of every one of those comments, but there is a profound problem of trust with the DWP.
I fully acknowledge that the Minister, when she was on the Opposition benches, and I have often spoken out strongly on this matter. The Government actually called an inquiry into the DWP’s treatment of disabled people after the EHRC expressed concern that equality had been breached. That is the context in which we are looking at these amendments.
The noble Baroness is calling for people to have a day in court—to be able to have a genuinely independent voice in our greatly respected courts and put the case. If they indeed have committed fraud and can afford the repayments, or it is not a complete error by the DWP, or the DWP is at fault or is not being realistic about how much people need to eat and live, the court will make a ruling. That, surely, is regarded as a basic principle and right in our law.
Lord Vaux of Harrowden (CB)
My Lords, I will speak briefly to Amendments 102 and 122, which would require the Secretary of State to apply to the court for a direct deduction order—a DDO. I confess that I am struggling a bit to understand the circumstances in which the Secretary of State would be able to make a direct deduction order, as the Bill is drafted. I hope the Minister will be able to help me.
When we discussed the DDOs in relation to Part 1 of the Bill, the noble Baroness, Lady Anderson, correctly pointed out that a direct deduction order could be made only in circumstances where either there had been a final determination of the amount of the liability by a court or the person concerned had agreed that the amount was payable. I agreed then that that was an important safeguard, as it is a significant restriction on when the DDO process could be used under Part 1. I asked why, if the court was making the determination of liability, we did not just leave the court to determine the way in which it should be repaid, rather than requiring new powers for the Minister to make that decision. The noble Baroness was kind enough to offer to write to me on that, and I very much look forward to receiving her letter.
However, I think the same issue may arise here, except that I am struggling to find the definition of the amount recoverable described in paragraph 1(1) of new Schedule 3ZA, inserted by Schedule 5 to the Bill. Can the Minister please explain how the amount recoverable is determined, and by whom? Does this part have the same safeguard as Part 1, which is either final court determination or agreement by the person concerned, or is it at the discretion of the Secretary of State? I can see, in Clause 89, that the person must have been convicted of an offence or agreed to pay a penalty. That raises the question: does this DDO regime apply in cases or error, or not? Presumably, in cases of error there will not be a conviction or a penalty, so it does not apply in the case of error, but I am confused.
I cannot find anywhere the amount being determined by a court; that is where I am struggling a bit. If the recoverable amount has not been decided by the court, then the amendment in the name of the noble Baroness, Lady Fox, is likely to be necessary. That is particularly important because, just as it does in Part 1, for understandable reasons, the appeal process to the First-tier Tribunal against a DDO prevents a person appealing with respect to the amount that is recoverable. If that is the case, and the amount recoverable has not been determined by a court, I think there is an issue here.
Lord Palmer of Childs Hill (LD)
My Lords, I am proud to support Amendments 102 and 122, which I tabled alongside the noble Baroness, Lady Fox of Buckley. Amendment 102 proposes that the power to make direct deduction orders should rest with the courts following an application from the Secretary of State, rather than allowing the Secretary of State to impose such orders directly. This change would introduce an important layer of judicial oversight, ensuring that deductions from individuals’ bank accounts are made only after careful, independent consideration of the evidence and the circumstances.
Although the Bill includes safeguards such as affordability and vulnerability checks, as enumerated by the Minister, and rights to representation and appeal, placing the final decision in the hands of the court would further strengthen public confidence in the fairness and proportionality of the debt recovery process. Amendment 122 is consequential on this approach, ensuring consistency throughout the Bill. By requiring court approval for direct deduction orders, we uphold the principle that significant intrusions into personal finances should be subject to the highest standards of scrutiny and due process. This is particularly important given the potential for hardship and complexities that can arise in cases involving joint accounts or vulnerable individuals. I hope the Minister can address that when she replies.
These amendments do not seek to undermine the Government’s legitimate efforts to recover public funds lost to fraud or error but rather to ensure that such efforts are always balanced with robust protections for individual rights. I urge fellow noble Lords to support these amendments as a constructive step towards a more transparent and accountable system, and I am very pleased to have signed this amendment in the name of the noble Baroness, Lady Fox.
Viscount Younger of Leckie (Con)
My Lords, I have a degree of sympathy for the amendment in the name of the noble Baroness, Lady Fox, and the noble Lord, Lord Palmer of Childs Hill. It touches on a value that I know many of us across this House instinctively support: namely, that powers which interfere with the person’s finances should be subject to proper oversight and scrutiny—in other words, by a court and not by a politician. Let us start with that.
The principle underpinning the amendment is sound. When the state seeks to impose a direct deduction from an individual’s account, that is no small matter. It affects not just policy outcomes but people’s daily lives, and we should never lose sight of that. Much was spoken about that in earlier groups. I am sure that the noble Baroness, Lady Fox, and the noble Lord, Lord Palmer, have suggested introducing a requirement for the court to authorise such a deduction because it reflects the gravity of that particular action.
However—there is a however—although I support the sentiment, I have reservations about the practicality, and I am afraid that the remarks from the noble Baroness, Lady Bennett, have increased my concerns. Requiring every direct deduction order to go through the courts will prove burdensome to the judicial system and may risk making this part of the regime so slow and administratively heavy that it becomes inoperable in practice. That would not only undermine the Government’s legitimate aim of tackling fraud effectively and speedily, but could also result in delays and uncertainty for claimants and public authorities alike. Just to be helpful to the Minister, can she enlighten us on the current state of the backlog in the courts—which is a message she might expect me to give—and how, therefore, Amendment 102, for example, might not be helpful to the process?
I have another question about an appeals process. Everyone, I believe, has the right to an appeal, but how would this work, given the status of the courts? That is a question for the Minister to ponder over. We are, after all, talking about a mechanism intended to recover public money in a targeted and efficient way. If every deduction, regardless of scale or complexity, must first pass through court proceedings, we risk erecting a barrier that stifles the entire process. There must surely be a way of reconciling the desire for oversight with the need for operational efficiency—a challenge that I lay down to the noble Baroness, the Minister.
So, while I cannot support the amendment as currently drafted, I agree that the principle of independent oversight should not be overlooked. There may be better ways of embedding that principle in the system through enhanced safeguards; clearer audit mechanisms; greater efficiency and speed—that is, in expediting the DDOs; and improving transparency around how deduction decisions are made and reviewed.
I recognise this from all who have spoken, and I have listened carefully to all the speeches. I believe that these amendments, and particularly Amendment 102, starts a valuable conversation; even if its solution is not quite the right one, its motivation certainly is. I hope that the Minister can reassure the Committee that the Government recognise the need for these powers to be exercised responsibly but also sensibly so that they can operate effectively, and that they are open to exploring proportionate mechanisms of accountability that simply do not grind the system to a halt, and if so—a very simple question to end on: what could this system be?
Baroness Sherlock (Lab)
My Lords, I am grateful for some really good questions. These are exactly the kind of questions the Lords Committee should be asking on these sorts of issues, and I hope to give decent answers.
Should I ever get round to writing a book, somewhere in the credits it will say “Definitely not a malign person”. I am very grateful to the noble Baroness for that. It is the best compliment I am going to have today —you have to take them where you can find them in this business—so I thank her very much.
Amendments 102 and 122, as we have heard, want to restrict the use of the direct deduction power to circumstances where a court has determined it necessary and appropriate. I thought the noble Baroness, Lady Fox, made her argument very clearly; I hope to try and persuade her that she does not need to press these amendments because I think we have a good case on this.
Lord Vaux of Harrowden (CB)
The noble Baroness has not answered one question that I had. My understanding from Clause 89 is that these DDO rights—or however one describes them—can be used only where a person is convicted of an offence under this Act or any other enactment, or agrees to pay a penalty under Section 115A of the 1992 Act. Does that mean, therefore, that this does not apply to situations of error and that it is only fraud?
Baroness Sherlock (Lab)
I apologise; I forgot to answer that. No, it does not. These measures apply to any kind of overpayment but, as I described, they are only matters of last resort. We have to have gone through all the other possibilities and people must simply have failed to engage. So this really will happen only if somebody is absolutely not engaged with us at all. As is the case with deductions from benefits or deductions from earnings, they are available as a tool for overpayments, whether or not they will be used.
Baroness Fox of Buckley (Non-Afl)
I thank the noble Lords who spoke on these amendments for appreciating—even if they did not support—the spirit of what they are trying to do. Despite that, I do actually want to do this rather than just wanting the spirit. But I know that the noble Viscount, Lord Younger, feels that it will not work practically. But we have had a slightly contradictory answer there, because they are either absolutely the last resort and will hardly ever be used—in which case they will not clog up the court system, to be fair—or they will be used a lot more, which means that there is all the more reason for them to go through the courts, if they will be used liberally from the point of view of a safeguard. So I did get confused about that.
Some thoughtful points were made. The noble Lord, Lord Vaux, usefully probed the Minister—in a way that I was not able to—on exactly when and in what circumstances. These questions about the distinction between error and where the overpayment came from matter in relation to the powers that have been created.
Baroness Sherlock (Lab)
I am sorry to interrupt—I never get to say that anymore. I thought it might be helpful for the Committee if I clarified. The noble Lord, Lord Vaux, referred to Clause 89; that actually refers to administrative penalties and recovery for non-benefit payments, not for benefit payments. I should have made that clear. I am sorry to interrupt the noble Baroness, Lady Fox, in full flow—please carry on.
Baroness Fox of Buckley (Non-Afl)
It is very helpful for these things to be clarified. As noble Lords can see every time we are in Committee, I have so many pieces of paper, so I appreciate that and am not saying that I am on top of all the detail.
However, I think it is important, in the spirit of the way that the noble Lord, Lord Palmer, was motivated to support these amendments, that this is not just about the detail; there is an important principle here. I really liked the viral film mentioned by the noble Baroness, Lady Bennett of Manor Castle, because people do care about this Bill and what its impact will be, and we have to be able to answer all the questions as the legislators who are debating it. People know that we are involved in this, and I sometimes feel that it is unclear exactly what will be acquired by all these powers.
The problem with saying that these powers will hardly ever be used is that these powers are going in the statute book, so they can be used. I am not going to talk about bank statements again, but the reason I raised them on this group is because, before a DDO can be introduced, you have to check bank statements through the mechanism of the affordability checks that we will go on to discuss, and that is a breach of privacy. If we are giving the DWP the power to do this, we need to have a check. The way we have done that historically is to rely on the courts to take money. As this is related, I am trying to see whether this could be a useful check to make sure that these powers are not exploited.
We have plenty of time to go, so I think some of us may come back with a version of this amendment—potentially better worded—when we get to Report. It is not just to fly the flag for civil liberties but, as I think the noble Lord, Lord Palmer, said, a need to have trust in the system. If the Bill is to be taken seriously by people who do not just think that it is draconian and who do not do the caricatures that the Minister wants, it must be watertight in its safeguards and protections, as well as in the powers that it creates. Those two things have to live together; otherwise, it will be discredited before it even hits the statute book.
Viscount Younger of Leckie (Con)
I just want to pick up on something quite interesting that the noble Baroness said, which leads me to ask a question of the Minister. I am not expecting an answer now. It is to do with the capacity or number of cases. I have no idea how many DDO cases could end up going to the courts, but it may be more than the noble Baroness, Lady Fox, thinks. I am just reminded of my experience of the Child Maintenance Service: it looks at those people who we know can pay and who are not paying, and they go all the way to the courts. There are many thousands. I rest my case by saying that there is a danger that the courts could be clogged up, but it would help the Committee to have some idea, perhaps in writing, of the number of cases that would or could go to court as a consequence of these amendments.
Baroness Sherlock (Lab)
I will write to the noble Viscount. As he knows from his experience with the Child Maintenance Service, as each form of enforcement comes into view, more and more people simply pay without it being necessary, so a sort of funnel comes down. If we have any information about scale, I would be happy to write.
Member’s explanatory statement
This will prevent the DWP from being able to compel banks to disclose the bank statements of benefits recipients to decide whether to issue direct deduction powers.
Lord Palmer of Childs Hill (LD)
My Lords, I move Amendment 103 on behalf of my noble friend Lady Kramer, who is in the Chamber. We are all playing ducks and drakes with where we are. The amendment was tabled by my noble friend and the noble Baroness, Lady Bennett of Manor Castle. It would prevent the Department for Work and Pensions from compelling banks to disclose the bank statements of benefit recipients in deciding whether to issue direct deduction orders.
Baroness Bennett of Manor Castle (GP)
My Lords, it is a pleasure to follow the noble Lord, Lord Palmer of Childs Hill, who has clearly and eloquently outlined the reasons for this amendment, which the noble Baroness, Lady Kramer, tabled, and to which I attached my name. The noble Lord talked about the risk of loss of trust in public authorities. We should also look at the other side of this: the loss of trust in banks. People may have heard the acronym GDPR. People might not know all the ins and outs but they think that anything to do with bank accounts is private stuff. They want to trust that if their information is with the bank, it is not going to be handed out to anyone else. We have a situation whereby, although the situation has improved in recent years, still 2.1% of Britons are unbanked. That figure is significantly higher for the under-25s. It is also higher in some regions and nations; for example, Scotland.
We have to think not just about the impact on attitudes towards the DWP. I thank the Minister for acknowledging in her response to my previous contribution that the department has a long way to go. However, bank statements contain all sorts of information beyond what is relevant to anything the DWP knows about. For example, people may find themselves in a difficult situation after a relationship has broken down, and their bank statement may reveal all kinds of things about their personal life that they really do not want anyone else to see. There may be purchases they consider embarrassing. They do not want anyone else to see them. Getting the whole copy of the bank statement is not going to provide just information relevant to what the DWP is doing or not, or any other income and so on. There is going to be a lot of other material as well. As the Bill is currently written, it is disproportionate, as the noble Lord, Lord Palmer, said.
Baroness Fox of Buckley (Non-Afl)
Very briefly, I absolutely support the amendment. I raised some of my concerns when moving my amendment in the previous group. When I heard that bank statements could be requested, I thought it was not true and I kept having to check it. I thought, “This cannot be right”, because throughout the passage of the Bill we have been assured by the Minister, “Oh, no. We do not want any details. We are only going to have the name. There is no surveillance”. I then thought, “Oh my God, they can get the bank accounts of individuals, allegedly to check whether they have enough money in their bank account, saying that they are doing it only because they are being nice to them”.
I am of the generation who think that if you lose your bank account, there is serious jeopardy. In other words, I would never show my bank accounts around. I am paranoid about anyone seeing my bank accounts. I worry about that sort of thing, although it is not that I have anything to hide—just to note. As the noble Baroness, Lady Bennett, indicated, you can find out from people’s bank accounts what their politics are, their trade union affiliations and their sexual preferences —all sorts of things. On the idea that the DWP will not be looking at that but will just be checking how much money you have, it cannot do that. It is essential that we think twice about this.
These account information notices also apply to joint bank accounts. I know that we are going on to discuss joint accounts in a minute, but that means that those pots of intimate, private, sensitive and granular information held within a bank statement can be revealed about individuals who are not on benefits, who are not debtors, who are not involved at all—they simply share a joint account. I would like this removed from the Bill. It is too scary.
Viscount Younger of Leckie (Con)
My Lords, I thank the noble Baronesses, Lady Kramer and Lady Bennett of Manor Castle, for tabling this amendment. I recognise the spirit in which this proposal is made—a desire to ensure that the use of direct deduction powers is subject to proper scrutiny and does not override individual rights without appropriate justification.
However, I must express some serious reservations about the effect that this amendment would have. By removing the ability of the DWP to request relevant bank statement information from financial institutions before issuing a DDO, we risk undermining the very evidential foundation that should underpin the use of this power in the first place. If we are to give Ministers and their departments powers to recover money owed to the public purse—a legitimate policy objective that is supported on all sides of this Committee—we must also ensure that those powers are exercised responsibly and on the basis of proper evidence. Access to account information, under strictly controlled conditions, is part of what makes that possible. Without it, the risk is not simply inefficiency or delay. The greater danger is that deduction decisions could be made with incomplete or inaccurate information, leading to inappropriate enforcement action or simply to missed opportunities to recover legitimately owed funds. Neither outcome would serve the interests of fairness, nor would they deliver good value for public money.
We have heard throughout Committee about the importance of a system that is not only robust but proportionate and just. I entirely agree—as our amendments and interventions thus far have made clear. However, for a system to be proportionate, it must be informed, which requires access to evidence. I reiterate the concerns that we raised on these Benches at Second Reading. Schedule 3B (1)(2) (b)(i) makes it clear that an eligibility verification notice, which would serve to identify or help to identify fraud, can be applied only to the bank account
“into which a specified relevant benefit has been paid”.
As my noble friend Lady Stedman-Scott set out at Second Reading, we are concerned that this creates a substantial loophole which could be exploited by fraudsters who are, as the government amendments have suggested, able to find out whether they are being pursued by the DWP through an information request. This is a real issue. It seems a likely and obvious outcome that such a person could move money between the relevant account and another, held with different bank, to avoid scrutiny.
We submit that for this to be an enforcement regime, there cannot be any loopholes or workarounds which may permit a fraudster to hang on to the money that they have stolen from the taxpayer. As we stated at Second Reading, the Bill as set out suggests that the Government will be tied up in a legal bind, ensuring in statute that they cannot verify or ultimately pursue the recovery of funds that are not held within the account specified. However, with the right safeguards and with responsible communication of information, there is surely a way in which this regime can be constructed that is responsible and fit for purpose.
We believe that the Government must expand their capacity and ability to access further bank accounts held in the name of the relevant person to prevent them simply opening another account and moving money around, which, as the Bill is currently drafted, seems to be a clear and easy way for them to avoid both proper scrutiny and will prevent the money being recovered. Perhaps the Minister will say whether parallels can be drawn with the current system set out between HMRC and the banks for the recovery of tax resulting either from overpayments or tax fraud, which I am sure she will say works. That may be helpful.
Finally, I want to respond briefly to the concerns raised about whether these provisions amount to a snoopers’ charter—a charge that has been raised throughout the passage of the Bill. It is right that we scrutinise the scope of these powers carefully, but it is also important to be clear about what the Bill does and does not do. In our view, the Bill sets out defined and limited circumstances under which verification measures may be used. It cannot be doubted that an informed and fair decision on deduction orders can be reached only if it is grounded in accurate and up-to-date information. I believe that it is for the Government to make it absolutely clear in Committee how these safeguards on process will function in practice and how transparency and accountability will be maintained. I understand the sensitivities involved in accessing bank data. That is why these safeguards and oversight mechanisms are important.
With that, I hope that noble Lords will reflect on whether the amendment achieves that balance, and I look forward to the Minister’s response on how the very valid concerns that it speaks to can be addressed.
Baroness Sherlock (Lab)
My Lords, I am grateful to all noble Lords for their contributions. As we have heard, this amendment would remove the requirement for banks to provide information to the department in response to notices, including bank statements, for the purposes of making a direct deduction order. However, getting this information from banks, including relevant bank statements, is not only instrumental to the effectiveness of the direct deduction power—it is crucial as a necessary and important safeguard to ensure the affordability of deductions, which is why we cannot accept this amendment.
I remind the Committee that the recovery powers proposed under the Bill are ones of last resort. They are for those not in receipt of benefit or in PAYE employment who have other income streams or capital and who repeatedly refuse to engage with the DWP to agree an affordable repayment plan. Without the information shared by the bank, the DWP would have no means to consider the debtor’s financial circumstances and would therefore be prevented from meeting other obligations and vital safeguards in the Bill, such as establishing an affordable deduction rate and avoiding causing hardship.
Put simply, if we do not know how much money someone has, we risk taking more than they can afford to repay at that time. The DWP is working collaboratively with the Money and Pensions Service on “ability to pay” checks, using bank statements and, where possible, the standard financial statement principles, to prevent financial hardship. These checks will consider the debtor’s essential living expenses, such as housing and utilities, and the Bill provides that direct deduction orders must not cause the debtor hardship in meeting these expenses.
Using bank statements in this way allows the deduction to be affordable and fair based on the individual circumstances, rather than a blanket approach of leaving a set amount in the account which, if not set high enough, could prevent the debtor from meeting those essential costs. The information gathered through these notices is proportionate and other provisions in the Bill restrict the use of bank statements obtained under this power. They are solely for the purposes of recovering the money that is owed. I say to the noble Baroness, Lady Fox, that it is a legal requirement not to use the information for any purpose other than debt recovery. That is spelled out in paragraph 3(10) of new Schedule 3ZA, inserted by Schedule 5 of the Bill.
I also remind the noble Baroness that all this can be avoided, including obtaining information from a debtor’s bank, if the individual agrees to get in touch to discuss and agree an appropriate repayment plan. In that case, we will not need bank statements because we can talk to them and ask for appropriate evidence, and they can provide evidence of other kinds, if that is sensible.
I will just pick up on a number of things. We are not interested in looking at what people spend their money on. It is worth reminding the noble Baroness, Lady Fox, and the Committee that we have said different things at different times because there are different measures in the Bill. For the EVM over here, there is no transaction data—absolutely not, under any circumstances—and I say to the noble Viscount, Lord Younger, that we are looking only at the bank account into which we pay benefits. Fresh sentence: over here, the DWP’s debt recovery powers are aimed at different people, who are not on benefits as, by definition, the EVM is only for those on benefits. It is aimed at people who are not in PAYE employment, who owe the department money and who will not engage. If at least four attempts have been made to contact them but they simply have not got in touch, we can start to use the powers. In that case, we do have the power under our debt recovery powers to go to any bank account that they have; we are not limited to the bank account into which we pay benefits. As I have just said, we are not interested in looking at what people spend their money on. The power can be used to recover debt only in cases where somebody is not in receipt of benefits, as I have described.
Lord Palmer of Childs Hill (LD)
I thank the Minister very much for responding in that manner, but it is rather like a court case where they say that the jury should disregard what happened. Once the information is out there, human nature makes it very hard to avoid it. If you are the DWP and you look at a bank account and see something that you should not, it is hard then to ignore it. The nature of man and woman is not to ignore things that they see. I am afraid that that just came to my mind: it is like these television dramas where the barrister or lawyer raises points, and the judge says, “The jury should disregard that”. You cannot disregard what you see in a bank statement even if you decide that you should not really have seen it. This is a very dangerous precedent, and I do not think the Minister is living in the real world.
Baroness Sherlock (Lab)
I just remind the noble Lord that these DWP staff are authorised fraud investigators and they work on our fraud teams. In the nature of their work, as it is for anybody who works in fraud or law enforcement, they will end up seeing information, in the course of an investigation, that is not relevant. If he thinks that that means that that information will necessarily get into the outside world, then I ask him to rethink that. Our staff are professionally trained. They are professionals who operate under professional standards, authorisations and accreditation. They know what their job is. If staff come across information and the law quite clearly says that it may be used for only one purpose, it will be used for only that purpose.
Lord Palmer of Childs Hill (LD)
I am sorry, but this does not take account of rogue members of the DWP. I am sure that 99.99% are exactly as the Minister says, but the idea that everyone will observe those rules is—I say again—not the real world. I beg leave to withdraw the amendment in the name of my noble friend Lady Kramer.
Baroness Sherlock
Member’s explanatory statement
This amendment, together with my amendments to Schedule 5, page 108, line 1 and Schedule 5, page 108, line 5, requires a notice under paragraph 5(1) of new Schedule 3ZA to be given to the bank in question.
Member’s explanatory statement
See the explanatory statement for my amendment to Schedule 5, page 107, line 12.
Member’s explanatory statement
See the explanatory statement for my amendment to Schedule 5, page 107, line 12.
5A “(1) Before any direct deduction order under this Schedule is made, the Secretary of State has a duty to consider its effect on any person who—(a) is a victim of domestic abuse, or(b) the Secretary of State reasonably believes to be at risk of domestic abuse.(2) For the purposes of this paragraph, “domestic abuse” has the meaning given by section 1 of the Domestic Abuse Act 2021.”
Lord Palmer of Childs Hill (LD)
My Lords, the amendment seeks to ensure that, before any direct deduction order is made under this schedule, the Secretary of State must consider the effect of such an order on any person who is a victim of domestic abuse, or whom the Secretary of State reasonably believes to be at risk of domestic abuse.
While the Bill rightly includes very important safeguards, such as affordability and vulnerability checks, and limits on the amounts that can be deducted to protect debtors from undue hardship, these general measures may not provide sufficient protection for those experiencing or at risk of domestic abuse, whose circumstances are often uniquely precarious and complex. Victims of domestic abuse frequently face financial control and instability, and the imposition of a direct deduction order could inadvertently place them at greater risk, either by exacerbating economic hardship or alerting an abuser to their financial situation. It is therefore essential that the Secretary of State has a specific statutory duty to assess the impact on this particularly vulnerable group before any order is made. By adopting this modest amendment, we would strengthen the Bill’s existing safeguards and ensure that the most vulnerable are not further disadvantaged by well-intentioned recovery mechanisms. I urge noble Lords to support the amendment in the interests of justice, compassion and the protection of those at risk. I beg to move.
Viscount Younger of Leckie (Con)
My Lords, I offer my strong support for Amendment 109, tabled by the noble Lord, Lord Palmer. It proposes a vital and compassionate safeguard that ensures that, before any direct deduction order is made, proper consideration is given to whether the individual involved is a victim of domestic abuse—or certainly at risk of it.
We know that domestic abuse too often includes economic and financial control. Perpetrators may take over access to bank accounts, manage benefit claims in their partner’s name or use coercion to extract money. For victims in these circumstances, a deduction order made against a joint or controlled account is not just a technical enforcement step but can be catastrophic and expose them to further harm, deepen their financial insecurity and reinforce the very cycle of abuse that they are trying to escape. The amendment puts in place an essential duty that, before such a deduction is imposed, the Secretary of State must ask a basic question: is this person safe? Are they vulnerable specifically to domestic abuse? Could such action cause caused further harm? I am sure the Committee will realise that these comments are not new. This is not about creating loopholes but about making sure that we do not inadvertently punish the very people who most need our protection. If our system is to be just, it must distinguish between those who are deliberately defrauding the system and those who are themselves being defrauded, manipulated or coerced in private and invisible ways.
I fully recognise—others may raise this point—that this kind of information is not always easy to obtain. As we know, domestic abuse is often hidden, and victims may be reluctant or unable to disclose it. But that is not a reason to avoid the responsibility. On the contrary, it is precisely why we must build protective considerations into the decision-making process. So, if a red flag is raised—whether through third-party evidence, existing support services or patterns in the account—the system must be capable of pausing, asking the right and necessary questions and adjusting course. That is surely not an undue burden; it is what we should expect of a responsible, modern enforcement regime.
Of course, I also note that the Government already have duties under the Domestic Abuse Act 2021—I expect we will hear this from the Minister—and under the wider Equality Act to consider how their decisions impact vulnerable groups. But this amendment gives practical effect to those duties in the specific context of direct deduction orders. It does not create new rights out of thin air; it reinforces and operationalises obligations that the state already carries.
So I ask the noble Baroness two questions. In the system and process designed, and having reached proof of concept with the banks—at least on two occasions; I refer back to previous comments—who is responsible for recognising these issues in respect of account holders? Is it the banks? To what extent do they know such detail about their account holders? Or is it the DWP? Is it more likely to know of such matters? Obviously, in the discussions leading up to and beyond the decision to give out benefits, such issues surely would have emerged. Perhaps the Minister can enlighten us on the precise responsibilities here.
Perhaps the Minister can also confirm that the banks would not see the analysis of vulnerability as a key part of their responsibility—that is linked to my previous point—but that their role is simply to raise a red flag with deliberately limited data, as has been outlined, where there is that match of an account holder in receipt of benefits who also has £16,000 or more in an account.
The final question, which chimes with questions asked on perhaps day 4 of Committee, is: how often are such checks carried out by banks, as requested by the DWP? Or—I need to be put right again; forgive me—is the algorithm such that a flag is raised on a 24/7 basis by an algorithm that does a match? Then a report is given to the bank’s responsible person—let us call him the banking manager.
There is a thread running through this debate about how to balance power and protection. Indeed, it is an issue on which noble Lords across the Committee agree; therefore I warmly welcome this amendment from the noble Lord, Lord Palmer, as it provides us with another opportunity to test out the Government and raise our concerns. This amendment is principled, proportionate and practical. I hope the Government will take it seriously, in the spirit it is meant, and reflect carefully on the values it enshrines. I believe it gets to the very essence of what the Bill is about. With that, I look forward to the answers from the Minister.
Baroness Sherlock (Lab)
My Lords, I am grateful, as ever. The subject of Amendment 109, put forward by the noble Lord, Lord Palmer, is very much as it was in the fourth group, with the earlier amendments in the name of the noble Viscount, Lord Younger. The Committee agrees on the objective in that area and we are simply going to talk about the best way to achieve that.
I thank the noble Lord, Lord Palmer, for raising this issue but again, for reasons not dissimilar to those articulated earlier, his amendment is not the best way to achieve this. However, I hope I can give him the assurance that he is looking for.
The DWP very much understands the importance of this issue. The noble Viscount is right that we have statutory obligations, but it is also embedded in the department. All our front-line staff are trained in addressing the issue of domestic violence, the training is regularly refreshed and we engage with stakeholders: the department take it very seriously.
We are committed to continuing to support victims and survivors of domestic abuse whenever they interact with the department. We have experience in this area, as well as existing guidance and processes for supporting victims of domestic abuse. As I say, the training our front-line management staff receive includes assessing affordability and identifying and dealing with vulnerable customers.
My officials have been looking in detail, specifically at how victim survivors could be impacted by the measures in the Bill, and working closely with key stakeholders, including the charity Surviving Economic Abuse, to ensure that the code of practice sets out the right approach to mitigating risks for victim survivors of domestic abuse. The current draft of the code of practice includes steps officials will take to identify signs of domestic abuse, where possible, to identify risks and to support the individual.
However, although I recognise the important intent behind this amendment, the fact is that it would apply to anyone affected by a direct deduction order, including debtors and non-debtors. Similarly to the earlier Amendments 99D and 109ZA from the noble Viscount, Lord Younger, it does not require or enable the DWP to take any action to identify possible impacted individuals or provide any new means by which the DWP could do so.
Lord Davies of Brixton
Member’s explanatory statement
This amendment requires the Secretary of State to undertake an affordability assessment before making a direct deduction order.
Lord Davies of Brixton (Lab)
My Amendments 109A and 109B address the twin issues of affordability and minimising social harm. Amendment 109A deals with the Government’s proposed “affordability assessment”, which is my term, not the Government’s. Amendment 109B requires a de minimis amount to be left in an individual’s bank account following the application of a deduction order. Neither amendment breaks new ground and both are within the terms of government policy. If we are going to pursue this policy, it has to be transparently fair and minimise social harm, which is the purpose of my amendments.
It needs to be stressed that both amendments are strongly supported by UK Finance, which is the collective voice for the banking and finance industry. These are the people who will have to undertake the hard work of implementing this policy, so their views should be taken seriously. I am not a natural proponent of UK Finance—I have spent much of my working life criticising insurance companies and banks for how they treat people—but it is a relevant participant in this process and its views should be taken most seriously.
On Amendment 109A, as I mentioned, there will be an affordability assessment. It is pretty well hidden—there is no reference to it in the Bill—but paragraph 52 of the Explanatory Notes states that direct recoveries
“will only happen once affordability and vulnerability checks have been carried out”,
so there will be checks. There is a more explicit reference in paragraph 723, which states specifically that
“prior to pursuing a direct deduction order”,
the Secretary of State will consider
“the affordability of recovery”.
That affordability assessment is an inherent part of the legislation, even though it is only implied in the Bill rather than required explicitly. My amendment is a probing amendment to press the Government on whether it would be better to have this in the Bill.
To paraphrase the Government’s position as I understand it, recovering benefit overpayments through the debt recovery measure will be a last resort and the Minister may make a direct deduction order only if satisfied that it will not cause a liable person to suffer hardship. Maybe the Minister could put the intention of the legislation into the Government’s words. UK Finance has said that it welcomes this intent but is concerned that the existing safeguards may not provide the level of protection that vulnerable consumers need in practice. Perhaps it knows its customers better than we do.
For this measure to be effective, an affordability assessment is essential: one that is carried out by the DWP and is accurate and realistic. I understand that the DWP is working with the Money and Pensions Service to flesh out the detail of the process. It is obviously essential that the DWP can understand the circumstances of vulnerable customers to ensure that the affordability assessment is fair and will not lead to social harm.
We know that organisations such as the Money and Mental Health Policy Institute—I declare an interest as a member of its advisory panel—the Money Advice Trust and Citizens Advice have been campaigning for some years for improvements in government debt practices. This is not a new problem. I mentioned in the previous sitting the comments made by the House of Commons Public Accounts Committee, but it is relevant to repeat them. It said that the DWP
“does not understand well enough the experience of vulnerable customers and customers with additional or complex needs … We remain concerned about the potential negative impact on protected groups and vulnerable customers of DWP’s use of machine learning to identify potential fraud”.
This goes back to an earlier debate but it highlights that the evidence to hand is that the DWP is not very good at assessing affordability. It is reasonable, by means of proposing this amendment, for the Government to explain how the affordability will be assessed. If the proposals do not appear to be adequate, I will want to return to this issue on Report.
Similarly, Amendment 109B is a probing amendment. It lacks much of the detail that a specific proposal would need but proposes that there should be a de minimis amount left in an individual’s account following the application of a deduction order. The intention is that individuals should not be left without access to essential funds and should not suffer undue hardship.
This is not a new proposal because there are other circumstances in which debts owed to the Government, where the Government have powers to extract money from people’s bank accounts, permit a de minimis amount. There are the comparable HMRC direct recovery of debt measures where there is a de minimis balance of £5,000. There is a similar arrangement in Scotland. Scottish law is a mystery to me, but there is a parallel arrangement under Scottish law that, in circumstances where debts can be taken, they have to leave at least £1,000.
The problem arises—talking about both sorts of deduction orders—that there is a possibility of extracting money and leaving the individual with no income whatever to meet routine payments such as rent. Because the bank account is frozen, they may also have made prior commitments and, when those arise and these private arrangements seek money from the bank account which has been driven down to zero by the deduction order, the individual is left in an extremely difficult situation as debts that they have incurred are not able to be met. There is also the issue of money for routine costs. If someone depends on their bank account to feed their family and the account is driven down to zero, that will also incur considerable and unwarranted hardship.
It is quite clear that, following existing practice, this legislation should permit a de minimis amount to allow routine financial transactions to continue where barring them would cause social harm. There is a particular problem that, once the 28-day period has been triggered during which people can object to the proposed deduction order, the account is effectively frozen. In fact, it is frozen until the end of the unlimited period the DWP has in order to reply to the appeal against the deduction order. There is potential for considerable social harm and that is why it is important that at least some agreed sum of money is left. I suggest £1,000 in my amendment but I am really raising the issue in principle.
If the Government can come back on Report with a proposal along the lines I suggest, that would be good. If they do not, I will seek to raise this issue. Both these amendments seek to avoid social harm, and I hope the Government will take the points on board and come back on Report with suitable amendments to avoid the problems identified, not just by me but by bodies in membership of UK Finance which deal with the customers who will be caught by these provisions.
Viscount Younger of Leckie (Con)
My remarks will be brief. I thank the noble Lord, Lord Davies of Brixton, for tabling Amendments 109A and 109B, which seek to introduce further safeguards into the process by which direct deduction orders are applied. These amendments are clearly driven by a legitimate concern. I am sure it is one that we all share; no one should be pushed into destitution—note that word—because of enforcement action taken by the state. We on these Benches broadly support the intention behind these amendments. As we expand the state’s ability to recover funds lost through fraud, we must do so in a way that is measured, proportionate and fair. We agree that the person on the receiving end of a direct deduction order must be treated with dignity and that the enforcement should never push a person below the threshold of subsistence.
However, while we agree on the principle, the Bill as currently drafted already contains sufficient protections to give effect to that principle. These amendments propose going further. As the noble Lord, Lord Davies, set out, they would hard-wire specific mechanisms into the legislation itself with a mandatory affordability assessment and a fixed, safeguarded amount of £1,000 to be left in a person’s account. While we understand the motivation behind these proposals, we are not persuaded that they strike the right balance.
First, on the affordability assessment, the key question is not whether such considerations should be made—they absolutely should be—but whether placing a rigid requirement in the Bill is the best way to achieve it. Secondly, regarding the safeguarded sum, the proposal to set a fixed floor of £1,000 may be well intentioned but risks creating unintended consequences. For some individuals, that figure may be appropriate, but for others with significantly higher levels of debt or multiple fraudulent claims—of which there are a few, I am afraid—it may act as an unjustified barrier to recovery. A blanket threshold does not easily accommodate the complexity of individual circumstances.
We must not forget what this system is designed to do. We are talking about the recovery of public funds that were obtained unlawfully. These are not arbitrary deductions, but actions taken in response to fraud—in some cases, large-scale fraud—committed against the public purse. These funds belong not to the state in the abstract but to the taxpayers, the public and the people who rely on our public services. I remind the Committee of our duty to recover them on their behalf. We must exercise this power responsibly and we believe the Bill enables that. We must also ensure that we do not design a system that is so laden with friction that it fails to deliver on its core purpose of upholding the rule of law and restoring funds to the public where fraud has occurred.
These amendments raise important points, and we welcome the values that underpin them. We are committed to ensuring that the system is fair, proportionate and humane. We are confident that the existing provisions in the Bill, supported by robust guidance and operational safeguards, provide a sufficient framework to achieve those goals without introducing additional complexity that may compromise the system’s effectiveness.
Before the Minister thinks that I am writing yet another speech for her, I have some questions for her, which may also be helpful to the noble Lord, Lord Davies. Take the case of someone who has taken money fraudulently but finds himself destitute through his own actions and might otherwise be on the streets, homeless —or worse, hungry. What help can the state give to him? What options are there? As a basic, I presume that he will still be eligible for universal credit, albeit, as the noble Lord, Lord Davies, said, it would be subject to an agreed deduction for his misdemeanours. He would therefore still get support, assuming that he is not allowed to keep the £1,000 in his account. As the noble Lord said, the money and advisory services are there, and Citizens Advice is there. They are there to offer advice, but what support is there for such people in extremis? The Minister may say that the household support fund is also there and could be called upon, but that fund is subject to local help and is in the gift of local authorities to give out. Would destitute people come into that?
In conclusion, we do not support these amendments, but I thank the noble Lord, Lord Davies, for prompting this important and short debate. We look forward to working together to ensure that the final system strikes the right balance between fairness and firm recovery of debt.
Baroness Sherlock (Lab)
My Lords, I am grateful to my noble friend Lord Davies for raising this, and to the noble Viscount for his observations. I agree with my noble friend that affordability assessments should be conducted—he has made that clear, and we certainly want to do that as we think it is important—before a direct deduction order is issued, but we regard this amendment as unnecessary and duplicating existing provisions.
Paragraph 6 of new Schedule 3ZA, inserted by Schedule 5 of the Bill, provides that recovery must not cause hardship to the debtor, any joint account holder or dependant, and must be fair. Paragraph 3 requires the DWP to obtain, via an account information notice, bank statements covering at least the most recent three months in order to help make that assessment.
Further detail on how affordability will be assessed will be set out in the code of practice, a draft of which is available to Members; I am sure that my noble friend has had the opportunity to see it. It sets out the principles that will apply when affordability is assessed. They include ensuring that essential living expenses and other reasonable financial commitments are identified and protected. Officials are working closely with organisations such as the Money and Pensions Service to develop the code and, as required by Clause 93, a formal public consultation will be conducted on the draft before it is first issued.
As I have already outlined, affordability assessments must and will take place prior to enforcing a deduction order. These checks use banks statements, allowing DWP officials to consider expenses such as housing and utilities, enabling the deduction to be affordable, fair and based on individual circumstances, rather than a blanket approach of leaving a set amount in the account which could, if not set high enough, prevent the debtor from meeting those essential costs, as the amounts will vary from person to person.
For regular direct deduction orders, paragraph 6(3) of new Schedule 3ZA requires that any regular deductions made by the DWP each month must not exceed 40% of the monthly average amount credited to the account during the last period in which statements were assessed. Regulations will be made under paragraph 24(2)(d) to further set a maximum rate of 20% for all cases that have not arisen due to fraud.
These figures are maximums, rather than fixed deduction rates. Deduction rates will vary as officials take any affordability, hardship factors or other relevant circumstances into consideration. This approach mirrors that already used effectively in the DWP’s existing powers of deduction from earnings or benefits, and it is not obvious why it should be different in these circumstances. Given the safeguards outlined, requiring that £1,000 be left in one or more of the liable person’s bank accounts in every case where a DDO was sought is unnecessary, as the safeguards will already achieve the outcome intended by this amendment.
Regarding the specific questions, I reassure my noble friend that we are alive to the concerns of UK Finance, which we meet regularly. We are working with MaPS and relevant debt sector organisations on this. He mentioned a comparison with HMRC. HMRC has confirmed that its power is a one-off deduction of a tax debt, not a regular deduction. As a result, it does not assess customers’ affordability as part of the process. Its safeguard instead requires it to leave a minimum of £5,000 across the customer’s accounts to stop taxpayers being left with insufficient funds to cover basic needs. We are taking a different approach: we are assessing affordability, and we will have clear sight via bank statements of the debtor’s ability to repay.
In addition to the work we are doing with MaPS, we are working with relevant stakeholder organisations to make sure that our communications with debtors are clear, to help them understand what we are doing and to engage in the best possible way.
I remind the Committee that before any deductions are taken, account holders will be notified and given the chance to make representations. They can provide relevant information about their financial position and evidence relevant to affordability. Even at that stage, the department’s preference is to reach an agreed position with the debtor. If reasonable payment terms can be agreed and they are maintained by the debtor, the DWP will not make a deduction order.
My noble friend and I clearly want the same thing: to make sure that any recovery is affordable. We have taken different routes, but I hope that what I have said today will help him to accept that our route is doing the job and, in the light of that, he will withdraw his amendment.
I am sorry, I forgot to respond to the noble Viscount about destitution. I may have to come back to him on that, because it would depend very much on somebody’s circumstances. Although the household support fund is locally determined, some directions, steers and guidance are given by the centre by the DWP to local authorities. But the fund is significantly there to help with the cost of living. In relation to someone who is destitute and has committed fraud, people may still, if they have an ongoing entitlement to benefit, have been subject to a loss of benefit penalty as part of a process. So it would very much depend on the circumstances. But if I can find anything else useful, I should be happy to put that in writing to the noble Viscount.
Lord Davies of Brixton (Lab)
I thank the noble Viscount and my noble friend the Minister for comments on my amendments. It has been useful to receive a coherent assessment and description of how this process will work. I will read carefully what was said and consider whether it is an issue that needs to be pursued at a later stage. I thank those who have spoken. I beg leave to withdraw my amendment.
Baroness Sherlock
Member's explanatory statement
This amendment means that a regular direct deduction order given by the Secretary of State must specify the amounts to be deducted.
Member's explanatory statement
This amendment is consequential on my amendment to Schedule 5, page 108, line 39.
Member's explanatory statement
This amendment means that a lump sum direct deduction order given by the Secretary of State must specify the amount to be deducted.
Member's explanatory statement
This amendment, together with my amendments to Schedule 5, page 111, line 7, and Schedule 5, page 111, line 15, would replace the tag “first notice” with “pre-deduction notice”. This has no substantive effect but is intended to be easier to understand.
Member's explanatory statement
See the explanatory statement for my amendment to Schedule 5, page 110, line 19.
Member's explanatory statement
This amendment is consequential on my amendments to Schedule 5, page 108, line 39 and Schedule 5, page 109, line 8.
Member's explanatory statement
See the explanatory statement for my amendment to Schedule 5, page 110, line 19.
Member's explanatory statement
This amendment removes a provision that is redundant (because paragraph 7(5) applies in relation to every direct deduction order).
Member's explanatory statement
This amendment ensures that a bank must comply with a further information notice.
(a) the period of one month beginning with the day after the day on which the appellant was—(i) given a copy of the direct deduction order, or the varied direct deduction order, in a case within sub-paragraph (1)(a) or (b), or(ii) notified under paragraph 12(3) or, where a review was sought, paragraph 18(6), in a case within sub-paragraph (1)(c), or(b) such longer period (if any) as the Tribunal considers reasonable in all the circumstances.”Member's explanatory statement
This amendment means that the Tribunal can extend the time limit for bringing an appeal in relation to a direct deduction order of the Secretary of State.
(b) such longer period (if any) as the Tribunal considers reasonable in all the circumstances.”Member's explanatory statement
This amendment means that the Tribunal can extend the time limit for appealing against a penalty under Part 2 of Schedule 5.
“Deputies
22A (1) This paragraph applies where a person (a “deputy”) acts on behalf of an account holder (including a liable person) in relation to their account by virtue of—(a) a power of attorney, or(b) an appointment by, or an order of, a court.(2) The following provisions apply in relation to the deputy of the account holder as they apply in relation to the account holder—(a) paragraph 1(7);(b) paragraph 3(5)(b) and (c);(c) paragraph 3(9);(d) paragraph 3(9A);(e) paragraph 5;(f) paragraph 11(1); (g) paragraph 12;(h) paragraph 13(3), (6) and (8)(b);(i) paragraph 14(3);(j) paragraph 15(3);(k) paragraph 16(2);(l) paragraph 18;(m) paragraph 19.(3) Paragraph 13(7)(a) and (b) applies in relation to the deputy of the account holder instead of the account holder.”Member's explanatory statement
This new paragraph ensures that new Schedule 3ZA to Social Security Administration Act 1992 operates effectively where a person acts on behalf of an account holder by virtue of a power of attorney or an appointment by, or an order of, a court.
Lord Davies of Brixton (Lab)
We have an issue on this proposal to remove driving licences from people who fail to pay their debts to the DWP. We effectively had a debate on the issue at Second Reading, and I am sure that there will be a debate on this at Report. The purpose of having another prolonged debate at this stage, when situations and positions are so clear, is limited. Although there are clear arguments about effectiveness, and it was advanced that the experience of the child maintenance system, where such a power exists already, indicates the success of the policy, the problem is that we do not have a clear counter to that. We know what we know: very few driving licences are deducted or abolished because of action by the Child Maintenance Service. Is that because it is an effective policy and everyone complies, or because it is rarely used because it is ineffective? We simply do not know. The proponents of the proposal here will say that that demonstrates the policy’s effectiveness, but I think it is reasonable to continue to express doubts about that. However, that is a separate issue.
My objection, fundamentally, is about the philosophy of what is being achieved here and about the nature of state power. I am sure we all agree that the state should have the power to decide who is safe to drive on the public roads. I have no problem with that; that is the responsibility that we as a community have entrusted to the state. The issue is whether that right should be used for other purposes. Is the fact that you can or cannot have a driving licence related to other factors? In my view, it should not be used for other factors; that is an overextension of state power, which is the fundamental reason why I oppose this part of the Bill and why I am suggesting that the clause, and consequently the schedule, should not be passed. This is an issue of principle, as I have explained, and I am sure that we will return to it on Report—so enough said.
Baroness Bennett of Manor Castle (GP)
My Lords, it is a pleasure to follow the noble Lord, Lord Davies of Brixton, and speak to this stand part notice, also signed by the noble Lord, Lord Sikka. The noble Lord, Lord Davies of Brixton, set out the question of principle about whether we allow access. I will make a couple of practical arguments and one point of comparison.
I start with the practical arguments. I was just thinking back to the second-ever vote that the Green Party won in either House of Parliament, which was an amendment in the name of my noble friend Lady Jones of Moulsecoomb calling for a review of rural bus services. Losing your driving licence might be an inconvenience, if you live in London—in most parts—but, if you live in the depths of the countryside, it effectively totally traps you in a situation where huge practical disadvantage will happen in your life.
It is worth noting that Clause 92 allows the disqualification of a licence for two years. I acknowledge that this is by a court—it is different to what we were talking about before—but I also acknowledge that the option of jail is available here. I am not quite sure how a court will make a judgment—if it is a really serious offence, where will you place those issues? My comparative point is to note that, back in 2023, the then national lead for the police for fatal crash investigations, Andy Cox, made some very strongly worded statements about people who get 12 points on their licence. He said that too many people were using exceptional circumstances to get out of losing their licence. In fact, one in five people who end up with more than 12 points on their licence in three years succeed in pleading exceptional hardship and therefore do not their licence and can continue to drive.
The really important point here is that, as the national lead for fatal crash investigations pointed out, some people in that situation go on to kill on the roads. We have a situation where people who are driving dangerously and illegally are able to keep their licences, which is quite a contrast to people who have not been accused of doing anything wrong on the roads but may potentially be suffering from that penalty.
Again, we are talking about something that is potentially hitting recipients of benefits, and I rather suspect that a lot of those people who manage to plead exceptional hardship in court, and keep driving with 12 points on their licence, have a fair amount of privilege in their life and can employ fairly expensive lawyers to keep driving. There is a real imbalance there, which should be cause for concern to the Committee.
Viscount Younger of Leckie (Con)
My Lords, I oppose the proposition that Clause 92 and Schedule 6 should not stand part of the Bill. Clause 92 provides for disqualification from driving to be a sanction that is available in the most serious and persistent cases of benefit fraud, where a recoverable amount remains unpaid despite all reasonable efforts at recovery.
I do not wish to step on the Minister’s toes by speaking in defence of this provision. Perhaps I should anticipate another speech that she will be making—we will probably be in broad agreement. However, we must be clear that this is not about punishing people arbitrarily but about ensuring that there is an effective deterrent against repeated and deliberate non-compliance with efforts to recover public money. We have a precedent for this, as we noted at Second Reading. The same mechanism exists in the child maintenance enforcement regime. We have learned from that experience that deterrents do work—or we think that they work. I will return to that in a moment. Fewer than five driving licences were seized under those powers, because the power to impose a disqualification was sufficient to prompt compliance. It was a last resort that rarely had to be used, precisely because it was effective in changing behaviour before reaching that point.
In the spirit of trying to be helpful to the Government here, what evidence can be produced that the threat of taking away a driving licence is indeed a deterrent? One statistic could be the number of cases of non-payment from those people whom we know have the ability to repay unlawfully gained moneys but who resolutely refuse to do so and are on the cusp of having their licences taken away. To ascertain the numbers that may have miraculously fallen at this point is one way of defining whether the deterrent has worked. One might assume that any numerical drop in non-paying numbers immediately before a licence withdrawal defines that deterrent. I listened carefully to the remarks from the noble Baroness, Lady Bennett. Perhaps the fall could be seen to be larger in rural areas, as the deterrent would be more significant there than in urban areas. The Minister may be able to enlighten us on this or add that to a letter that hopefully will be coming our way.
This is about proportionate enforcement. Clause 92 does not create a routine sanction. It does not apply automatically. It is not triggered for minor mistakes or for those who are acting in good faith. It exists as a targeted and time-limited measure, for use only when all other routes have been exhausted and when the liable person is wilfully refusing to repay money, which—let us not forget—has been obtained unlawfully.
Some may argue that disqualification from driving is a severe consequence—the noble Baroness, Lady Bennett, has made that point. However, we must weigh that against the seriousness of fraud against the public purse. This money could have been used to fund front-line services, support the vulnerable or maintain trust in the welfare system. Those who persistently abuse the system must know that there are consequences for their actions, which will be followed through. This clause provides one such consequence that is proportionate but effective.
We have been consistent throughout Committee in saying that enforcement must be fair but credible. If the consequence of not repaying fraudulently obtained benefits is no more than a polite letter and no meaningful follow-up, then we send entirely the wrong message. Clause 92 helps to restore that balance. It does not criminalise poverty or target vulnerable people. It sets out a power that, in exceptional cases, can be used to bring about compliance when other tools have failed. I therefore oppose the removal of Clause 92 and Schedule 6 and urge colleagues to do the same. I am interested to hear the remarks of the Minister.
Baroness Sherlock (Lab)
My Lords, I thank noble Lords and thank the noble Viscount for doing some of my job for me, for which I am always grateful.
I want to try to explain why the Government are doing this. Clause 92 inserts new Section 80C into the Social Security Administration Act 1992 to enact the “disqualification from driving” power. Schedule 6 inserts new Schedule 3ZB into the 1992 Act, containing the substantive provisions of the “disqualification from driving” power introduced in Clause 92. The introduction of this allows the DWP to apply to a court to disqualify a person temporarily from driving if they persistently and deliberately fail to repay their debt. It is therefore essential to boost the DWP’s ability to recover public money.
However, it is worth being clear that this is a power to deal with a small subset of debtors who are persistently frustrating the recovery practice—I will come back to that in a moment. Preventing an evasive debtor from driving unless they repay is within the Government’s control in a way that they cannot circumvent. While it will be used as a last resort, it is an additional and effective tool in cases where debtors simply refuse and evade repayment. As I think I said at Second Reading, the latest results from the UK transport survey showed that 74% of adults have a driving licence. Debtors are unlikely to want to be inconvenienced by being unable to drive. They can avoid disqualification and any other enforcement action by making voluntary repayments.
Schedule 6 sets out when the power may be used and how it will operate, including rules on the operation of suspended and immediate disqualification orders, variation and revocation of orders, as well as the grounds on which an order may be appealed. Appeals may be made to the appropriate court on points of law, including the terms of an order or the court’s decision to make, not make, vary or revoke an order. In accordance with Clause 90, this power will be used as a last resort and, as outlined in Schedule 6, only for the most serious cases for debts with at least £1,000 outstanding. The aim is to deter debtors from deliberately choosing to evade repayment, such as by moving their capital out of reach when they have the means to pay.
Only when all other attempts at recovery have failed, including the new direct deduction order, will DWP be able to apply to the court for a suspended disqualification order. If the court agrees that the debtor had the means to pay but did not repay without a reasonable excuse, it will order the debtor to make what it assesses to be affordable repayments. The debtor can avoid being disqualified by making these repayments set by the court. Only if the debtor does not comply with the court’s repayment terms can the DWP apply for an immediate DWP disqualification order. It is at that point—again, only if the court agrees—that the debtor can be disqualified from holding a licence for up to two years.
Before either a suspended or immediate order can be made, the debtor will have an opportunity to be heard by the court. It is important to note that the court cannot make either a suspended or an immediate order if it considers that the debtor has an essential need for their licence, such as that they need to drive as part of their job or to care for a dependant.
The role of the court throughout this process is an important safeguard, which we have included to ensure a balance between taking robust action against those who deliberately evade recovery and preventing undue hardship. We recognise that stopping someone from driving is a serious step, so my department has built in several other safeguards to give debtors every opportunity to avoid that. For example, missing a single instalment will not normally result in an immediate disqualification order and, even where someone becomes disqualified, they can get the right to drive back when they start making their repayments and the court considers that repayments are likely to continue. But persistent evaders who have the means to pay their debts will no longer be able to evade paying.
In response to my noble friend, I think he is challenging me as to why this is a good and effective means of doing it. I accept that it is unusual, but there is a small subset of the most evasive debtors: people who could pay and just will not. They might be, for example, debtors who transferred their money into cryptocurrency, or fraudsters who moved their capital to offshore accounts that the DWP cannot easily get at because they are outside our jurisdictions. It simply does not seem appropriate. If we cannot do anything else, there is one thing the state can do: suspend or remove their driving licence to pull them to the table. There may be some people for whom this is the only thing that works, so we want to keep it there in our armoury.
The power has been used effectively by the Child Maintenance Service. I do not know whether we can go into enough detail in the CMS debt management data to find out whether I can answer the questions that the noble Viscount is asking, but I will have a look at that. But certainly the Child Maintenance Service believes that this is an effective tool for bringing people to the table when nothing else works.
The Bill includes strong safeguards. The power will not and cannot be used where someone cannot afford to pay. The Bill is clear in paragraph 1(4) of new Schedule 3ZB, in Schedule 6, that the court must be satisfied that the person failed to pay “without reasonable excuse”. That clearly excludes cases where they do not have the means to pay the debt. Of course, the debt must also be of a certain value. Clause 90 says that it must not be “reasonably possible” to recover via other methods, including direct deduction orders, and that this can be used only after they have been given reasonable opportunities to pay.
Viscount Younger of Leckie (Con)
I appreciate the noble Baroness’s very full response. This is more of a probing question. We have obviously been debating and talking about driving licences. The ultimate punishment or sanction is prison, but we obviously do not want to exercise that if possible, both for the individual and because we do not want to clog up prisons. But what other sanctions could there be? We have been talking about driving licences, but I know that, in the Child Maintenance Service, taking away passports was raised as a possible sanction. What thoughts does the noble Baroness have on that front?
Baroness Sherlock (Lab)
We are not proposing removal of passports on this occasion.
Lord Davies of Brixton (Lab)
I thank noble Lords who took part in the debate. I thank the noble Baroness, Lady Bennett, for her support. I am disappointed that the Conservatives, the party of individual freedom, did not see fit to support my argument.
There are a couple of issues that could be helpful to the debate which is likely to take place on Report. If it is possible to get further statistics from the Child Maintenance Service about people who were threatened and then gave in—I cannot totally see how that is possible—that would be good.
There is also the issue of the discriminatory nature of the punishment between different groups of people. As I have made clear, that is a practical objection, which is not why I am against this measure at heart. It would be useful in debate to know more of that practical question. As I have read the paper so far, it is about people who require a driving licence to carry out the functions of their job. However, my noble friend the Minister said that it would cover people who need to drive to work. Perhaps she could interrupt me if she is able to clarify.
Baroness Sherlock (Lab)
It is up to the court to determine if someone has an essential need for a licence. We have deliberately drawn it broadly so that the court can make that determination. Examples were given of somebody who needed a car to go to work or maybe had essential caring responsibilities. In response to the noble Baroness, Lady Bennett, I raised the possibility of somebody who lived somewhere so remote that there was no public transport. Again, that would be a case that they would make to the court. The position is deliberately drawn broadly to allow the court to make that determination.
Lord Davies of Brixton (Lab)
Thank you; that is helpful. I withdraw my objection to Clause 92 standing part of the Bill.
Member's explanatory statement
This amendment and another to clause 105 in the name of Viscount Younger would compel final codes of practice to be laid before Parliament, before the provisions in the Act could come into force.
Viscount Younger of Leckie (Con)
My Lords, we now turn to what I believe is the last group for today. I will speak to Amendments 122A, 122B and 122C, which largely concern the code of practice and matters relating to the codes of practice as set out in Clause 93.
These amendments are not only sensible but vital if we are to ensure that the framework for exercising these powers is both transparent and democratically accountable. Fundamentally, our amendments recognise that the code of practice is not a peripheral procedural matter; it is a foundational document. It will guide how sensitive and powerful enforcement powers are exercised. It will shape the expectations placed upon investigators, the protections afforded to individuals and the standards against which public officials will be held. In short, it will govern the operational culture of the entire system.
Amendment 122A would ensure that the final version of the code is laid before Parliament before these new provisions in the Bill can come into force. I feel it is important at this stage to reiterate that we are being asked to grant significant new powers, including powers of entry, search, seizure and direct deduction, and it is therefore wholly appropriate that Parliament sees, and has the opportunity to scrutinise, the final version of the rules that will help determine how those powers are used. We welcome that, and thank the Minister—I perhaps should have said this earlier—for making good on her promise to release draft versions of the code to noble Lords ahead of Committee, although we feel that it is even more important that we have a binding assurance from the Government that a final version of these documents will be made available to Members of both Houses ahead of the Act coming into force.
Amendment 122B would further strengthen this by requiring a public consultation on the draft code before it is issued. I have a feeling that the Minister may have confirmed this earlier; nevertheless, I raise it now and await her reply. Consultation is not just a box-ticking exercise, it is a vital part of democratic policy-making, especially in areas where the state will be interacting with vulnerable people, seizing property or accessing private data. Consultation allows front-line practitioners, civil society groups and those with lived experience to offer their perspective and to flag where guidance may be unclear, safeguards may be weak and unintended consequences might arise. We must not underestimate the value of that input.
We have said many times that our primary goal and function throughout Committee is ensuring that the Government come out with a Bill that is ready to go. We want a public authorities Act that combats fraud effectively and deters criminality in the future but also works for the people who will undertake and be subject to its provisions. It really is important that we get all these balances right and that we incorporate these review mechanisms now, so that the Bill is ready to go once it becomes law.
Finally, Amendment 122C would ensure that any subsequent change to the code is not only laid before Parliament but subject to parliamentary review. This is a particularly important point, because it speaks to the danger of incremental change, where guidance can be revised behind closed doors, without scrutiny or proper debate. These codes are not trivial; they are the operational blueprint of this entire regime. If we in this House and the other place are to fulfil our role as scrutineers and custodians of civil liberties, we must retain the ability to oversee how these powers evolve.
If the Government’s position is that these powers will be used proportionately, lawfully and with care, they should have no difficulty in agreeing that the rules that govern them should be open to parliamentary oversight, public consultation and full transparency. That is not a constraint; it is a safeguard for both the public and the state.
As I have said before, we are of course all agreed on the need to tackle fraud, but we must also agree on the need to exercise these new powers with clarity, accountability and respect for the values that underpin our legal and constitutional system. We believe that these amendments would help to ensure that. I urge the Minister to accept them, or, at the very least, to recognise their merit and return with similar provisions that enshrine the same principle.
Parliament broadly supports what the Government are doing, and if the Government intend to exercise these powers responsibly, with adequate safeguards, consideration and the principle of proportionality that I and my noble friend Lady Finn have returned to several times in Committee, I assume and hope that Parliament will have no problem supporting what the Government do in their code of practice. However, parliamentary oversight, to ensure that the Government are tied to these important principles not just now but in the future, is an important safeguard which we feel must be made explicit in the Bill.
In conclusion, these are reasonable, proportionate and constructive proposals. They would not hinder the Bill’s effectiveness; rather, they would make the Bill more effective once it comes into force. I see that, miraculously, there is no one else wishing to support—I am sure it is no reflection on my remarks—but I genuinely look forward to the Minister’s closing remarks. I beg to move.
Baroness Sherlock (Lab)
My Lords, in the absence of a crowd of supporters, I thank the noble Viscount for setting out his amendment so clearly. I hope that my remarks will reassure him and give him the confidence that he does not need to press ahead with these amendments.
Amendments 122A, 122B, 122C and 129 seek to compel the Secretary of State to conduct a public consultation on the DWP’s code of practice for the debt recovery powers, to lay a final code before Parliament before the powers in this Bill come into force and to subject any changes to the code to parliamentary review. Amendment 128 would require the Minister for the Cabinet Office to lay a code of practice before Parliament on the administration of penalties before the PSFA’s powers under Part 1 can come into force.
The provision made for a code of practice in Clause 93 is important for the DWP’s debt recovery measures, providing transparency and reassurance on how the debt recovery powers will be operationalised. However, we think these amendments duplicate existing provisions in the Bill and therefore are not necessary.
The DWP’s code of practice on debt recovery powers will complement the provisions in the Bill, setting out guidance and key principles, including how and when the new recovery powers will be used. Extensive collaboration continues to take place with a wide range of stakeholders, including the Money and Pension Service, the charity Surviving Economic Abuse and the finance sector, to develop this code of practice. The purpose of this engagement is to ensure the code provides relevant operational guidance on matters such as vulnerability and to give clarity for debtors subject to the powers and their representatives. We are grateful to all organisations for their helpful collaboration and guidance.
Drafts of all the DWP codes of practice have been made available for review by noble Lords upon request. While there is no requirement on us to provide drafts of these codes alongside the legislation or even to legislate to produce one, we understand their importance and want to be transparent with Parliament. This is also why new Section 80D(6), as inserted by Clause 93, already requires us to carry out a formal public consultation before the first code is published and to lay each issued version before Parliament. In response to the noble Viscount’s questions, the Government are consulting on all codes. Both the DWP and the PSFA will publish them before first use.
We have already said in terms of the debt, this will be done before the new debt powers in Part 2 of this Bill are used. However, I should note that Amendment 129 as drafted would prevent all the other provisions in the Bill that are not subject to the debt code of practice coming into force until the debt code was issued. I am not sure if that was the intention of the noble Viscount, but it would obviously be disproportionate and unnecessary.
It is also not clear from the amendment what parliamentary review of future changes to the code would entail but I am going to assume the noble Viscount would like Parliament to have the opportunity to challenge or scrutinise the code each time it is updated. If so, that would not be necessary or proportionate. The code will be revised periodically to keep it up to date with operational considerations and processes, and the Bill makes provision for each issued revision to be laid before Parliament.
The noble Viscount mentioned the importance of Parliament seeing the rules. It is worth understanding that the debt code of practice does not contain statutory provisions, nor does it place obligations on others. Rather, it sets out how the department will operationalise the new recovery powers. The Bill clearly sets out in considerable detail the legal obligations introduced. Other substantive provisions set out in regulations will, of course, be subject to normal opportunities for parliamentary scrutiny. I am also unaware of any precedent for revisions to a code of this nature to be considered by Parliament or subject to its approval.
Amendment 128 takes us back to the PSFA in Part 1 of the Bill. Noble Lords will recall that we have already discussed Clause 62, which makes provision for the PSFA to produce a code of practice that will explain how and why civil penalties will be calculated and imposed to ensure the powers are used transparently and reasonably. This clause stands part of the Bill.
A draft of the PSFA code of practice has also been provided to noble Lords, as was promised in Committee in the other place. As I mentioned, the PSFA intends to consult widely on the code of practice prior to the publication of the finalised draft, which will be before the first use of the penalty powers. Indeed, Clause 62(4) states:
“The Minister must lay the code of practice, or any reissued code of practice, before Parliament”.
I have outlined that the provisions already in the Bill go above and beyond what is required for legislation of this kind because we recognise the importance of the code of practice and have done so in the spirit of transparency. With those assurances, I urge the noble Viscount to withdraw his amendment.
Viscount Younger of Leckie (Con)
My Lords, the codes of practice are documents which we feel, from how the Bill is drafted, are being treated as ancillary—I set out my stall on that earlier—when, in truth, they are central. These codes will be the compass by which investigators navigate the use of intrusive and sensitive powers, they will be the primary reference point for those administering the system and those subject to it, and they will set the standards by which the system is judged.
Having said that, I have noted the Minister’s responses and reassurances, particularly on the publication of the codes, if I heard her correctly, so I appreciate all that. I will look further at the purpose behind our Amendment 129, and I take her point on that. I am not in the business of wrecking the Bill—I know she did not say that—and will reflect before Report on that amendment and the responses the Minister has given to the other amendments. I appreciate all her responses. With that, I beg leave to withdraw my amendment.
Abducted Ukrainian Children
Baroness Tyler of Enfield
To ask His Majesty’s Government what steps they are taking to support the safe return of abducted Ukrainian children forcibly removed to Russia and Belarus.
The Minister of State, Foreign, Commonwealth and Development Office (Baroness Chapman of Darlington) (Lab)
My Lords, the UK continually raises the issue in multilateral fora, alongside our allies, and is an active member of the International Coalition for the Return of Ukrainian Children. We contribute to the Partnership Fund for a Resilient Ukraine, a multi-donor initiative through which we support the Government of Ukraine to facilitate the return and reintegration of children. Through PFRU, we have supported the NGO Save Ukraine and the Ukrainian Government’s Bring Kids Back initiative.
Baroness Tyler of Enfield (LD)
My Lords, I thank the Minister. While figures vary, Save the Children has estimated that over 20,000 Ukrainian children have been forcibly transferred to Russia or Russian occupied territories, separated from their families and subjected to systematic efforts to erase their identity, including re-education camps, forced adoptions and conscription. The sheer number and ferocity of other international conflicts has resulted in relatively little attention being given to these abhorrent violations of international law, so what urgent steps are the Government considering to ramp up their economic sanctions and travel bans on those involved—to date, they have applied sanctions to 19 individuals and three entities—and to ensure that those responsible for these war crimes are brought to justice?
Baroness Chapman of Darlington (Lab)
I am very pleased that this Question was selected, because the noble Baroness is right to remind the House what has been happening. It is a dreadful thing for any family to find that their child has been removed from their country, and to not know where they are, how they are and how they can be returned. As she said, we have been using our sanctions regime to hold those responsible to account and to try to encourage the return of the children. As she also said, we are talking about estimated numbers, but only around 900 have been returned so far out of 20,000. We do not have a huge amount of confidence even in those numbers, which are the Ukrainian Government’s, so there is clearly a lot more that needs to be done.
The noble Baroness knows that we do not comment on future sanctions designations, but we will continue to use every tool at our disposal to locate these children and to support those who are negotiating their return.
Lord Touhig (Lab)
My Lords, now that there have been calls for the release of Ukrainian prisoners of war held by the Russians, those prisoners of war have hope of freedom and returning home. Not so the 1.5 million children living in Russian-occupied Ukraine. Already, thousands have been taken to Russia, deliberately re-educated, handed over to Russian families and forced to become Russians. For these children, there will be no freedom unless we help. Will the Government support the Council of Europe’s demand that any peace agreement ending this war must guarantee the return of these kidnapped children?
Baroness Chapman of Darlington (Lab)
My noble friend does a wonderful job with the Council of Europe, and we have supported the things that he describes. We also raise this at the OSCE and in every other fora in which we are able to do so. I agree with every word that he said, and I urge him to continue to make the case that he does.
Lord Pickles (Con)
My Lords, the numbers could be even higher, as President Putin is giving Russian administrators in occupied Ukraine a quota of children to be delivered. In this terrible situation, one of the worst things is that the most vulnerable children are being targeted, particularly the children of people serving in Ukraine’s armed forces. When the time comes for a peace negotiation, will the Minister do her best to ensure that the return of these children is non- negotiable?
Baroness Chapman of Darlington (Lab)
Absolutely. This is a crime. Children should never be pawns of war, but this is happening. Many of the children, as the noble Lord says, are the most vulnerable children; some were taken from institutions, and some at check- points. They are now in Russian institutions, some in Belarusian so-called recreation camps, some with families. It is the not knowing, I think, that adds to the pain and torture of the families. Some of these children are now becoming adults and are being required to serve in the armed forces. This is abhorrent, and we will continue to raise this. I am glad that we have the noble Lord’s support.
Lord Cromwell (CB)
My Lords, we normally think of war as being about lost and gained territory, but this is a surreal nightmare for any parent that is almost impossible to imagine. Thousands of children are being taken from Ukraine and Russified. I agree with all the previous questions, so will the Minister make her best efforts to raise public awareness of this issue— I just do not think there is enough yet—and, as others have said, make it central to the negotiations?
Finally, what brought the Nazis to account was their obsession with keeping detailed records. I do hope that we will extract enough information from the Russian side as soon as possible as to how many children are affected and where they are.
Baroness Chapman of Darlington (Lab)
In the noble Lord’s question is the point about Russification, which tells us a lot about some of the motivation for the kidnapping of these children and for the war more generally. On the issue of records, it is difficult at the moment. We are working with the Government of Ukraine to try to get accurate data and information, using whatever means are necessary. I pay tribute to the Qataris for the role they have played in managing to negotiate the return of some children. We all have to do everything we can to make sure that public awareness, as he said, is raised of this issue. I think that when people find out that this is happening at this scale and in such an organised way, they will be horrified. So I agree with the noble Lord, and we should make sure that the public are made more keenly aware of this.
Lord Callanan (Con)
My Lords, it is great to see virtual unanimity across the House on these issues; I have agreed with every comment made so far. Of all the many outrageous acts committed by Russia after its invasion, this systematic campaign of forcibly abducting children from Ukraine is perhaps one of the worst. It fractures their connection to Ukrainian language and heritage through, as the noble Baroness, Lady Tyler, says, their so-called re-education, disconnecting them from their Ukrainian identities. I wonder whether the Minister could update the House on what the Government are doing to support Ukraine’s domestic investigations into deaths, and link this to the International Criminal Court investigation into what are war crimes.
Baroness Chapman of Darlington (Lab)
We are supporting the ICC with funding and other measures and will continue to do so. It does matter that accurate records are kept and that, when the time comes, we are able to hold to account those responsible for this dreadful crime. In working with the Ukrainians, we are also looking at how children are supported after they are returned, and at their psychosocial needs. Having been abducted to another country and subjected to what is euphemistically called “re-education”—we know what that means—there is an impact on them. It is important that we think long term about what these children need.
Lord Anderson of Swansea (Lab)
My Lords, what is puzzling is how does Russia try to justify this awful abduction? Is there no shame? Is there no international body which can intercede on behalf of those children?
Baroness Chapman of Darlington (Lab)
It is good see my noble friend and to hear his question. We all wish there was a lever that we could pull. At the moment, the first challenge is to locate the children. The circumstances are all quite different; some are in institutions in Russia, some have been placed with families and others are in another country altogether, and the Belarusians have been facilitating these crimes. The truth is there is no agency that can intercede and do what we would all love to do, which is to travel to Russia, pick up the children and bring them home. That has happened in some instances—some families have been able to bring home their children themselves— but this is far from standard. To have only 900 returned at this stage, when this has been going on since 2014, concerns us all hugely.
Care Workers: Foreign Worker Visas
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Baroness Fraser of Craigmaddie
To ask His Majesty’s Government what plans they have to increase the number of care workers across the United Kingdom once care worker visas for foreign workers are discontinued.
Baroness Fraser of Craigmaddie (Con)
I beg leave to ask the Question standing in my name on the Order Paper and declare my interest as chief executive of Cerebral Palsy Scotland.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Baroness Merron) (Lab)
My Lords, the Government are reducing reliance on international recruitment in adult social care and working to improve domestic recruitment and retention. In England, we are introducing the first fair pay agreement for adult social care, implementing the first universal career structure and providing £12 million this year for staff to complete training and qualifications. These changes will help attract staff to the sector, and provide proper recognition and opportunities for them to build their careers.
Baroness Fraser of Craigmaddie (Con)
I thank the Minister for her Answer and apologise if it feels like Groundhog Day, because I know she answered a very similar Question from the noble Lord, Lord Wood, on Monday. As the Minister well knows, solving the recruitment and retention crisis in this sector is long term, will take cross-party work and has many regional variables. In her Answer, she referred to what the Government are able to do in England, but in Scotland, where at the moment a quarter of rural and island carers come from outside the UK, we have a real issue. One provider said to me, “It’s not just about money. Despite paying above-average wages, we haven’t interviewed a British person for over three and half years”. In many rural and remote areas, agency staff are both unaffordable and unavailable. Will the Minister feed back to her colleagues in the Home Office that any cliff edge or one-size-fits-all approach that fails to take into consideration regional challenges threatens to devastate an already fragile service?
Baroness Merron (Lab)
First, I pay tribute to the noble Baroness for her leadership of Cerebral Palsy Scotland. As I know she is aware, adult social care is devolved, which is why I made reference to England only. I am very happy to raise the points the noble Baroness made with the Foreign Office—sorry, with the Home Office.
Baroness Merron (Lab)
Well, I will raise them with whoever the noble Baroness likes.
The other point that comes to mind is that we will also be discussing with our colleagues over the border how they can boost the domestic workforce, because it is so important that we do, and that we reduce reliance on international recruitment.
Lord Turnberg (Lab)
My Lords, my noble friend may have hinted at this already, but one of the ways in which we might encourage retention and attraction to the job of being a care worker is to ensure that they have a nationally registered professional qualification. Is that going to be the case?
Baroness Merron (Lab)
There are a number of ways that we are promoting opportunities to develop skills and knowledge, which will improve morale but also the attractiveness of working in adult social care. To that point, I am particularly pleased that apprenticeships are available for young people, so that they may see the benefits of working in the social care service.
The three main areas are an expanded care workforce pathway; the launch of the adult social care learning and development support scheme in September, which will allow funding for eligible care staff to complete courses and qualifications; and the new level 2 adult social care certificate scheme, which has been backed up by some £12 million this financial year. In all of this, we are seeking to professionalise and recruit—as well as retain—valued social care staff.
Baroness Barker (LD)
My Lords, the spending review promised £4 billion for social care, but not until 2028-29, and it is being carved out of the NHS. Until then, there is nothing in the spending review, so all that is going to happen is that social care employers will have bits and bobs of sporadic announcements of limited pots of funding. How on earth can they build a skilled workforce which is adequate and up to the demands that are going to be placed on it?
Baroness Merron (Lab)
Perhaps I could assist by clarifying that the spending review, which allows for an increase of over £4 billion of funding available for social care, is by 2028-29; it is not a matter of waiting for that long. That is in comparison with 2025-26. I hope I was helpful to your Lordships’ House in identifying a number of actions we have already taken to professionalise, upskill and allow people to build careers in the social care workforce. That is absolutely crucial. That, aligned with stopping international recruitment in this area—with a period of time for transition of some years—will shift to improve and increase the adult social care workforce in this country.
Lord Kamall (Con)
My Lords, while there are legitimate concerns over the levels of immigration, it is important to recognise the contribution that immigrants have made to our great country, not least to recall that after the war, our public services were saved by immigrants, especially from Commonwealth countries. We should not forget that.
My question is about the NHS and Care Volunteer Responders programme, which was set up during the pandemic and extended to adult social care in 2023. Unfortunately, the Government recently closed the volunteering service without an obvious alternative. While I recognise that volunteering will not make up for workforce shortages, what action are the Government taking to ensure that those who wish to volunteer in the social care sector can make a worthwhile contribution?
Baroness Merron (Lab)
While I absolutely agree about the value of volunteering, as we have discussed before, I should make clear that volunteering is not a substitute for employment on the right pay, the right terms and conditions and with the right status. I also absolutely agree with the noble Lord about the contribution that has been made by those from overseas to supporting our care services, and indeed by all care workers.
As we have discussed in this Chamber, the scheme was not simply closed. It was something that was appropriate for when we were in a pandemic but not for now. In fact, we have introduced a whole range of measures which I will be very pleased to remind the noble Lord of, to ensure that we can have more volunteers who are better used and more highly regarded. They are a complement to our workforce, and very valuable they are too.
Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)
We will hear from the Bishop next and then the Cross Benches.
The Lord Bishop of London
My Lords, as we have heard, concerns around low pay and insecure contracts are long-standing in the social care sector. The Minister made mention of the fair pay agreement; can she explain how this will ensure that a living wage, living hours and living pensions will be paid to staff among the private social care providers?
Baroness Merron (Lab)
As noble Lords will be aware, the Employment Rights Bill establishes a framework for fair pay agreements. That will mean an agreement through which adult social care sector pay, as well as other terms and conditions, will be established through negotiating bodies. The negotiations will be reached by employers, workers’ representatives and others, in partnership. That will provide the opportunity to negotiate this in a responsible manner and help address the recruitment and retention crisis in the sector and support the delivery of high-quality care.
Lord Laming (CB)
My Lords, I am sure the Minister will agree that we have an enormous challenge to overcome the belief that all you need to do this work is a kind heart. A kind heart is important, but there is a huge range of skills that are necessary over and above that. It is important therefore that we do all that we can to provide the opportunities to develop these skills and work incredibly hard to improve the status of these workers.
Baroness Merron (Lab)
I wholeheartedly agree with what the noble Lord said. I find that a kind heart is a good thing in most professions, but we also require more skills in many professions. That is why we have set out and launched a whole range of new measures in skills, training and development—and paying and treating people properly will also hugely raise their status.
Wild Camping
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Baroness Miller of Chilthorne Domer
To ask His Majesty’s Government what consideration they are giving to extending the right to wild camping beyond Dartmoor to other National Parks.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)
My Lords, I am delighted that last month’s Supreme Court judgment upheld the public’s right to continue to wild camp on Dartmoor—one of our country’s most beloved landscapes, with its iconic moorlands. The Government continue to recognise the importance of providing access to the outdoors. We will increase access to nature for all, including in our national parks, and work to ensure that this is safe and appropriate, leaving a legacy for generations to come.
Baroness Miller of Chilthorne Domer (LD)
My Lords, I thank the Minister for her Answer. I am glad she recognises how courageous the Dartmoor National Park Authority was in defending the public’s right to wild camp or backpack camp on Dartmoor. She will know that it took years of good practice, developing a camping code and maps of where camping took place, and working with landowners and stakeholders to arrive at a very happy solution for both the public and just about all the landowners. Will the Government build on this good practice to make good on their promise to extend countryside access? Will they use Dartmoor’s experience to enable other national park authorities and national landscapes to offer what is a truly magical experience of camping out under the stars and being awakened by larks?
Baroness Hayman of Ullock (Lab)
I wonder what kind of larks the noble Baroness envisions; she makes wild camping sound very exciting. She asks a very important question. The Government currently have no plans to extend wild camping as a guarantee in other national parks. Every national park is different, so it is important that each one can decide for itself what is appropriate in its area. Wild camping may be illegal, but in some national parks it is allowed where appropriate. For example, in the Lake District, which I know best, people are allowed to camp above the highest wall and stay for one night; they have to make sure that they leave no mess. That works very well. In addition, as we discuss this, we need to be very clear about what we mean when we discuss “wild camping” and “illegal camping”.
Lord Jopling (Con)
My Lords, in considering this matter, would the Government kindly remember that the lack of understanding of the meaning of, and rights under, wild camping is likely to be comparable to the lack of understanding of the meaning of national park? When I represented the southern part of the Lake District in another place for 33 years I lost count of the number of complaints I got about visitors who thought that national parks meant that they could set up their tent and cook their breakfast in anybody’s garden that they happened to pass.
Baroness Hayman of Ullock (Lab)
This is exactly the point I was making about the difference between wild camping and illegal camping. I walked my dog at Ennerdale Water this weekend, and there were clear signs saying, “No camping, no fires”. Yet, as I walked along the lake, there were two tents. This is a real problem because these people often do not respect the environment that they are in. It is important that, while we encourage camping in the right areas and wild camping where it is appropriate, we also ensure that does not cause any damage to the environment or problems for landowners.
Lord Swire (Con)
My Lords, as someone who enjoys larking around Dartmoor as much as possible, I can attest to the fact that it is a very finely balanced ecosystem. We will all be aware of the excellent work being done by the Prince of Wales and the Duchy of Cornwall in trying to regenerate some of the upland areas of the moor. Although I fully support responsible wild camping, unfortunately the same cannot be said for irresponsible wild camping. That was a particular problem in many national parks and lochsides across the country during Covid. Does the Minister agree that the Government must do everything they can to ensure that legislation and advice, such as that given by the Dartmoor National Park Authority on how to behave on the moor, is rigorously adhered to?
Baroness Hayman of Ullock (Lab)
As I said, it is a real problem. The noble Lord mentioned Covid, and the amount of rubbish left behind by illegal campers then was shocking. People abandoned their tents and all their rubbish. Who does the clean up? It is the National Trust, the national parks and the general public. He is absolutely right that this is not acceptable. However, at the same time, we have to recognise that some people camp very responsibly, in the right places and in the right way—and Dartmouth is an excellent example of that. As we develop our access strategy and promote the Countryside Code, which is also important, we will take all this into account.
Lord Blencathra (Con)
My Lords, I do not have strong views on wild camping; like the Minister, I am content with it as long as it does not damage the environment, the landscape, private property or farmers’ fields, and every national park has the right to decide about it locally. However, I have very strong views on people lighting fires in the countryside, whether they are camping, picnicking or just visiting. Fires in national nature reserves and moorland do enormous damage, such as destroying one-third of the magnificent Thursley Common nature reserve in 2020. They do not happen spontaneously because of global warming; in every case, people have caused the fires by discarding cigarettes or disposable barbecues. Accessing the countryside is one thing but no one has a God-given right to set fire to it with barbecues. Will the Minister give full support to all national parks, national nature reserves and Natural England by encouraging organisations and landowners to ban the use of disposable barbecues in the countryside?
Baroness Hayman of Ullock (Lab)
The noble Lord makes a very good point. I mentioned walking my dog at Ennerdale Water, where there are signs saying, “No fires”. Yet, I regularly walk along the lake and see clear evidence of people lighting fires and even chopping down saplings to try to light those fires. We need better understanding around responsibility in the countryside.
Local authorities currently have powers to ban the use of sky lanterns or disposable barbecues if they so wish. Existing powers in legislation can be used to regulate the lighting of fires in national parks and protected national landscapes. We also have the “respect, protect and enjoy” code around wild camping, which would include fires. With the dry summers we are seeing, it is becoming much more of an issue. The irresponsible use of disposable barbecues is particularly worrying; we know that we have had fires in the countryside because of them.
Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)
We will hear from the noble Baroness, Lady Grender, first, and then from the noble Lord, Lord Mackenzie.
Baroness Grender (LD)
My Lords, given Labour’s manifesto commitments to improve responsible access to nature and enhance community rights to green space, can the Minister clarify what specific changes we can expect in the law and whether the rumours of a Green Paper are true? If they are not, can the Minister tell us why the opportunity of the Planning and Infra- structure Bill has not been used to deliver on those promises in order to overcome some of the persistent barriers for people in accessing the outdoors?
Baroness Hayman of Ullock (Lab)
We are extremely keen to increase access to nature; I am particularly keen to improve access for those who are the most disadvantaged in their ability to access it, whether that is through distance, culture or whatever. We are doing a lot of work. I have an excellent team working on the access policy at the moment. We are working extremely hard to come up with good access policies, including the national river walks, the new national forests and the other work that we are doing, in order to deliver on that promise.
Lord Mackenzie of Framwellgate (Non-Afl)
My Lords, would it be important in these circumstances to arrest people for loitering with intent?
Baroness Hayman of Ullock (Lab)
I think that that would be a matter for the police and the Home Office.
Lord Harlech (Con)
My Lords, I declare my farming and land management interests in Wales. Last year, mountain rescue services in England and Wales were called out to an incident every single day; in Scotland, they were called out more than 1,000 times during the year. Can we—pardon the pun—proceed with caution on any scope to widen public access in our national parks?
Baroness Hayman of Ullock (Lab)
I hear what the noble Lord says. I have friends in mountain rescue. I bumped into one of them at the weekend; they had been particularly busy. The important thing is that the people who call out mountain rescue are often completely and utterly ill equipped for what they are doing. That seems the biggest problem. Mountain rescue is there to help people who get into trouble. If you have fallen and broken your ankle or there is a particular problem, that is absolutely what it is there for, in the same way as any other emergency service. To be blunt, the people who try to climb mountains in flip-flops and without proper maps—we have had this in Cumbria, believe it or not—are the ones who really need our attention, shall we say.
Child Sexual Abuse and Rape Gangs Inquiry
(1 day, 4 hours ago)
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Baroness Hazarika
To ask His Majesty’s Government what plans they have to ensure the statutory inquiry into child sexual abuse and rape gangs is conducted swiftly and does not delay justice for victims.
The Minister of State, Home Office (Lord Hanson of Flint) (Lab)
The Government are determined to root out the horrific crimes of grooming gangs and to secure justice for victims. We have accepted the 12 recommendations made by the noble Baroness, Lady Casey, including the recommendation to establish a national inquiry under the Inquiries Act. The inquiry will be time-limited and will have statutory powers to direct targeted investigations into local areas, with the aim of holding institutions to account for current and historical failures in their response to group-based child sexual exploitation.
Baroness Hazarika (Lab)
I thank my noble friend the Minister for his Answer. I welcome this inquiry. I just want to say that, as a Muslim woman, I apologise profoundly for what these wicked men have done to white, working-class girls. Many of us feel deeply ashamed. Let us not call them “grooming gangs”; these are rape gangs that operated on an industrial level. I hope that the inquiry will hear the voices of Muslim girls who were also abused by these animals.
The Minister talked about a time limit. Could the inquiry be capped at two years, because justice delayed is justice denied? Given the public interest, will this inquiry be televised? Finally, given the incredible work that the noble Baroness, Lady Casey, has done, can she be appointed as the chair of it because, in a world of appalling systemic failure, she is the only public figure whom many victims trust?
Lord Hanson of Flint (Lab)
I am grateful to my noble friend, and I place on record from this Dispatch Box my thanks to the noble Baroness, Lady Casey, for the 197-page report that she presented, on the Government’s request, in the five months since January of this year. My noble friend asked about the timescale for the inquiry. The noble Baroness, Lady Casey, indicated that it would be around three years. I would like to see it speeded up, but we have to discuss that matter with the potential chair of the inquiry. The Government intend to try to recruit the chair of the inquiry as a matter of some speed, and we are in the process of doing that now. The noble Baroness, Lady Casey, herself, is now going to be engaged in a further report, but we will appoint a chair as soon as possible.
As to the matter of televising the proceedings, again, if my noble friend will bear with me, that will be a matter for discussion with the chair to determine. We want to ensure that we take action speedily on this issue, which is why we have accepted all 12 recommendations, and why the 11 that are not related to the national inquiry will be implemented in very short order by this Government.
Lord Jack of Courance (Con)
Will the grooming gangs inquiry include Scotland, and, if not, why not?
Lord Hanson of Flint (Lab)
The grooming gangs inquiry is looking at all areas of the United Kingdom. We have a responsibility in the Home Office for England and Wales, but it is important that we consult and discuss with devolved Administrations, because there are 500,000 victims of child abuse across the United Kingdom; 100,000 of those are related to child exploitation; and our job is to reduce the number of victims and hold those perpetrators to account.
Baroness Brinton (LD)
My Lords, the report of the noble Baroness, Lady Casey, shows years of inaction by Governments and many different authorities in the past, despite victims’ brave whistleblowing. Now is the time to right the wrongs. How do the Government plan to put victims at the heart of the national inquiry, in particular so that they do not have to repeat their existing testimony again and again? Much of it has already been covered in inquiry reports and court cases.
Lord Hanson of Flint (Lab)
I am grateful to the noble Baroness. She will know that the IICSA report under Alexis Jay was involved for seven years in looking at this very issue and made 20 recommendations to the Government three years ago. The then Government did not act on any of those recommendations. We have picked up the recommendations since July last year and are now implementing those recommendations. The further recommendations that the noble Baroness, Lady Casey, has brought before the House and the Government are now on a programme for implementation, including the national inquiry. I think it is important that the incoming chair, whoever he or she may be, has an opportunity to reflect on the previous product of victim testimony and determine what to do with that product and how best to involve victims in future. It is important that victims have their say and that the outcome of this is action to prevent future victims.
Lord Singh of Wimbledon (CB)
My Lords, if a medical threat occurs, we tend to find and pinpoint the cause. If there is a threat to social health, we tend to camouflage the cause of the concern. An example is the use of the term “Asian grooming gangs”, which was prevalent at one time. I pointed out that it was about as helpful as saying that “Europeans” were responsible for the Holocaust. We need to pinpoint the actual cause. Ethnicity, now talked about, has a subset, religion, and there are dated texts embedded in religious texts that have very negative attitudes to women. It is time that those were exposed and brought up to today’s more enlightened times.
Lord Hanson of Flint (Lab)
One of the key recommendations from the noble Baroness, Lady Casey, is to ensure that we have some ethnic minority data monitoring on offenders who have committed those offences. Some police forces have collected that, and some have not. We are accepting the recommendation, and we will be issuing guidance to police forces on collecting ethnic data. There are a range of people who abuse; there is a focus on grooming gangs from particular communities, but I say to the House that, in every particular community—white, Asian, Muslim and others—members of the community commit offences. We should not ignore the fact that people from a range of ethnic backgrounds commit offences; what we should be doing is monitoring it.
Baroness Sanderson of Welton (Con)
My Lords, I appreciate that the Minister says that they are already looking for a chair. It is an interesting new model from the noble Baroness, Lady Casey. How long do the Government anticipate it will take to set up that new independent commission and set its terms of reference before its actual work starts?
Lord Hanson of Flint (Lab)
I am grateful to the noble Baroness. We are trying to do that as quickly as possible. I cannot give a definitive date, but if I say to her that we want to get this started as quickly as possible, I hope she will understand that I am trying to do that. I will report back to this House in due course when that is possible to do.
Lord Davies of Gower (Con)
My Lords, as has already been alluded to, our foremost priority must be to those who have suffered so badly, to ensure that their voices are not only heard but placed at the centre of our next steps. Justice must be delivered, and it must be delivered swiftly. Can the Minister therefore outline what specific steps the Government are taking to support victims at this stage? In particular, how do they intend to ensure that any investigation is thorough and timely, with particular reference to those in authority who have failed the victims so far, and that the investigation truly reflects the urgency and seriousness that the noble Baroness, Lady Hazarika, has rightly emphasised?
Lord Hanson of Flint (Lab)
One of the key recommendations from the noble Baroness, Lady Casey, was that we review convictions of victims and look at how victims have experienced the system. We have accepted that recommendation in full, and we will be bringing forward measures in the Crime and Policing Bill very shortly, which is finishing its progress in the other place this very day. It will be with this House, at least for Second Reading, before the Summer Recess, I hope. We will have amendments to that Bill in Committee stage that will deal with victim support.
Lord Mohammed of Tinsley (LD)
My Lords, I welcome the Casey review, but I urge the Government to take every opportunity possible to implement Alexis Jay’s recommendations—not only in the policing Bill but in the Bill already in this House, the Children’s Wellbeing and Schools Bill. There are opportunities in there that we can implement in those Bills. The victims of those horrific crimes cannot wait any longer. This Government and this House should be leading that fight to get justice for those victims of rape gangs, which existed right across the country.
Lord Hanson of Flint (Lab)
The noble Lord is absolutely right, which is why, when this Government came into office in July last year, we looked at the Alexis Jay recommendations, determined that no action had been taken for the previous 20 months on those and determined to take action on them. That is why, in the Crime and Policing Bill, the Children’s Wellbeing and Schools Bill and other measures that we have brought forward, we have met every recommendation in that report, and we will make sure they are implemented in full.
Baroness Armstrong of Hill Top (Lab)
My Lords, following the grooming gang trial in the north-east, in Newcastle, the safeguarding committee said that one of the institutions that needed to be looked at was how the court undertook the trial, and that cross-examination had been used as another weapon against the young women. I met and talked with those who had supported the young women before and during the trial, because the charity I chaired had taken that job on, and they were horrified at how the young women had suffered yet again during the trial. Can we begin to think about how we look at these trials and the cross-examination that the young women are put through?
Lord Hanson of Flint (Lab)
I am grateful to my noble friend. I think it is very important that we recognise that the experience of victims in giving evidence, particularly when faced with their perpetrators, is extremely traumatic. We should be ensuring that we make the court procedure as smooth as possible. There are no recommendations in the report from the noble Baroness, Lady Casey, about that particular issue, but I will take back my noble friend’s comments and discuss them with the Ministry of Justice. If other Members wish to continue questions on this today, this is the hors d’oeuvre for a Statement at 7.30 this evening, when other contributions will be welcome.
Medical Devices and Blood Safety and Quality (Fees Amendment) Regulations 2025
(1 day, 4 hours ago)
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Baroness Merron
That the draft Regulations laid before the House on 3 April and 29 April be approved.
Relevant documents: 23rd and 25th Reports from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 17 June.
Employment Rights Bill
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Lord Hunt of Wirral
“with the three-year period resetting three months after any general election.”Member’s explanatory statement
This amendment seeks to ensure that a new government would not be held to the labour market enforcement strategy of a predecessor government for up to three years.
Lord Hunt of Wirral (Con)
My Lords, in moving Amendment 271ZZA, I will also speak to Amendments 274 and 278, standing in my name.
Clause 91 requires the Secretary of State to set out a plan for enforcing labour market legislation over a three-year period. However, as currently drafted, Clause 91 lacks the flexibility necessary to reflect changes in government and political leadership. As the Minister will be aware, Clause 91(1) places a statutory duty on the Secretary of State to publish a labour market enforcement strategy
“before the beginning of each relevant three-year period”.
Subsection (6) then defines those periods as
“beginning with the next 1 April after the day on which this section comes into force”
and every successive three years thereafter. At first glance, that may seem entirely sensible, but let me explain why it creates a democratic and practical problem that our amendment seeks to fix.
Suppose, for example, this Bill passes this year, in 2025. Under Clause 91(6)(a), the first strategy would need to be published before 1 April 2026 and it would then run until March 2029. Now, imagine a general election takes place in 2027—entirely plausible, perhaps even probable. That would mean that a new Government taking office in 2027 would be bound by a strategy formulated and published by a previous Administration, with potentially very different political priorities, until well into 2029. I suggest to the Government that this is neither democratic nor desirable.
Labour market enforcement is not a neutral administrative matter. It involves clear policy choices about which sectors to prioritise, what level of inspection and enforcement to undertake, what approach to take with non-compliant employers, and how to engage with trade unions, businesses, regulators and workers. These are not technocratic decisions. These are matters of political judgment. They ought to reflect the democratic mandate of the day.
Our amendment is, therefore, straightforward. It would insert into Clause 91(6) a provision that the relevant three-year period should reset three months after any general election. This would provide any new incoming Government with a short period—not an immediate obligation—in which to consult the advisory board and prepare a revised strategy, only if they wish to do so. It would not force a change of strategy; it would simply enable one at a more appropriate and timely moment.
Amendments 274 and 278 together seek to inject evidence, accountability and proportionality into the Government’s proposal to establish a single labour market enforcement body under this legislation. These are not abstract or procedural concerns; they speak directly to the credibility of this legislation and the consequences it will have for workers, businesses and the rule of law in the labour market. We are therefore being asked to approve a significant structural reform—the consolidation of multiple specialist enforcement agencies into a single, central body—without a clear estimate of how much it is all going to cost and without a rigorous analysis of whether it will improve enforcement outcomes.
The idea that such sweeping institutional change could proceed without a public, detailed cost-benefit analysis should give us all pause for thought. The creation of a new enforcement authority is not merely a matter of administrative reorganisation; it involves physical premises, staff transfers, IT infrastructure, the legal realignment of enforcement powers, data-sharing agreements, and the re-establishment of everything, from complaints mechanisms to enforcement protocols.
All of this will come at considerable financial and operational cost, yet no such cost has been published, nor can it be debated. It is absent. This is particularly concerning given that we have seen similar government reforms in other domains—such as the establishment and eventual dismantling of the UK Border Agency—go badly awry, not for lack of ambition but for lack of foresight and planning. An effective enforcement agency cannot simply be declared into being. It has to be built carefully, deliberately and on the basis of hard evidence.
That is why Amendment 274 requires the Secretary of State to lay before Parliament a detailed cost assessment. We understand that the Government’s broader agenda includes a desire to reduce inefficiency and waste in the public sector. That is a principle all sides of this Committee would support. We would not, and I hope the Minister would not, wish to see the creation of another bloated agency duplicating functions and budgets and wasting taxpayers’ money under the guise of reform. Without clear planning, the risk is precisely that a new bureaucracy, with vague lines of accountability, an unclear mandate and spiralling costs fails to deliver better outcomes for workers and businesses.
Baroness Lawlor (Con)
I support the lead amendment in this group in the name of my noble friend Lord Sharpe of Epsom to exempt a new Government, for up to three years, from the labour market enforcement strategy of their predecessor for the reasons set out so ably by my noble friend Lord Hunt. I also support Amendments 274 and 278 for a new clause after Clause 140 to review the effectiveness of enforcement and compliance with relevant labour market requirements as in Part 1 of Schedule 7 before the new agency is set up and for the costing of such a new body before it is set up.
The new fair work agency proposed by the Bill to bring together existing functions of enforcement is unknown territory. Today, to enforce a limited number of employment rights, official powers are used by four different agencies: the Gangmasters and Labour Abuse Authority, the Employment Agency Standards Inspectorate, HMRC and the Health and Safety Executive. The proposed new fair work agency bundles these—and new responsibilities under the Bill—into a single, untried and untested body. In general employers are quite familiar with HMRC and HSE, which provide advice as well as having enforcement functions. At the moment, we have the benefit of experienced bodies with whom employers are familiar and an ability by each body to be precise and knowledgeable about the subject on which it is an enforcement officer. We also have the advantage of different horses for different courses. Now, the plan is to move to an unknown, inexperienced entity with all the start-up costs that entails and without the precision focus which the present bodies have, because what is proposed is a one-size-fits-all model.
The enforcement of the laws will be differently framed with different aims by the current bodies. GLAA will have a different focus to that of HMRC, although some of the functions may overlap. I therefore suggest, in the interest of the taxpayer, that there is a need for a costing of the new body before it is set up and for a review of the effectiveness of the outcomes of present arrangements for enforcement and compliance to see how they stack up. This should be done before any steps are taken to put in place a new body. For these reasons, I heartily support Amendments 274 and 278.
Lord Jackson of Peterborough (Con)
My Lords, I wish to speak on the issue of the labour market enforcement strategy in support of Amendment 274 to which I have appended my name and to build on the excellent remarks of my noble friend Lord Hunt of Wirral and the specific points raised by my noble friend Lady Lawlor. For transparency, I declare that I have been a member of the Chartered Institute of Personnel and Development for more than 20 years. The CIPD estimates that the People Skills HR support service which it has mooted, working with ACAS, would cost about £13 million under the new regime when this Bill becomes an Act. We already know, following on from my noble friend’s comments, that the cumulative cost of the existing bodies doing similar work, with analogous workstreams, is about £40 million.
Amendment 274 is important because in this country we have a strange anomaly. Unusually for an advanced country, we generally do not put the architecture of scrutiny and oversight in primary legislation. I want to know how this agency is going to be accountable in terms of the costs, who it employs, its policies et cetera. No doubt the Minister will say, “Well, once it becomes an Act, there will be what was the Business Select Committee, or there might be the National Audit Office, or there might be the Public Accounts Committee”. But we are being asked to sign a blank cheque for this without knowing how precisely this agency is going to operate and, most fundamentally, at what cost. We have not seen a detailed impact assessment focusing on the work of this body. On that basis, I ask the Minister specifically how he sees the process of accountability working and whether there will be any work by his department, and Ministers more generally, to work out what the costs are likely to be.
I accept at face value that this Government are committed to reducing the regulatory burden, particularly on small and medium-sized enterprises. I am sure the noble Lord, Lord Leong, will bend the Minister’s ear on that, having come from the background that he came from as a champion of small businesses from the Labour side. It is therefore not unreasonable for us to ask what the cost will be and how we will be able to hold this agency to account once it is established.
Baroness Coffey (Con)
My Lords, Amendments 277 and 328, which I expect the noble Lord, Lord Goddard of Stockport, to speak to shortly, are an interesting element. Amendment 277 talks about the review of the fair work agency. Considering that a number of questions have come up about this, that is a fair assessment, given that there is still a considerable amount of consultation to be done. Amendment 328 would basically strip out the commencement of any part of the Act until that review has been done and
“a Minister of the Crown has tabled a motion in both Houses of Parliament for debate … and the review has been approved by a resolution”—
not just regulations.
The reason I say this is that I continue to assert that some of the powers here are going to be novel. Even if the Equality Act 2006 may give powers to the EHRC, it has never used them to institute legal proceedings, only as an intervener or for judicial review, rather than taking on individual cases; I am conscious that there is a consultation there. The amendment from the Liberal Democrats is an interesting way to think about how we are looking at the details of what the new agency is going to do.
Lord Goddard of Stockport (LD)
My Lords, before I begin my comments about the various amendments, I have news from afar. Councillor Fox—sorry, not councillor; that is going back a bit. My noble friend Lord Fox wants to pass on his thanks to Members of the House from all sides who have sent best wishes for a speedy recovery. I signed his card today from the Lib Dem group with the sentiment, “Don’t hurry back. I fully enjoy sitting until midnight doing the employment Bill on your behalf”—which I think, with my noble friend’s irony, he will get. His amendments would require detailed review of the fair work agency’s remit, funding powers and accountability structures, and parliamentary overview before commencement.
We are fairly neutral on Amendments 271ZZA, 274 and 278 from the noble Lord, Lord Sharpe, which aim at transparency and reviews. They are broadly procedural, but I have some sympathy with the noble Lord’s three-year review, which could be quite sensible. He explains those two amendments with clarity and brings out the blindingly obvious—the lack of cost and the lack of understanding of how this thing will be set up and work in reality.
I intend to ask the Minister some direct questions as well as supporting my noble friend Lord Fox’s amendments regarding the implementation plan, the opportunity for scrutiny and further consultation. First, I turn to what the noble Baroness, Lady Coffey, has been talking about, the fair work agency. We debated its creation and power across several earlier groups and I will not labour that point today, but I want to speak clearly in support of Amendments 277 and 328 tabled by my noble friend Lord Fox, and again place on record my regret that he is not able to be with us today. These amendments are central to establishing a credible and accountable agency. Amendment 277 would require a full review of the agency’s remit, powers, funding and relationship with other enforcement bodies, and would be subject to review, as the noble Lord has said. Amendment 328 would link the commencement of the Act to that process.
Lord in Waiting/Government Whip (Lord Katz) (Lab)
My Lords, I thank the noble Lords, Lord Sharpe of Epsom and—in absentia—Lord Fox, for tabling Amendments 271ZZA, 274, 277, 278 and 328. Before I go any further, I think we all join the noble Lord, Lord Goddard, certainly from our Benches, in wishing the noble Lord, Lord Fox, the very best and speediest of recoveries. We hope to see him back in his place at the earliest opportunity.
I will speak first to Amendment 271ZZA moved by the noble Lord, Lord Sharpe of Epsom. This amendment is unnecessary, as Clause 91(3) provides full discretion for the Secretary of State to revise the labour market enforcement strategy at any time, including following a general election. That means that a new Government are not locked in. They can act swiftly, decisively and in line with their mandate. Were the party opposite to win power again sometime in the distant future, however difficult that is to imagine, its hands would not be tied by these proposals.
Of course, businesses, workers and enforcement bodies all benefit from clarity, consistency and strategic continuity. Automatically scrapping an enforcement strategy, just as the Government are finding their feet, risks creating exactly the kind of disruption we should be avoiding. To reassure the noble Lord, Lord Hunt of Wirral, the Bill is about strengthening our ability to tackle non-compliance and exploitation in the labour market, including, in the very worst cases, the scourge of modern slavery. The intention and mandate of the fair work agency are to catch the bad actors, not to trip up the good guys. This amendment risks instability rather than accountability.
Turning to Amendments 274, 277, 278 and 328 tabled by the noble Lords, Lord Sharpe of Epsom and Lord Fox, I want to be absolutely clear that the Government are committed to effective, transparent enforcement of workers’ rights. The creation of the fair work agency is a major step forward and we want to get it right, but these amendments are wholly unnecessary, duplicating myriad reports and recommendations over several years. By our count, there have been 33 government reports and strategies about the effectiveness of labour market enforcement over the past nine years. One could argue that this subject has been reported and scrutinised to death. The Director of Labour Market Enforcement produces an annual report and strategy that reviews the effectiveness of the labour market enforcement system. These documents are available in the Library of the House.
Additionally, our impact assessment for establishing the fair work agency sets out the current running costs of the enforcement bodies and initial estimates of set-up costs for the agency. I also refer noble Lords to reviews published by previous Administrations, including the Taylor review, which assessed the labour market enforcement system and found it wanting.
Ongoing oversight of employment rights enforcement is provided for in Clauses 91 and 92. They require the Secretary of State to publish a three-year labour market enforcement strategy and annual reports, which must be laid before Parliament and the Northern Ireland Assembly. To address the question of the noble Lord, Lord Jackson of Peterborough, they will be subject to parliamentary scrutiny in the usual way, which could well involve scrutiny by a Select Committee in the other place.
While the Bill does not explicitly require that the enforcement strategy and annual report address the agency’s funding, I can confirm to the Committee—and to the noble Lord, Lord Jackson, in particular—that the annual report will indeed include an assessment of the fair work agency’s budget and how this has been spent.
Turning to Amendment 328, establishing the fair work agency is not and should not be contingent on its reporting. I remind all noble Lords, particularly the noble Baroness, Lady Lawlor, that this was not only a Labour Party manifesto commitment; it was the policy of all the major parties at the general election to introduce a single enforcement body in some shape or form.
Baroness Lawlor (Con)
Just because one side of the House or the other—or, indeed, both—brought it in does not necessarily mean it is the right policy. Does the Minister not agree that, if we have a chance to review some of the weaknesses in inherited policy, it is a very good time to do it? The 2017 Taylor review, on which some of the then Government’s policy was based, focused particularly on the most vulnerable workers and certain categories. It was not a very wide focus.
Lord Katz (Lab)
We have had a fair amount of scrutiny of the wider proposal, rather than the Bill’s specific fair work agency proposals. As I said, over the past nine years since 2016, there have been 33 different strategies and reports, including—but certainly not limited to—the Taylor report. This is not an area that has not been considered and scrutinised to some degree. I also say to the noble Baroness that the Single Enforcement Body—as it was called by the previous Administration—was the policy of successive Conservative- led and Conservative Administrations. I am not going to intrude on the great policy disagreements on that side of the House. We feel it important to establish the fair work agency and to ensure that we have strong enforcement of labour market regulations. I therefore ask the noble Lord to withdraw Amendment 271ZZA.
Lord Hunt of Wirral (Con)
My Lords, this has been a very significant debate, because I believe it is the first time I have heard from the Government Front Bench an acceptance that the Opposition will eventually take over government again. He and I may disagree on when this will happen—of course we disagree: I just happen to believe that it is going to happen at the next general election. That is why these amendments are so important.
I also want to say how much we miss the noble Lord, Lord Fox. I was very disturbed indeed to hear about his unfortunate accident, but I am very pleased to hear that he may shortly be with us. I hope that, by speeding up the process to Report in July, he will still be able to be with us, because he has always brought a note of common sense—despite coming from the Liberal Democrat Benches. Now I am upsetting everyone. All I want to say to the noble Lord, Lord Goddard of Stockport, is that he has been a marvellous substitute, if one can say that. His pragmatic approach to the Bill has been enormously valuable, but we do miss the noble Lord, Lord Fox.
I thank my noble friend Lady Lawlor, who is quite right: we are moving into unknown territory. Although the Minister might remind us that the Conservative Government were committed to looking at stepping in this direction, we are still moving into unknown territory and, as my noble friend Lord Jackson of Peterborough pointed out, the CIPD cost estimates are really worrying. I do not think the Minister properly addressed his key question on the whole issue of accountability.
However, here we are. I am surprised that the Government have rejected Amendment 271ZZA. It is a reasonable and pragmatic amendment that simply recognises the basic democratic principle that a new Administration should have the ability to review and, if necessary, revise a labour market enforcement strategy to reflect new economic realities and public priorities. Despite the amendment to which he referred—which is at the margin—the Government have always insisted that a labour market enforcement strategy must run its full term without reset, regardless of elections or changes in government. But why should a new Government be bound by a strategic direction set by their predecessor? That is not consistent with the democratic mandate bestowed on any incoming Government. Surely it is neither logical nor democratic to compel a newly elected Government to implement a strategy they did not design, especially in a labour market that is dynamic and constantly evolving.
Economic landscapes can shift dramatically within short periods, whether due to international events, technological change or domestic challenges. Flexibility to adjust enforcement priorities accordingly is essential. It is not only a question of governance, but of ensuring that enforcement remains effective and responsive to current labour market conditions. The Government have already recognised the importance of periodic review and the resetting of the labour market enforcement strategy every three years, as set out in Clause 91. If I am not mistaken, that periodicity is built into the framework precisely to ensure that the strategy remains relevant and responsive.
The main feature of this debate has been the cogent arguments put forward by the noble Lord, Lord Goddard of Stockport. His insights, and those of my noble friend Lady Coffey, highlight the pressing need for a substantive independent review of the proposed fair work agency. While the promise of increased efficiency in enforcement is welcome, we must remember that there are intentions and then there are results. We must understand how such efficiency will be achieved and at what cost, what other alternatives were considered, and why they were rejected.
To date, the Government have not committed to publishing any specific details about the establishment of the fair work agency—details that are crucial for proper scrutiny. We lack clarity on the expected costs of this new body, the standards by which compliance will be measured and the criteria that will guide enforcement decisions. Without that transparency, it is difficult to assess whether the creation of this body will represent genuine progress or simply add another layer of bureaucracy, which, as the noble Lord, Lord Goddard of Stockport, stressed, will impinge on smaller businesses in particular.
There remains much to discuss and questions to be answered about the fair work agency. Unfortunately, I find myself unconvinced by the Government’s arguments against the amendments proposed by myself and the noble Lord, Lord Goddard of Stockport. Our proposals are not about obstruction but about ensuring proper oversight, accountability and flexibility in this important area of labour market governance. I am sure that we, and the Liberal Democrats, will return to these issues on Report, but for now, I beg leave to withdraw the amendment.
Lord Sharpe of Epsom
Member’s explanatory statement
This amendment seeks to ensure that any ‘fishing expedition’ actions of enforcement officers enabled by subclause (a) are limited to the most serious breaches, thereby preventing a broad expansion of an enforcement officer’s ability to enter business premises to include entering at any point to check on minor matters.
Lord Sharpe of Epsom (Con)
My Lords, in moving Amendment 271ZB I will speak also to Amendments 271ZBA, 271ZD and 273LA in my name. Amendment 271ZB ensures that the powers being granted to enforcement officers under this part of the Bill are used proportionately and only in response to the most serious breaches of labour market law. Without this amendment or something very much like it, we risk handing enforcement officers sweeping powers to enter business premises with very little constraint.
As currently drafted, Clause 94(1)(a) grants enforcement officers the authority to “enter any premises” for “any enforcement purpose”. That is an extraordinarily broad power. This amendment would limit such warrantless powers of entry to those paragraphs of Schedule 7 that deal with the most serious forms of labour market abuse, namely child labour offences, the failure to pay the minimum wage, unlawful deductions from wages and exploitation through forced labour. These are the areas where strong enforcement action is absolutely justified.
However, is it appropriate that the same powers—entry without warrant or consent—could be used to check whether someone forgot to keep a copy of an employment agency contract on file or perhaps miscalculated a payslip by a few pounds? We must not lose sight of the bigger picture. The vast majority of employers want to comply with the law; they invest time and money in doing so. However, if we allow overly broad enforcement powers, we risk creating an atmosphere of distrust, regulatory overreach and disproportionate intrusion, particularly into smaller businesses which may not have the resources to constantly defend themselves against investigatory overkill. The Government say they want better enforcement, and so do we, but good enforcement is not the same as unchecked enforcement.
Turning to Amendment 271ZBA, as currently drafted, Clause 95 restricts the power to enter dwellings to those occasions where a warrant is issued by a justice. This is a well-established and necessary safeguard, reflecting the heightened privacy interests we attach to a person’s home, but there is a conspicuous gap in the safeguards applying to entry into non-dwelling premises, such as business premises, offices or other places of work.
Clause 94 grants enforcement officers wide powers to enter any premises for enforcement purposes, without the same explicit requirement for a warrant or judicial authorisation, unless it is a dwelling covered by Clause 95. This gap means that, unlike the protections for residential premises, business premises can be entered and searched by enforcement officers without prior judicial approval. This is a significant and unwarranted imbalance. The intrusion into a business, especially a small or medium enterprise, is a serious matter. Entry and seizure powers can disrupt operations, damage reputations and create an atmosphere of suspicion.
That is all quite apart from the rather sinister nature of this power. For many small businesses, their premises are their livelihoods. The difference between a home and a business may be one of degree, but the right to protection from arbitrary state intrusion should be similarly robust. Judicial oversight ensures that these powers are used only when there is a legitimate and evidenced basis for entry, and it prevents abuse or overreach.
The requirement for a magistrate to authorise a warrant is a safeguard that protects due process, proportionality and the rule of law, and is of course very well established. It requires that enforcement officers demonstrate reasonable grounds and the necessity for the warrant. That is not a bureaucratic hurdle; it is just a check that balances the state’s legitimate enforcement interests with individual and business rights.
On Amendment 271ZD, as it stands, the appeal process focuses primarily on the accuracy of the sums claimed or the penalties imposed. It is essential that underpayments and penalties are correctly calculated and justified, but this narrow scope overlooks a critical element: the manner in which enforcement powers are exercised.
Enforcement officers hold significant authority when issuing notices, including entry, inspection and seizure powers. However, these powers must be exercised lawfully, proportionately and with respect for those affected. This amendment allows tribunals to consider whether enforcement officers have acted beyond their legal authority or used their powers excessively or unfairly. It further empowers tribunals to cancel or vary notices where misconduct or disproportionate enforcement is found and to award compensation as appropriate. This is not only a matter of protecting businesses and individuals from overreach but is vital to maintain public confidence in the enforcement regime. When enforcement is perceived as fair, transparent and accountable, compliance will improve and the number of disputes will reduce.
On Amendment 273LA, at this stage, the Bill does not define who enforcement officers are in any detail—we started this discussion on Monday—nor does it set any clear limits on the powers they may exercise when carrying out their functions. This lack of clarity is deeply concerning, especially given the serious nature of the enforcement powers being proposed, which include entry, inspection and seizure of documents and property. It is vital to establish unequivocally that enforcement officers, who are not police offices and do not have the training or mandate of the police, must not be allowed to use physical force or authorise others to do so. The use of force is an extreme measure that can be justified only in very specific and regulated circumstances, and generally only by trained law enforcement personnel. The amendment simply ensures that enforcement officers cannot resort to physical coercion, which is not appropriate for officials tasked with regulatory enforcement in the labour market. That is a matter of basic human rights and dignity. It is also a safeguard for businesses and individuals who may otherwise be subject to intimidation or physical harm.
I have absolutely no doubt that Ministers on the Government Front Bench have no interest in physical coercion being a part of these powers. In that case, they should accept this amendment because, if they do not, the implication is clear: they accept that physical coercion is acceptable. I do not believe that is what they want and I beg to move.
Baroness Lawlor (Con)
My Lords, I support the amendments in the name of my noble friend Lord Sharpe. I declare an interest as a director of a very small business—a think tank.
As an employer, the idea that we have no warrant or judicial oversight of an enforcement officer’s intrusive visit to a business to seize or take copies of documents and to check up is intrusive on the time and output of the business. It is also an infringement of a business freedom to conduct the business to the best ability of those in the office or the business.
Both clauses in fact contain very intrusive proposals. As my noble friend pointed out, one of the things that is deeply worrying about them is we do not know who the enforcement officers will be or exactly what their powers will be. We have seen, even with the best trained police force in the world, the Metropolitan Police and local police forces, a certain amount of over-zealousness in pursuing certain types of crime. Therefore, with an untrained and unknown quantity and with such powers, we need very clear limitations, and we need to focus on the most serious crimes and those outlined in these amendments. For those reasons, I support both the amendments in the name of my noble friend.
Lord Katz (Lab)
My Lords, I thank the noble Lord, Lord Sharpe of Epsom, for tabling amendments relating to the fair work agency’s powers. Clause 94 introduces a single power to enter business premises and inspect workplaces. The noble Lord’s Amendment 271ZB would limit this power to such an extent that effective enforcement of the legislation, including the national minimum wage, would be extremely difficult. We are not amalgamating labour market enforcement into one single agency to diminish its effectiveness. This amendment would, in effect, prohibit the site visits that most minimum wage investigations rely on and bring an end to a system of state enforcement that has worked well for 25 years. The result would likely be an increase in claims to the employment tribunal. Given the noble Lord’s concern about employment tribunal capacity, I urge him to withdraw his amendment.
I turn to Amendment 271ZBA. While powers of entry are generally exercised on a consensual basis, in some situations it is critical that officers are able to carry out their duties quickly, particularly if they suspect that giving advance notice could give rogue employers time to destroy or tamper with evidence. None the less, in response to the concerns raised by both the noble Lord, Lord Sharpe, and the noble Baroness, Lady Lawlor, an officer will not enter a premises if a person is not present but will instead notify the person to rearrange a time to enter the premises. As the noble Lord, Lord Sharpe, mentioned, a warrant could be issued by a justice only if they are satisfied that there are reasonable grounds for entry, and judicial oversight ensures that warrants are granted only when appropriate, protecting businesses from unwarranted inspections while enabling legitimate investigations.
Clause 128 and Schedule 8 were added to the Bill to put in place appropriate safeguards relating to the execution of warrants. As I said, this approach will continue under Part 5 of the Bill, but with additional safeguards, such as needing a warrant before exercising powers to enter a dwelling. Extending this warrant requirement further to include all business premises would be a disproportionate and retrograde step in enforcement terms. It would introduce additional powers and bureaucracy, and create an unnecessary burden on the warrant system.
Amendment 271ZD is unnecessary. There are already extensive safeguards in the Bill around the use of investigatory and enforcement powers. These safeguards are designed to ensure that the use of enforcement powers is lawful and proportionate. In addition, enforcement officers are highly trained and carry out investigations under a strict code of conduct.
Clause 107 largely carries over the existing appeal grounds from the notice of underpayment regime contained in the National Minimum Wage Act 1998, which, as I said, has been functioning successfully for over 25 years. In fact, I recall debates in previous days of Committee around the effectiveness of minimum wage enforcement and the fact that not enough rogue employers have been named and shamed. The process as it stands is well known and understood by businesses and individuals. Changes risk adding confusion and uncertainty, leading to additional complexity and litigation.
Amendment 273LA would constitute a drastic downgrade in labour exploitation enforcement. The Gangmasters and Labour Abuse Authority can and must occasionally use force under PACE powers to rescue victims of modern slavery and tackle serious labour exploitation. Indeed, it is through the use of those powers that we saw two modern slavery convictions and 13 slavery and trafficking risk and prevention orders in the last reporting year of 2023-24. To reassure the noble Lord, Lord Sharpe, as is currently the case, the use of PACE powers will be strictly limited to a small number of officers, as set out in their letters of appointment, and subject to stringent IOPC oversight functions and complaints and misconduct procedures.
I am sure the whole Committee will agree that we must tackle the scourge of modern slavery. The Bill is designed to strengthen employment rights in a clear, coherent and enforceable way. Unnecessary additions or alterations, however well-meaning, could compromise that aim. On that basis, I ask the noble Lord, Lord Sharpe of Epsom, to withdraw his amendment.
Lord Carter of Haslemere (CB)
My Lords, I think the Minister explained that the reasons against requiring a warrant to be issued by a magistrate included the fact that an employer might destroy documents that were the purpose of the need to enter the premises. In those circumstances, why could the clause not say that, if the enforcement officer can show the magistrate reasonable cause to have concerns about the destruction of a document, they could apply on an ex parte basis for the search warrant? That would mean there would not be that risk of the destruction of documents in advance.
Lord Katz (Lab)
The noble Lord raises an interesting point, though I fear straying into legal territory, which I am not adequately briefed to comment on. I will write to him with further detail on the specific example he set out.
Lord Sharpe of Epsom (Con)
My Lords, I am very grateful to the noble Lord, Lord Carter of Haslemere, for his intervention, because I was about to raise a similar point. It has been a long time since, as a policeman, I applied for a warrant, but we did not routinely notify the intended recipient of our visit that we were about to do it. I do not buy the argument that that would see an awful lot of documents destroyed or anything that they might have been pre-warned being removed from the premises—they would not know. I do not see why it should be different for enforcement officers and the police, who obviously are, in some cases, investigating much more serious crimes.
On the use of force arguments that the noble Lord, Lord Katz, deployed, surely the point is that these powers are being extended and, yet again, we are relying on future guidelines, comments or statements that will be written into their terms of employment. I simply do not believe that that is enough. The public deserve the reassurance of having this in the Bill or, at the very least, clarified in a Dispatch Box Statement.
As we bring this debate to a close—my noble friend Lady Lawlor, I think, homed in on this point—the fundamental concern that underpins all these amendments is that the Government have not yet provided a clear definition of who the enforcement officers will be, what precise powers they will hold, and what training or accountability measures will govern their conduct. The absence of clarity is not a minor oversight; it is a significant gap that leaves businesses and individuals vulnerable to potential overreach and misuse of authority. Enforcement officers will be vested with extraordinary powers of entry, inspection and seizure, but we have no clear picture of the safeguards that will be put in place to prevent abuse.
These amendments are not about obstructing enforcement or denying the Government the tools that they need to tackle serious breaches of labour market law; on the contrary, we recognise the importance of robust enforcement. However, enforcement must be lawful, proportionate and accompanied by proper oversight and accountability, or it will risk losing public trust.
We have sought to introduce reasonable limits on when and how enforcement—
Baroness Lawlor (Con)
Does my noble friend agree that, in addition to the problems he has raised, there is a very great danger of vexatious claims being made without evidence, and of disproportionate actions and intrusions taking place as a result?
Lord Sharpe of Epsom (Con)
I absolutely agree with my noble friend; that is one of the reasons that we are seeking more clarity in the Bill. As I said, without transparency, accountability and a clear definition of what the powers will be—they are unarguably vague —all those concerns remain. It is disappointing that the Government have not fully recognised the risks inherent in the broad powers envisaged by the Bill. We argue that the Government should, at a very minimum, provide clear guidance on these roles and responsibilities and on the limits of enforcement officers. This subject is so important that I think we will have to return to it. For now, I beg leave to withdraw my amendment.
Lord Jackson of Peterborough (Con)
I will speak to the significant number of amendments in this group in my name. This is quite an interesting cornucopia of amendments, a number of which are, in essence, probing amendments. The very nature of the work we are undertaking is to look at the minutiae of the Bill and to see it through the prism of how it impacts on small businesses. It is very important, when we consider the fair work agency’s powers, that we look at the Bill’s real-world ramifications and consequences.
Although some of the amendments may seem somewhat obscure, I think they are nevertheless quite compelling and worthy of the Minister’s attention. In addition, the Clause 95 stand part notice is in my name; I will come to that shortly. I also have a more substantive amendment near the end of the group on a duty on the UK border agency and the new enforcement agency, the fair work agency, to collaborate or co-operate.
I begin by considering the clause stand part notice. I remind noble Lords that, ostensibly, Clause 95 circumscribes the powers available in respect of using a warrant to enter a dwelling. On the face of it, the clause looks pretty innocuous, but I do not think it should be in the Bill because its wording is quite loose and opaque. I have serious concerns about the use of permissive, wide-ranging powers, particularly in subsection (3)(b), which says
“that it is not practicable to communicate with any person entitled to grant access to the documents or equipment”.
Further, paragraph (d) says
“that the purpose of entry may be frustrated or seriously prejudiced unless an enforcement officer arriving at the dwelling can secure immediate entry to it”.
I would like to interrogate the Minister’s perception and interpretation of these powers. For the avoidance of doubt, I think that the question of whether this clause should stand part of the Bill is worthy of our consideration. Although, of course, it was not considered by the statutory instruments committee—the name of which escapes me—to be a particularly egregious example of permissive or Henry VIII powers, I nevertheless think that it could be misconstrued.
I will now consider the other amendments in my name. Amendment 273A would require the Secretary of State to have “an evidential basis” for believing that a labour market offence is being or has been committed in order to request an LME undertaking, as opposed to requiring merely that the Secretary of State “believes” this to be the case. This amendment is important because what I am attempting to define more clearly the limits of the powers being conferred—in other words, to make it explicit that there has to be a firm evidential basis for exercising those powers. We do not want a situation in which the Secretary of State may do as he wishes as long as he pleads that he believed an offence was being committed.
I am not a lawyer, but I make reference to powers being conferred on a Minister based on subjective jurisdictional criteria. Let us look at—I am sure that the Minister will be advised of this—Customs and Excise Commissioners v Cure & Deeley Ltd 1962, in which it was found that Parliament would never presume on courts adopting a particular approach to statutory construction, especially when it comes to the subtleties of administrative law. I think that this reasonable and rational amendment would tighten up the wording.
Moving on, Amendment 273B would mean that the Secretary of State could impose a prohibition, restriction or requirement as an LME undertaking only where they considered it “proportionate” as well as “just and reasonable”. The test of proportionality is, of course, at the heart of adjudication and the justice system; it is the bread and butter of administrative decision-making, especially in respect of our human rights regime. It is good practice to have statute clear in order to direct Ministers to undertake the kind of judgments which the legal framework will impose on them anyway, and which otherwise will have to be communicated by the production of additional guidance material. That is the basis for that amendment.
Amendment 273C would reduce the maximum period for which an LME measure can have effect from two years to one year. This is a practical amendment, because there is no obvious reason why any necessary measures cannot be imposed and changes expedited within 12 months. It is better, for one thing, that a business falling foul of standards should be made to get its house in order quickly and to be compliant with any LME measure within a reasonable space of time. We are talking not about a month but about 12 months; I think that is a reasonable reduction from two years. It is also better for the economy, public expenditure and Civil Service efficiency to have a shorter timescale.
Amendment 273 would require the Secretary of State to bring the end of the LME measures to the attention of “all” other persons likely to be interested in the matter, rather than “any” such persons, and the subject of the measures. This is clearly straightforward. If you are in a business, you will have multiple partners, directors or people with a significant interest in the business. Therefore, to avoid bureaucratic mistakes and errors, I think it is fair to involve as many people as practicable.
The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch)
My Lords, I am sorry to interrupt. I am trying to follow the noble Lord’s arguments, but I think Amendment 273 is in a different group.
Lord Jackson of Peterborough (Con)
I am grateful to the Minister for giving me the opportunity to clarify where I am: it is Amendment 273D. My apologies if I have not been clear enough.
This amendment would make a small clarifying adjustment: where the text currently says that the Secretary of State must take whatever steps she or he considers appropriate to bring the end of LME measures to the attention of
“any other persons likely to be interested in the matter”—
that is, other than the subject of the measures—it would use the words “all other persons”. It is important for business certainty, good faith and, indeed, fairness that all those who are affected or likely to be affected by a quite significant measure are kept properly informed about it. Otherwise, we may see messy episodes unfold where there is a misunderstanding or extra, hidden penalties imposed on businesses in the form of the costs of informing the other people affected by the LME measure that it has, for instance, come to an end.
Amendment 273E to Clause 119 would require notice of LMEs against a partnership to be given to “all partners”, rather than just “any partner”. This does not reflect what running a business with multiple partners is like, perhaps in multiple locations or running multiple business units as partners, whether it is an accountancy firm, solicitors or others—I know that there is a different regime for solicitors. It is not sensible to advise only one partner of a significant infraction or issue arising from an LME. If you want businesses to co-operate in ameliorating the issues identified in the LME, you would really need—I admit, at some modest cost—to advise all the partners. You need also to cultivate good faith in order to make the changes necessary arising from the LME.
Furthermore, it is possible that the courts will decide that notice has been given as a matter of law in circumstances where the one partner who was theoretically served it had not actually seen it and was not subjectively aware of it. Better, then, to require that all partners be given notice to ensure that businesses are genuinely aware of the ramifications and the LME decisions.
I am mindful of the time, so I will move with greater alacrity. Amendment 273F would increase the proposed burden of proof for court orders of LME measures from balance of probabilities to beyond reasonable doubt. There is reason to fear that a future Government will use the provision of Clause 117(3), which empowers the Secretary of State to create new kinds of LME measures by regulation, to create measures which go beyond regulation and become punitive, in which case the criminal proof standard will be appropriate. More generally, good faith between businesses and government, which aids compliance, will be better cultivated if they are required to comply with LME measures only in cases where there has been a clear violation.
Baroness Coffey (Con)
My Lords, I support several of the amendments tabled by my noble friend. The stand part notice in my name on Clause 134 is also in this group. We are getting into an interesting bit, in a legal sense, about what information is being gathered and how it can be used. I was somewhat struck by this. I found Clause 130 interesting in that, quite surprisingly, no evidence that has been provided relating to the information can be used in a criminal prosecution, apart from that which is directly related to perjury. That made me wonder how this works.
I want to probe why HMRC is—apart from the intelligence services, which I completely understand—singled out in Clause 134 as a body for which extra permission has to be given before its information can be disclosed to all these other different parties. That does not apply for information about the national minimum wage. I remind the Committee that HMRC is a non-ministerial department, so no Minister can be involved in directing HMRC in any way whatever. That is why it surprises me that it is felt that extra permission is needed. I would love to hear further from the Minister on that.
To turn to other amendments in this group, Amendment 273PB is an important one. I appreciate that there are further amendments later about the wider aspects of immigration, but in recognising that this new body will take over from the gangmaster authority on the extension of the Modern Slavery Act, it makes perfect sense that it should be proactively working—not just on cases that “may” be disclosed—with the Government’s agency that is responsible for tackling illegal immigration and all the impacts that come as a consequence of it. I support my noble friend Lord Jackson of Peterborough in that regard.
I have a cheeky point to make about Amendment 273N. For reasons of procedural purposes, my noble friend does not believe that Schedule 9 should be allowed because it contains Henry VIII powers. However, the Minister has already amended, or at least debated, Schedule 9 during the passage of the Bill. I am quite struck that the Low Pay Commission is one of the bodies to which information may be disclosed in relation to Clauses 113 and 114. I am not aware that it is an enforcement body; I thought that it was, in effect, a research body that comes up with recommendations about the minimum wage and so on.
I also noticed that under “Other persons”, Scottish Ministers have for some reason been left out of the equation and may need to be added. Recognising that Part 5 applies to Scotland as well and that Welsh Ministers will receive information, I am surprised that Scottish Ministers are not there.
To make a broader point, we will of course start to see a lot more co-ordination, even with local government. It might be something for Ministers to share with their colleagues. We need to start thinking about combined authorities and also mayoralties—the Greater London Authority is accounted for, but others are not. The intention of this is, I think, to allow more co-ordinated efforts to try to stop abuse of employment law, including issues relating to modern slavery. I am afraid that, for once, I disagree with my noble friend on this occasion. The Government desperately need to be able to amend the bodies under Schedule 9. My main point was probing, particularly on HMRC.
Lord Hunt of Wirral (Con)
My Lords, I will speak to Amendments 271ZC and 273BA but I first thank my noble friends Lord Jackson of Peterborough and Lady Coffey for their amendments. My noble friend Lord Jackson began by describing his amendments as a “cornucopia”. I was always told that a cornucopia was a goat’s horn overflowing with flowers, fruit and corn. A better definition than the one he used would be “an abundant supply of good things”, which opened the opportunity for the Minister to justify the unjustifiable. We all look forward to hearing from her.
Amendment 271ZC seeks to avoid governmental overreach by excluding holiday pay from notices of underpayment, given that the existing legal framework provides adequate remedy for individuals seeking to enforce their rights in this matter.
Amendment 273BA seeks to ensure that labour market enforcement undertakings are requested only when there is a public interest in doing so. This amendment provides an essential layer of protection against the risk of regulatory overreach and against the misuse of powers that could otherwise affect individuals and businesses unfairly. Clause 117 gives the Secretary of State considerable discretion to impose conditions on people or businesses suspected of labour market offences. That discretion already includes subjective tests of what is just and what is reasonable. Who defines what is reasonable? Who ensures that decisions are being made not just fairly but in service of the broader public good? By requiring measures to be in the public interest, as this amendment does, we would root enforcement action in its proper purpose: protecting workers, upholding lawful employment practices and maintaining public confidence in our regulatory system.
This amendment would strengthen the legitimacy of LME undertakings. It would ensure that measures are not only lawful and proportionate but meaningful, and that they serve society as a whole, whether it is tackling exploitation, improving transparency or deterring repeat offences. I believe the public interest must be front and centre. Without this safeguard, we risk opening the door to punitive, reputational or performative measures that may be justified in form but not in principle. This amendment would give Parliament, and more importantly the people affected, the confidence that LME undertakings will be guided by public value, not political expediency or administrative convenience. I urge the Government to support this amendment.
As I mentioned, I also support the amendments tabled by my noble friend Lord Jackson of Peterborough. His proposed changes to the wording of the legislation, particularly in relation to enforcement powers, are both thoughtful and necessary. By raising the evidential threshold from a simple belief to one requiring an evidential basis, and by increasing the standard of proof for courts from “the balance of probabilities” to “beyond reasonable doubt”, these amendments would introduce essential safeguards. They do not undermine the policy intention of the Bill to tackle labour market offences effectively. Rather, they ensure that enforcement actions are firmly grounded in evidence, and that the rights of employers and individuals are protected from potential overreach or misuse of power. In short, my noble friend’s amendments help strike the critical balance between robust enforcement and fairness, which I believe is vital for maintaining public confidence in the system.
Amendment 273PB, tabled by my noble friend Lord Jackson of Peterborough, is an incredibly important amendment. We live in a world where migration patterns are increasingly complex and the risks associated with illegal immigration, visa overstays and exploitation in our labour market are growing. At the same time, threats to our national security have become more sophisticated, requiring a co-ordinated and agile response across multiple agencies.
Baroness Jones of Whitchurch (Lab)
My Lords I thank noble Lords who have spoken. I am responding to the noble Lords, Lord Sharpe, Lord Hunt and Lord Jackson, and the noble Baroness, Lady Coffey, who have tabled amendments on the powers of the fair work agency and oppose Clauses 95 and 134.
I accept the point made by the noble Lord, Lord Jackson, that some of his amendments are probing amendments. I will attempt to respond to each in turn. Forgive me if I repeat some points that my noble friend Lord Katz made in the previous debate, which covered similar ground. I think we covered some of this ground in debates on a previous day. I can assure the noble Lord, Lord Hunt, that I have no need to justify the unjustifiable in my response.
I will speak first to the fair work agency’s investigatory powers and address the opposition of the noble Lord, Lord Jackson, to Clause 95. I listened to the noble Lord, but investigatory powers are common to all regulators. The fair work agency’s powers are based on those set out for existing enforcement bodies in the Employment Agencies Act 1973, the National Minimum Wage Act 1998 and the Gangmasters (Licensing) Act 2004. Employment rights enforcement agencies have had power to enter premises used as dwellings since their inception. For example, HMRC’s minimum wage inspectors can and do regularly visit business premises used as dwellings to gather evidence. It is right that officers should be able to gather evidence from such premises. Businesses operating from premises used as dwellings is nothing new. Pubs, for example, often have flats above the public area where the business’s documentation is kept.
Today, more and more businesses operate from home. Current law makes no distinction for dwellings. This Government believe in stronger safeguards for such powers. That is why Clause 95 introduces a new requirement for a warrant to enter dwellings. Together with the additional safeguards in Clause 128 and Schedule 8, this clause strikes the right balance between protecting the privacy and rights of individuals and allowing the fair work agency to go about its job of enforcing labour market legislation. I hope that I have reassured noble Lords on this point, and that noble Lords can agree that Clause 95 should stand part of the Bill.
The noble Lord, Lord Jackson, also addressed his amendments to Clause 128. I recognise the intent behind these amendments, but there are already extensive safeguards around the use of investigatory powers in Part 5, including the new requirement for a warrant when entering a dwelling. Clause 128 is a sensible provision that sets out that any enforcement officer has the right to execute a warrant and, as long as the enforcement officer is present, they can be accompanied by an authorised person or persons if they deem it relevant to the investigation—for example, an IT specialist.
Turning to Amendment 271ZC from the noble Lord, Lord Sharpe, enforcement of holiday pay is a key part of the fair work agency’s remit. Large numbers of workers are missing out on their statutory right to paid annual leave. The Trade Union Congress estimates that 2 million people lose around £3 billion per year by not receiving holiday pay to which they are entitled. We recognise that this disproportionately affects the lowest-paid workers. The fair work agency will not be able to meaningfully support workers to recover the holiday pay they are owed if it cannot issue notices of underpayment. This is a power that is already available in the national minimum wage enforcement regime, which has been successful in ensuring that workers receive the arrears that they are owed. Therefore, I must respectfully resist this amendment.
I turn now to the amendments to Clauses 116 to 121 inclusive, in the names of the noble Lords, Lord Jackson, Lord Sharpe and Lord Hunt, together with the amendments to Clauses 126 and 136. These pertain to the labour market enforcement undertakings and orders regime. Although these amendments touch on important aspects of the Bill, they either duplicate existing provisions and introduce unnecessary complexity, or risk undermining the careful balance that has already been struck in the drafting. The labour market enforcement regime was introduced by the 2015 to 2017 Conservative Government. Indeed, the noble Lord, Lord Jackson, at that time in the other place, voted in favour of this regime consistently during the passage of the Immigration Act 2016.
It is a regime that works and works well. It promotes a compliance-first approach, as employers are first encouraged to enter into voluntary undertakings to correct their behaviour. Only persistent or egregious offenders are issued with a compulsory order to stop. As of March 2024, there have been 140 labour market enforcement undertakings and just 14 labour market enforcement orders. These amendments seek to water down the regime and increase legal tests and administrative burdens for its use. By making the labour market enforcement regime more cumbersome and less effective, the fair work agency would have to resort more often to prosecution, which could be disproportionate and time-consuming for all concerned. The effects of these amendments would be to make enforcement more heavy-handed, less efficient and less focused on helping businesses to comply. This is not what businesses or workers want or need, and it is not what the fair work agency is about.
Lord Jackson of Peterborough (Con)
I hear what the Minister says, but surely she would agree that, if one looks at Amendment 273F, which moves from having “a balance of probabilities” to “beyond reasonable doubt”, if you are taking forward an LME infraction case beyond reasonable doubt, you are more likely to succeed, and the corollary of that is that you are not taking forward cases on which you have a paucity of evidence. So, with all due respect to the noble Baroness, I disagree. If you are bringing in proportionality and “beyond reasonable doubt”, you are going to have sharper cases that tackle the most egregious examples of infractions of the legislation and do not waste a lot of time—and consequently save the taxpayer money.
Baroness Jones of Whitchurch (Lab)
The evidence shows that the current wording is proportionate. There has not been a huge number of cases. Maybe we could argue about whether there should be more cases, but the fact that there has not been a huge number of cases is a reflection of that. What we do not want to do is set the barrier so high that we cannot take the cases that are necessary to deliver the changes and the better worker protection that we seek to achieve.
I turn to the noble Lord’s Amendment 273N. I agree that effective sharing of information and pooling of knowledge will be crucial to the success of the fair work agency. The list of bodies that the agency will be able to share information with is limited to those with a need for access, and safeguards are provided for. However, the power to update the list is necessary to ensure that the fair work agency can respond to future changes in the wider labour market and the regulatory landscape. It means that we can keep the list of bodies under review and remove bodies where the need to share information no longer applies. This is good data information governance.
The noble Baroness, Lady Coffey, asked about the Low Pay Commission being listed. The fair work agency will be able to share information with the bodies in Schedule 9 if it is for the purposes of a function of the body. This does not need to be about the enforcement functions. I also say to the noble Lord, Lord Jackson, that the Delegated Powers and Regulatory Reform Committee expressed no concern with this power in its report on the Bill.
On the opposition of the noble Baroness, Lady Coffey, to Clause 134, HMRC data is critical for investigating and enforcing various employment rights, not just the national minimum wage. However, I say to the noble Baroness that much of HMRC’s data is confidential, and it is therefore prudent to require an extra level of approval before this information is shared further.
Clause 134 restricts the sharing of confidential HMRC data without authorisation from HMRC commissioners. This will ensure that the fair work agency operates in line with the Commissioners for Revenue and Customs Act. This is a standard safeguard which is necessary to ensure responsible data sharing between HMRC and the fair work agency.
In relation to Amendment 273PB from the noble Lord, Lord Jackson, I reassure him that the Bill already gives the Secretary of State the power to share information with border authorities, such as the National Crime Agency and immigration officers. Rather than enhancing enforcement, the amendment risks introducing unnecessary complexity and diverting attention away from the fair work agency’s core task. The amendment’s intended effect can be achieved through the existing Bill drafting.
I turn to the noble Lord’s Amendment 273R to Clause 140. The ability to recover enforcement costs in relation to the time spent is a matter of fairness. Restricting the use of hourly rates would in practice force the fair work agency to adopt fixed fees. A fixed approach to cost recovery could mean that a small business ended up paying the same as a much larger organisation, regardless of the scale or complexity of the case, and that is not fair. This clause is an enabling power. Regulations made under it will be subject to the affirmative procedure. Parliament will be able to scrutinise and debate whether to adopt a fixed-fee or variable-fee regime at the point where the regime is proposed, and it is right that we afford that flexibility in design at this stage.
In conclusion, while I appreciate the intention behind the amendments, they either replicate what is already achieved by the Bill’s existing provisions or risk unsettling a framework that has already been carefully constructed. I therefore ask the noble Lord, Lord Sharpe, not to press Amendment 271ZC.
Lord Jackson of Peterborough (Con)
I thank the Minister for that comprehensive canter through my amendments. I defer to the poetic licence of my noble friend Lord Hunt of Wirral and accept that it is not a cornucopia, but my cup overfloweth nevertheless.
I appreciate the spirit in which the amendments were received. I was attempting to improve the Bill. Not for the first time, my noble friend Lord Hunt put it much more succinctly than I did in that, certainly with regard to proportionality and “beyond reasonable doubt”, notwithstanding the excellent drafting by officials, the amendments would have improved the Bill.
Member's explanatory statement
This amendment would enable an application for an order enforcing a requirement in a notice of underpayment to pay a sum to an individual to be made in Scotland to a summary sheriff (as well as to a sheriff).
Lord Sharpe of Epsom
Member's explanatory statement
This amendment requires the worker’s informed consent before the Secretary of State can initiate legal action, preserving individual autonomy and control over personal legal matters.
Lord Sharpe of Epsom (Con)
My Lords, in moving Amendment 271D, I shall speak also to Amendments 272ZZA, 272ZZB, 272ZZC, 272ZZD, 272ZZE, 272ZB, 272ZC, 272AA, 272AB and 272AC.
There is a troubling message throughout this legislation of the fundamental belief that third parties, whether they be unions or the state in Part 5, will make decisions on behalf of individuals rather than individuals being able to make decisions for themselves. The challenge with third parties making decisions is that they pay no price when they are wrong, and that is evidenced in this clause. Clause 113(6) states:
“The Secretary of State is not liable to any worker for anything done (or omitted to be done) in, or in connection with, the discharge or purported discharge of the Secretary of State’s functions by virtue of this section”.
That is an unacceptable subsection in this clause, hence my Amendment 272ZZE.
The reality is that workers whose claims are taken up or not taken up by the Secretary of State risk having their rights mishandled or ignored, yet, under the clause as drafted, they would have no recourse, remedy or ability to challenge that failure. We think that that sets a dangerous precedent, because we are granting power without responsibility. We would be creating a regime in which decisions that affect individuals’ livelihoods and legal rights can be made from behind a veil of immunity. That is neither just nor consistent with the principles of good governance. We need to be clear that, if a private employer or a trade union behaved with this level of impunity, we would not accept it, so why are we accepting it from the state?
The fundamental principle underlying Amendments 271D, 272ZZA, 272ZZB, 272ZZD and 272ZC is consent. Clause 113 currently allows the Secretary of State to initiate legal action in a worker’s name without requiring that worker’s consent. That is deeply problematic. Legal proceedings, particularly employment proceedings, can be deeply personal, reputationally sensitive and complicated. To bring such proceedings without the individual’s explicit and informed consent is a serious encroachment on personal autonomy. My Amendment 271D would insert a requirement that the worker must provide written consent before the Secretary of State may act on their behalf. That is not a mere administrative formality; it is the cornerstone of the individual’s control over their own legal affairs.
What if consent was not initially required or given but circumstances change? That is addressed in my Amendment 272ZZA, which would establish a clear opt-out mechanism. It would ensure that the worker is given notice before proceedings begin and is afforded 28 days to object. If they do, the case does not proceed. Surely this strikes a balance between the state’s interest in pursuing enforcement and the worker’s right to decide how their own case is handled. Legal action is not always welcome, even when it is justified. The consequences of litigation, especially in employment, can be damaging professionally and personally. Workers may prefer alternative dispute resolution.
However, consent and opt-out are not enough on their own. Even with consent, the state must be bound by a duty to act in the worker’s best interests. That is why I have proposed an amendment requiring that the Secretary of State should have regard to the worker’s stated objectives, the potential impact on their current and future employment, and the proportionality of taking legal action in the specific context. That is a safeguard to prevent well-meaning intervention becoming harmful or heavy-handed.
Then there is the matter of control. A worker may initially consent to the Secretary of State taking the lead but later wish to take back control of the proceedings, perhaps because they have secured private representation or circumstances have changed. My Amendment 272ZZD addresses this. It would ensure that the worker retains the right to reclaim their case and that the Secretary of State must accommodate that request. It affirms that ultimate control remains with the individual and not with the state.
Finally, my Amendment 272ZC would introduce a fundamental principle, that of subsidiarity. The state should not intervene unless there is absolutely no other viable route to justice. If the worker has representation or access to advice or union support, that route should be exhausted first. Legal action by the Secretary of State should be a last resort, not a first impulse.
These amendments are not intended to frustrate enforcement—far from it. They are designed to ensure that enforcement is fair, consensual and genuinely in the interest of the person whose rights are at stake. Workers are not passive subjects of policy; they are individuals with agency, judgment and a right to decide how they wish to pursue justice. We must ensure that the Bill does not cross the line from protection into paternalism.
I turn to Amendments 272AA and 272AC. Amendment 272AA simply calls for an annual report—nothing excessive, just a basic record of how often these powers have been used, what types of claims have been pursued, the outcomes and any costs or awards recovered. This is a common-sense transparency measure. If the state is litigating on behalf of private individuals, we should, at the very least, be keeping track of how that power is being exercised and with what effect.
Amendment 272AB, however, is the more pressing amendment because it would place a sunset clause on the power, causing it to expire at the end of the next Parliament unless it is actively renewed. It would also require an independent review to assess whether this power has delivered real value for workers, for justice and for public money, because the truth is we simply do not know if this clause is necessary. We do not know if workers even want the state litigating on their behalf; we do not know if the outcomes justify the costs; and we certainly do not know if this is the most effective way to improve enforcement. If this power is to remain, Parliament should be given clear evidence that it works and works better than the alternatives.
Finally, Amendment 272ZB would introduce a simple but important safeguard: a public interest test before the Secretary of State can bring proceedings on a worker’s behalf. Without this, we risk allowing the state to pursue claims that may be frivolous, politically motivated or unnecessary, potentially at public expense and also to the detriment of both workers and employers. Litigation should not be used to make a point; it should be used to deliver justice where it truly matters. This amendment would ensure that such powers are exercised responsibly and proportionately, and only where there is a clear public benefit. I beg to move.
Baroness Coffey (Con)
My Lords, I oppose the Question that Clause 113 stand part of the Bill. I raised this in Second Reading, and I appreciate the discussions that have taken place with officials and the Minister since, but I genuinely believe these are novel powers.
I appreciate that we are perhaps just not going to agree today on how far the Equality Act 2006 goes, but when I tabled Questions to the Minister, they were passed to the EHRC. The commission said that, since it had received those powers—I think it was commenced in 2007—no powers had been used to initiate legal proceedings that were not judicial review or as an intervener. It gave me the distinct impression that it did not necessarily believe that it should be initiating legal proceedings in this regard. It has its own policy and that is under consultation. However, it does beg the question, given some of the other consultations that the Government have initiated, whether they will in future seek to take over any such duties or powers that the EHRC has in a variety of legal proceedings, because the EHRC is not using powers that the Government think it has. However, I think that is still really a matter of debate.
Building on the amendments that have been tabled by my noble friends on the Front Bench, I think this is an odd situation. I appreciate we have discussed elements of Clause 113 before; indeed, the other day we debated my noble friend Lady Noakes’s sensible amendment that this should be in the public interest. It would be helpful to understand from Ministers what they see will happen as a consequence of this. Where are we getting to? What is going on?
I have deliberately degrouped some parts of this discussion on Clause 114—about the money side—but it is useful to understand that, for the purposes of this clause, this is not just about people who are working; it is about people who do not have a job with the person they are seeking to take to court. We had a debate some time ago about why that could be, and we got into a debate about what sort of special privileges there might be. Nevertheless, this seems quite an extraordinary shift in the capability of the Government, first, to initiate these proceedings anyway and, secondly, to do so when the worker involved does not intend to do so. That is why, I appreciate, the legal wording really restricts any inclusion of the worker at a future date, which specifically seems to be ruled out in various provisions in the clause, except in Clause 113(5), which allows the worker to be brought in at an appeal stage. However, I am concerned more generally about this approach of a new agency.
Another element that really concerns me is subsection (6), which in essence provides:
“The Secretary of State is not liable to any worker for anything done (or omitted to be done)”.
I expect that is there to cover circumstances—we may have had a brief exchange on this already—in which the worker says, “You didn’t go after this bit or that bit”; it is kind of “Tough luck”. As it stands, it is not clear to me whether, if the worker is unhappy with the action taken, double jeopardy is allowed: will the worker be allowed to initiate separate claims against the employer, if they feel that the Secretary of State and the enforcement officers have admitted different things?
Overall, this clause is an unnecessary innovation. I am concerned about it, and I would be grateful for some broad examples of how it could be used in the future.
Lord Murray of Blidworth (Con)
My Lords, I support the amendments in this group in the name of my noble friend Lord Sharpe of Epsom. Looking at Clause 113, I am put in mind of the pre-exploration exhortation of Colonel Kurtz: “The horror! The horror!”. As an employment lawyer looking at this clause, I can say that it is a complete Horlicks. It is truly bizarre. Can the Minister say why this power is required? Who should decide whether the Secretary of State should intervene in a person’s right to bring proceedings? Why should that choice be taken away from them? If the Secretary of State decides to bring proceedings, how would the Secretary of State compel the person who did not want to bring proceedings to give evidence in their own claim that they are not bringing? Why would the judge decide that the claim should be allowed to succeed, in the absence of evidence from the person whose claim it is?
Then there is the question as to why the taxpayers of this country should bring proceedings in the name of somebody who does not want to bring them, possibly against a public sector employer who then has to pay to defend those proceedings to make an award of damages to a person who does not want to claim damages. All this is absolutely beyond belief.
Furthermore, I noticed that it is a discretion:
“the Secretary of State may, in place of the worker, bring proceedings about the matter in an employment tribunal under the enactment”,
which appears to relate to any enactment in the entire employment canon. There is no explanation as to the test the Secretary of State is going to apply in making that discretion. That exercise of discretion will plainly be subject to judicial review. If the Secretary of State chooses not to exercise their power, no doubt there will be satellite litigation in the High Court—brought by the unions, I suspect—as to why the Secretary of State has not chosen to bring a claim on behalf of somebody who they think should have had their claim brought by the Secretary of State. Applying the usual tests, I suppose it will be said that it was irrational not to bring the claim or it was in breach of some legitimate expectation that their claim would be brought. It seems to me that that whole delight now lies before the Committee as to whether there should be litigation on behalf of somebody who does not want to litigate.
This is simply an absurd and inverse world of mirrors that, frankly, Lewis Carroll in Through the Looking-Glass would not have believed was possible. The lunacy of it is notable in Clause 113(5), whereby a worker can appeal against the outcome in a claim when he did not even want to bring a claim. This is so badly thought out that it should clearly be withdrawn.
Baroness Lawlor (Con)
My Lords, I follow my noble friends by supporting the amendments tabled by my noble friend Lord Sharpe and voicing very strong opposition to Clause 113. I could not believe it when I read this clause. I could not believe that a third party—the Secretary of State—could bring proceedings on my behalf to a tribunal if I did not want proceedings brought. Nor did I think that subsection (6) was worthy of any government Bill. One could go through the whole of this clause and find something very wrong with it on many grounds.
There are many reasons why a worker may not want to proceed with a claim. He or she may not wish to bring proceedings because of the hassle involved, the delay, the stress to themselves and their family in waiting for the tribunal—which can never hear a claim quickly—the potential impact on his or her reputation, or a perfectly natural desire by an employee to settle things amicably with their employer. There are many individual reasons: family reasons, personal reasons and professional reasons. What right have we to give the Secretary of State powers to override that basic individual liberty in order to bring a case which someone may not want to be brought?
One can only wonder why such a clause is there—that the Secretary of State can bring proceedings, presumably, against a worker’s will or inclination. We can only assume that this may be due to workplace political pressures exercised by others in the workplace, perhaps by union members who want these cases brought as test cases and for the taxpayers to pay, or by others who have the ear of government.
This is a very sectional Bill in the interest of one vested interest group. I have said it before during proceedings, but it is not for the Government of this country in a parliamentary democracy to sectionalise the law in favour of one interest group or another. Clause 113 is particularly dangerous, and I support my noble friends’ amendments to it. I hope the Government will not proceed with it.
Lord Carter of Haslemere (CB)
My Lords, I support the comments made, particularly those of the noble Lord, Lord Murray. This is an extraordinary clause; I am not aware of anything else on the statute book like it.
My practical question to the Minister is: if the Secretary of State takes it upon himself or herself to go to court on a worker’s behalf, and the worker is strongly against that, what will that do to the relationship between the worker and the employer? It could absolutely devastate that relationship, because the employer will greatly resent the fact that the Secretary of State is taking proceedings on behalf of the worker, even if the worker has said that they do not want those proceedings brought. This is not good for industrial relations at all.
I really urge the Government to rethink this. What are its practical implications? How will it work in practice if the worker is against it? Will they be called as a witness by the Secretary of State, if necessary? Will they then be a hostile witness? It is all a complete and utter mess, I am afraid. I was not planning to speak on this, but this is an extraordinary clause and I urge Ministers to drop it completely.
Lord Jackson of Peterborough (Con)
My Lords, I was happy to sign the clause stand part notice with my noble friend Lady Coffey. I am thinking of the words of Zhou Enlai, I think, who, considering the French Revolution, said, “What did they mean by that?” I look at this clause and think, “What do they mean by this?” Maybe the Minister will open the trinket box at the end of this process and let us into the secret of this bizarre, perverse clause, but I really cannot see the point of it.
I am mindful of the fact that we are surrounded by very accomplished lawyers, so I will not get too much into law, but lawyers and others will be aware that Magna Carta—1215; I know the noble Lord, Lord Katz, likes a history lesson occasionally in Committee—resiled from the arbitrary power of the state. It is an arbitrary power of the state for it to insert itself into civil litigation without any real methodological basis, any timeline or, as my noble friend Lord Murray of Blidworth so rightly said, any tests being met. That is very odd.
Perhaps the Minister will enlighten us as to the rationale. The clause is novel. It is completely perverse and unheard of, to be quite honest, because it will engender a disputatious regime, more litigation and more disputes in the workplace. It will have a deleterious effect on business, commerce and profitability, and on how businesses are run. What tests will the Minister use? How likely is it that these powers will be used and at what likely cost? Is there any impact assessment or opportunity cost as to the use of these powers?
Why does subsection (2) leave agricultural workers out of the process? There may be a specific sectoral reason for that, but that is a reasonable question to ask. Why are they not swept up in these powers? Why are their rights not circumscribed to not get involved in civil litigation in respect of employment?
Finally, the most bonkers part of a truly epically bonkers clause is subsection (7). It is so crazy that it could have been written by the Liberal Democrats, but it would be unkind to make such an observation. My noble friend Lady Coffey has already made the point that you do not even have to be a worker to have the Secretary of State impose themselves into your potential litigation on a matter; you can be someone seeking employment as a worker. Presumably, anyone who is of working age can be affected by this clause. Subsection (7) also states that a worker is defined more widely as an individual who is a worker for the purposes of Part 4A of the Employment Rights Act 1996.
I really do not understand the rationale for or the logic behind this clause. The Minister is clearly aware of the great disquiet that it gives rise to, and I hope she answers the specific points made, not least by the noble Lord, Lord Carter of Haslemere. It takes something for a noble Lord of his experience in the law to say that this is the most perverse and strangest clause he has seen in a piece of primary legislation. On that basis, I hope the Minister will respond to that and answer those specific points that noble Lords, in particular the noble Lord, Lord Carter of Haslemere, have raised.
Lord Ashcombe (Con)
My Lords, I support my noble friends Lord Sharpe of Epsom and Lord Hunt of Wirral in some of the amendments in this group, and my noble friends Lady Coffey and Lord Jackson of Peterborough in their opposition to Clause 113, which I must describe—much as the noble Lord, Lord Carter of Haslemere, did—as quite extraordinary. It is extraordinary because it grants the Secretary of State exceptional powers—namely, the ability to initiate proceedings before an employment tribunal on behalf of a worker without that worker’s consent or even their knowledge. How can this be right? If a worker has chosen not to pursue a claim, whatever their reasons, how can the state reasonably step in and proceed in their name? Unlike my noble friend Lord Murray of Blidworth, I am no lawyer, but I think this demonstrates the need for Amendment 271D.
Consent is a fundamental principle in so many aspects of law and life, yet here it appears to be disregarded. Amendment 272ZZA at the very least seeks to restore some balance by ensuring that the worker in question is given the opportunity to consent or decline. If consent is not given, the matter should go no further: all bets should be off. I find it puzzling that those on the Benches opposite consider it appropriate to have the ability to disclose personal data, whether legally privileged or not, without the written consent of the individual concerned. It is not typically something permitted in other circumstances. It is not fair, and we are about fairness in this House.
Baroness Jones of Whitchurch (Lab)
My Lords, I begin by saying what a pleasure it was to be chaired by the noble Baroness, Lady Fookes, who is celebrating 55 years of public service today. I congratulate her.
Back to the not-so-inspiring business: I am responding to the noble Lord, Lord Sharpe of Epsom, on his amendments relating to civil proceedings and the noble Lord, Lord Jackson of Peterborough, and the noble Baroness, Lady Coffey, for giving notice of their opposition to Clause 113. The Government are committed to ensuring a fair playing field for all employees and businesses. This includes enabling the fair work agency to challenge breaches of employment rights and labour abuse where individuals may not be able to pursue this for themselves or where these cases are not suitable for other enforcement routes.
I am sorry to hear that some noble Lords cannot envisage the circumstance in which these powers might be necessary but, as we rehearsed on a previous group of amendments, many vulnerable workers, especially migrant workers, are reluctant or unable to bring their case to the tribunal to enforce their employment rights. Rogue employers exploit this, break employment law and get away with it. That is unfair for the majority of businesses that do right by their staff. It is unfair for the vulnerable workers involved in being denied their rights. It is unfair for British workers who are denied work opportunities due to illegal practices undercutting them. That is why, in the plan to make work pay, which was a manifesto commitment, we set out that the fair work agency will have the power to bring civil proceedings to uphold employment rights. This is why the Secretary of State will have the power to bring proceedings in place of a worker. It will mean that all employers are held to the same standards.
I say to the noble Baroness, Lady Coffey, and the noble Lord, Lord Carter, that these provisions on civil proceedings are modelled on the Equality Act 2006, which allows the Equality and Human Rights Commission to institute legal proceedings that are connected to the commission’s functions. This includes bringing proceedings for breaches of the European Convention on Human Rights and assisting individuals who are party to proceedings related to the Equality Act 2010.
Baroness Jones of Whitchurch (Lab)
If the noble Lord lets me finish this point, I may answer his question.
The Employment and Human Rights Commission does not need consent for this and has issued proceedings in its own name before. When acting as an intervenor, the EHRC has also previously received court approval to take over conduct of an appeal on behalf of an appellant when the appellant decided to withdraw from the legal proceedings. This was done with the consent of the Supreme Court in the case of MS (Pakistan) v Secretary of State for the Home Department. I give way.
Lord Murray of Blidworth (Con)
I am grateful to the Minister for reaching the end of that paragraph. She agrees that the power for the EHRC to intervene in proceedings is not a power to take over and institute proceedings if people do not want to. Instead, it is a power to intervene and carry on proceedings in the event that somebody wants to withdraw. That is not based on any statutory provision; this is still extremely novel. I am sure that the Minister will agree that there is no statutory precedent for the kind of power that the Government want to take in Clause 113.
Baroness Jones of Whitchurch (Lab)
As the noble Lord has more legal expertise than me, I am happy to write to him on that point because it is an important point that we need to clarify. Of course, these are relatively new powers that we are taking on board, and we are taking them for very good reasons. I am sorry that noble Lords opposite do not see the case for this, because, certainly, an awful lot of workers are being exploited out there. At the moment, they do not have the power to speak for themselves in the way that many others who are better informed can do.
While I respect the intention of the noble Lord, Lord Sharpe, behind some of his amendments, I must state they are unnecessary. Some of the provisions of the amendments are already provided for, either within the existing drafting of the specific clauses or in other clauses of the Bill. Regarding Amendments 271D, 272ZZA and 272ZZD, as I mentioned on Monday, normal practice would be for the Secretary of State to bring proceedings with a worker’s consent and involvement. However, in the worst cases of serious exploitation and intimidation, workers may fear the repercussions that they may face from their employer should they be de-anonymised. By allowing the Secretary of State to take a case forward without consent, it would be harder for employers to attribute blame to individual employees. Therefore, limiting this power in the way that these amendments seek to do could prevent the Secretary of State pursuing serious breaches in some of the most egregious cases.
Amendment 272ZZB is an unnecessary amendment. Legally privileged material and confidential information is already protected under the Data Protection Act, as well as under usual legal rules and principles that apply to proceedings.
On Amendment 272ZZC, normal public law principles already take account of all considerations referenced in this amendment, including the best interests of a worker. This is therefore another unnecessary amendment.
Amendment 272ZZE is yet another unnecessary amendment. Clause 113(6) does not provide a blanket exclusion from all liability, and it is self-evident that the Secretary of State would be held accountable if they undertook actions that were unlawful. This is a basic principle of the rule of law.
On Amendment 272ZC, it is clearly in the interests of enforcement authorities and all parties that the most effective and proportionate means of enforcement is chosen. The Bill already provides that civil proceedings cannot be initiated where a notice of underpayment has been given. It would be inappropriate to impose hurdles on the fair work agency’s use of its powers; it should be able to decide how best it will use this and its other powers to enforce labour market legislation in each case.
On Amendment 272AA, Clause 92 already provides for the fair work agency to prepare and publish an annual report, which we would expect to cover all of its activities. It is simply not necessary to require individual reports on individual powers.
We strongly resist Amendment 272AB. Ultimately, the business of the next Parliament should be for that Parliament to decide and not for us to dictate now.
Briefly on Amendment 272AC, only officers with appropriate knowledge and training will carry out these powers. Clause 87(6) already clearly provides that a person can exercise the powers of an enforcement officer only to the extent specified in their appointment by the Secretary of State. This amendment would duplicate that existing provision.
To summarise, Clause 113, together with Clauses 114 and 115, delivers a manifesto commitment. It provides a new power that will enable fair work agency enforcement officers to bring proceedings to an employment tribunal in place of a worker. It is designed to address situations where a worker has a legal right to bring a claim but, for various reasons, including fear of retaliation, lack of awareness or language barriers, they are unable to do so. This clause enhances the state’s ability to support the most vulnerable workers in accessing justice and will be particularly valuable in cases involving labour exploitation or breaches of minimum employment standards.
It will bring broader benefits. The fair work agency will be able to bring multiple complaints simultaneously. This will save time and costs for workers and employers alike. It has the potential to reduce the burden on the employment tribunal system over current practices, where most claims are brought individually.
Importantly, the clause is tightly drawn. The fair work agency’s tribunal proceedings will follow the same process as if they were brought by workers. This includes a requirement for ACAS consultation. Additionally, the power cannot be used in cases where a notice of underpayment has been issued under Section 100. This ensures that there is no duplication of enforcement mechanisms. Both the Secretary of State and the worker can appeal a decision, recognising that both parties have a legitimate interest in the outcome. The clause includes safeguards to ensure that the Secretary of State cannot be held liable to the worker for how they exercise this power, reflecting the discretionary and strategic nature of enforcement.
This clause forms a crucial part of the fair work agency’s toolkit, enhances the effectiveness of labour market enforcement and delivers a manifesto commitment upon which Members in the other place were elected. It should stand part of the Bill.
Lord Jackson of Peterborough (Con)
I am listening very carefully to the Minister, and she did not address either of my specific points. Given that she is saying that this rather strange clause is to defend the interests of new migrants and black and minority-ethnic folk, many of whom work in agriculture, particularly in the east of England and other parts of the UK, why is there a carve-out for agricultural workers? The Minister did not answer my question on why that happened. Secondly, can I press her on my specific point on why de facto unemployed people fall under the purview of subsection (7) of this clause, allowing the Secretary of State to insert state apparatus into their litigation, when they are not even in gainful employment?
Baroness Jones of Whitchurch (Lab)
I thank the noble Lord. My apologies; I should have answered both of those questions. On the issue of agricultural workers, I do not know the answer, so I will write to the noble Lord. On his question about why subsection (7) covers people who are not yet employed, the clause was worded in that way to capture whistleblowers and was amended to widen it to include zero-hours contract workers. I hope that answers the noble Lord’s questions.
Baroness Verma (Con)
I am slightly confused. This seems to be quite a heavy-handed way of capturing workers who may have difficulties understanding their rights. Instead of being so heavy-handed about the whole approach and making it look like a two-tier system is being created, in which migrant workers in particular are focused on, maybe we can look at how we can inform both employers and employees about their rights, without taking such an approach. The people we are trying to protect will most definitely not be protected by this.
Baroness Jones of Whitchurch (Lab)
Although I did talk about migrant workers as an example, this is meant to capture all vulnerable workers and all workers who are exposed to unfair practices or intimidation—which happens rather more than noble Lords opposite like to acknowledge.
In conclusion, the civil proceedings powers within the Bill align with our manifesto commitment—
Baroness Coffey (Con)
The Minister explained subsection (7)(a)(i) of this clause with regards to zero-hours contracts. In subsection (7)(a)(ii), I am struggling to understand how an individual
“seeking to be employed by a person as a worker”
could be a whistleblower. I would be grateful to understand that better, but I am happy for the Minister to write.
Baroness Jones of Whitchurch (Lab)
On that point of clarification, I will write to the noble Baroness.
In conclusion, the civil proceedings powers within the Bill align with our manifesto commitment to strengthen enforcement and improve outcomes for workers through a fairer, more accessible system. We need to let the fair work agency operate with the tools it needs, guided by the statute but not constricted by inflexible restrictions or ministerial bottlenecks. I therefore ask the noble Lord, Lord Sharpe, to withdraw Amendment 271D.
Lord Sharpe of Epsom (Con)
My Lords, I thank the Minister for her reply. She will not be surprised to know that I am afraid I did not buy any of those arguments.
I am extremely grateful to my noble friends Lady Coffey, Lady Lawlor, Lord Jackson, Lord Ashcombe and Lady Verma for their interventions; they all made extremely good points. I will return to the points raised by the noble Lords, Lord Carter of Haslemere and Lord Murray of Blidworth, in a second.
We have just heard this clause described variously as “beyond belief”, “especially bonkers”, “an utter mess”, “quite extraordinary” and “perverse and unheard of”. Do you know what? It is all of those things. This has been an extraordinary debate, and so many interesting points have been made that it is hard to sum up. However, there is one point that was brought to my attention by the noble Lord, Lord Sandhurst, who was sitting next to me at the time. He pointed out that this clause might be in contravention of Article 8 of the European Convention on Human Rights: the right to respect for private and family life. This needs to be explored, and it is important for the Minister to take account of, because, under Section 19(1)(a) of the Human Rights Act 1998, she has to sign on the front of this Bill that it is compatible with the rights under that convention.
I will read the relevant article, so it is on the record:
“Everyone has the right to respect for his private and family life, his home and his correspondence … There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others”.
I do not expect the Minister to answer this now, but I would be very grateful if she could at least allude to the legal advice that she was given before she signed the Bill to confirm that it did not contravene Article 8.
I appreciate that government legal advice is rarely published, but, having had some experience of government lawyers and their risk-averse nature, I would be very surprised if they had considered this in its entirety. I would be grateful if the Minister would come back to that issue, perhaps in the letter to my noble friend Lord Murray of Blidworth. This is clearly one of the subjects to which we will have to return, because, as both the noble Lord, Lord Carter, and my noble friend Lord Murray have explained, this is extraordinary and positively Kafkaesque.
I will leave the last words to my noble friend Lord Murray of Blidworth, who pointed out that we could end up in a state where we have litigation about litigation on behalf of someone who does not want to litigate. That is frankly absurd. For now, I beg leave to withdraw my amendment.
Before I sit down, I congratulate the noble Baroness, Lady Fookes, on her 55 years of public service. I believe that she was first elected on 18 June 1970 to represent Merton and Morden—many congratulations.
The Deputy Chairman of Committees (Baroness Fookes) (Con)
That is most kind, but we must not be diverted from the business in hand. Is it your Lordships’ pleasure that this amendment be withdrawn?
Member’s explanatory statement
This amendment is consequential on the definition of “worker” being inserted into Part 5 by my amendment of clause 148 at page 147, line 9.
Baroness Coffey
“(1A) This section only applies to an individual, not a trade union or a person acting on behalf of a trading union, seeking to take action against an employer.”
Baroness Coffey (Con)
My Lords, in moving my Amendment 272BA, I will speak also to Amendments 272D to 272L and to oppose Clause 114 standing part of the Bill. With Amendments 272J to 272L, I will consider parts of Clause 115.
I have looked at the Labour Party’s manifesto plan, Make Work Pay. In a previous debate, we talked about enforcement, but no reference was made to this being done without the consent of the worker involved. The manifesto is silent on providing funds, so I thought it was worth debating why we are having this, who it will go to and what amount of money we are considering. Consequently, I have proposed a number of amendments. They were actually tabled before we had the debate on Monday in which covered elements of this. At that time, I noted the response of the Minister, who said that the word “person” used in this legislation—I am not a litigator but a legislator, and I continue to learn about some of these matters—could also include an employer, which I also somewhat address in aspects of some of these amendments.
One of my questions is: who will this benefit? My reason for putting forward Amendment 272BA is to try to make it explicit that we are not talking about money going off to a trade union, which might provide legal advice or legal assistance. When we discussed it the other day, we never got to the bottom of what “any other … assistance” may be. I appreciate that that might be a catch-all, but it would be helpful to get some examples of what Clause 114(2)(c) would cover.
When we get into this—I appreciate that the noble Lord, Lord Fox, has tabled an amendment about legal aid in a later group—it is important to ask: where is this really going? The EHRC has some similar powers to finance proceedings. When I asked the EHRC to set out the amount of money, it said that, as of last month, there were four live cases and that, since April 2020—five years ago—it had spent £1.2 million on this sort of provision. Recognising that the EHRC can already provide assistance on aspects of discrimination and the like, I wanted to try to explore, in this clause stand part debate, what the Government were signing themselves up to and, as I pointed out, to whom it would go.
Amendment 272D is intended to be a probing amendment to examine how much an individual could claim—whether for advice or for representation—and to consider how often people might be turning to the fund that the Government seek to put forward. Should we cap that? How many times can somebody go to get basically free advice? I do not know who would even provide it. We could well consider that it should be provided by only the government legal service, under the auspices of the Attorney-General. I cannot imagine that that is what the Government are thinking, but it would be useful to understand who they think will deliver this and how.
Part of the role of the single enforcement body was supposed to be a place for anyone to go to get advice for free. So I am trying to understand what further is in this. By the way, the Government’s intention— I think it is in their manifesto and other papers they have developed—is that employers can go to the new fair work agency to get advice on how this all works and what they should do as employers. So I am interested to understand where else this could be.
Turning to Amendment 272E, I am conscious that—as was rightly pointed out to me a few weeks ago by, I think, the noble Baroness, Lady O’Grady of Upper Holloway—Clause 114(2) says “may provide”, rather than “must”, so it will not become a right to get this money. But it would be fair for statutory guidance to be developed and published—ideally, as quickly as possible—on the result of this subsection coming into effect. Candidly, if people anticipate that extra funding will be available, it is important that they understand what expectation they should genuinely have.
In Amendment 272F, I am trying to address the situation that just came up in the debate on Clause 113. I find it hard to understand how we can be in a situation where, having taken over a case, it would go against the sense of natural justice that the worker themselves would then not be able to make representations to the tribunal, or indeed to other courts, to help consider why it has been taken over, when they did not want such action to do. I felt that it was important that, frankly, the Government should pay for that. For me, that felt like a sense of natural justice in that regard.
Amendment 272G concerns something I have raised before, but I wanted to specifically address it. I find it astonishing that the Government are opening up this fund for people to get advice—which, I assume, they cannot get from the fair work agency—but they will not be allowed to use it towards mediation. The answer given in previous debates was, “Well, people can just go to ACAS”. That is right, they can—and ACAS is free. However, while it is free for early conciliation, it is not free for more advanced mediation.
Baroness Noakes (Con)
My Lords, in this group of amendments, I have the stand part notice for Clause 114. I support the several amendments in this group in the name of my noble friend Lady Coffey, many of which are probing amendments to try to find out more about this clause. I could find no clear rationale that the Government have given for Clause 114, in the sense of providing a rationale for the state—that is to say, taxpayers—funding the legal and other costs of civil proceedings in employment matters cases.
The scope of Clause 114 is huge. Not only does it cover the whole of employment, trade union and labour relations law, but the intended recipients seem to be unlimited. My noble friend Lady Coffey referred to the use of “person”. Subsection (1) refers to
“a person who is or may become party to civil proceedings”,
which covers a huge number of persons, and there does not seem to be any clear target for this clause. Of course, as we have heard, the funding can also extend to litigation involving non-employment matters, which seems extraordinary to me. All of this adds up to Clause 114 being very wide.
We already have in the UK a system for providing support for people in legal cases. It is called legal aid. It costs the taxpayer around £2 billion a year, nearly half of which is for civil litigation. That already has rules for employment tribunal support, where there is no funding for legal representation but there may be funding for advice on preparing cases. Successive Governments have had to make hard choices about what will be funded by legal aid in order to keep the cost of it within reasonable bounds for taxpayers as a whole but, now, with Clause 114, the business department is going to undermine that completely by taking powers to fund legal cases completely outside of the structures and limits that have been created for the legal aid system. The Government are again showing that they are, at heart, a two-tier Government, with unlimited legal aid by the backdoor for some favoured employment cases but tough eligibility criteria and financial limits for everybody else.
I now turn to the costings, which my noble friend Lady Coffey mentioned briefly. I could not find out what Clause 114 is going to cost. There is a limited amount of information in the paperwork that surrounds the Bill on the estimate of the overall costs for the fair work agency but, as far as I could find, there is no reference to how much the implementation of this proposal to fund legal costs will be within that totality. So my question to the Minister is really quite simple: what are the Government’s estimates of what Clause 114 will cost?
Going beyond that into the underlying assumptions, how many cases do the Government expect to bankroll every year? Will the Government support only cases with a better than average chance of success, or will they also fund no-hopers? What is the average cost of the cases that they think they will fund using the powers under Clause 114? What are their assumptions about cost recovery? I would have expected to find all these things analysed in detail somewhere in the papers, but I could not find anything. I hope the Minister will be able to answer these specific questions, and maybe also explain the lack of analysis in the documentation that the Government have prepared surrounding the Bill so far.
As I said earlier, I support my noble friend Lady Coffey’s amendments in this group, and I will listen carefully to what the Minister says in response to those amendments and, indeed, on Clause 114 standing part overall. My view is that, in the absence of good justification and a good understanding of the costs of Clause 114, it should not stand part of the Bill.
Lord Jackson of Peterborough (Con)
My Lords, I commend my noble friends’ excellent speeches on this clause. I press the Minister on what the Explanatory Notes say about subsection (4), because we have talked about the concept of persons and what that actually means. My noble friend spoke earlier about ministerial powers and the lack of information on costs, which should have been in a proper and more detailed impact assessment but is not. It is not in any supporting material, including the Labour Party manifesto for the general election. Presumably, the Minister will say that such information about the form and function of the clause will be developed in secondary legislation.
The sentence in the Explanatory Notes about subsection (4) is extraordinary, because it touches on what is potentially ultra vires and will certainly, I think, be subject to litigation or judicial review. Given that this is an Employment Rights Bill about labour relations and employment, it says:
“Subsection (4) makes provision for situations where proceedings relate partly to employment or trade union law … and partly to other matters”.
I just do not understand what those other matters can be. This is an employment law Bill. It is about labour relations and the relationships between employers, trade unions and a workforce. What other matters are within the bailiwick of Clause 114? I think we need to press the Minister on that, because we are being invited to give a blank cheque with taxpayers’ money to something that is very opaque, we do not understand, is not costed and is not detailed. On that basis, the Minister should address those specific issues.
Lord Hunt of Wirral (Con)
My Lords, I thank my noble friends Lady Coffey, Lady Noakes and Lord Jackson of Peterborough for some penetrating questions about the power to provide legal assistance as set out in Clause 114. First, I would like the Minister to share with us what discussions have been held with the Lord Chancellor and the Secretary of State for Justice. A number of the points made by my noble friends relate to the fact that legal aid is already available in certain circumstances, so what is this all about and, as my noble friend Lady Coffey asked, who is this going to benefit?
Lord Katz (Lab)
I do not want to disappoint the noble Lord, but I am afraid he is stuck with me again. I thank the noble Baroness, Lady Coffey, for tabling amendments on legal assistance and the noble Baroness, Lady Noakes, for notifying us of her opposition to Clause 114 standing part of the Bill.
I will start with Amendment 272BA. To be fair, the noble Baroness, Lady Coffey, and others indicated that this has overlapped with not only previous discussions today but discussions of groups on previous days in Committee. As my noble friend Lady Jones said on Monday, the drafting of Clause 114
“was carefully thought through and is deliberately broad and inclusive”.—[Official Report, 16/6/25; col. 1883.]
It is only fair that it covers not just employees but employers and trade unions. To answer a specific question from the noble Baroness, Lady Coffey, about what other assistance could be provided, this could include help in understanding procedural requirements, preparing documents or accessing expert input. It is designed to be flexible and responsive to individual needs. Given this, we cannot support Amendment 272BA.
Amendment 272D would restrict the amount of support that could be offered to any individual through this power. It is not a reasonable measure. I understand that it is a probing amendment, as the noble Baroness, Lady Coffey, said, but the small amount proposed in the amendment would leave the power meaningless. As we have discussed, this would be, although it is not intended as such, tantamount to a wrecking proposal, because it is such a small amount. Obviously, as we have discussed, this is a manifesto commitment. The fair work agency should be able to decide how much support it can offer, without being constrained to random financial limits for no good reason.
Amendment 272E would create an additional process before the power can be used. Part 5 of the Bill already calls for the fair work agency to publish an annual strategy, as we discussed on an earlier group. Requiring yet another administrative document in this way would be burdensome and unnecessary, and I think we share across the Committee a desire to reduce bloated bureaucracy—a phrase that has already been used this afternoon.
Turning to Amendment 272F, the powers under Clause 114 will operate in tandem with those in Clause 113, but workers will not always want to be separately represented in proceedings brought by the fair work agency. They can be represented, but they do not have to be. Therefore, we cannot support this amendment.
Amendment 272G would mean that the fair work agency would duplicate ACAS’s existing responsibilities regarding dispute resolution. This power is not intended to be a replacement or a duplication of existing support. We cannot support this amendment, as it would complicate the enforcement landscape when we are trying with this Bill to simplify it.
Amendment 272H would limit the scope of this power. It would create situations where legal assistance would have to cease, even if proceedings continued, leading to unfairness. It could lead to people being unable to continue their cases, which could cover other matters such as discrimination, because support could no longer be offered. The fair work agency should be able to decide what is appropriate and fair in each case.
Amendment 272I would put an unnecessary burden on the Secretary of State to have insurance in place before being able to provide advice on a settlement agreement. To be fair to the noble Baroness, Lady Coffey, she sort of indicated uncertainty around this. To be clear, this amendment wholly contradicts established government practice. I refer her to paragraph 4.4 of Managing Public Money, which sets out that the Government should generally not take out commercial insurance and it is not good value for money.
To summarise on Clause 114, the legal system can be intimidating, particularly for vulnerable workers or those from marginalised backgrounds. To repeat what my noble friend Lady Jones said in the previous group, many vulnerable workers are reluctant or unable to bring their cases to tribunal to enforce their employment rights, and this has serious consequences. Rogue employers exploit this, breaking employment law, and get away with it. For instance, Citizens Advice suggests that high-paid workers are more likely to file a case with an employment tribunal than lower-paid individuals, despite the latter being more likely to have their rights infringed. As I said, this lets rogue employers off the hook, and that is unfair for the vast majority of businesses, which we all know do the right thing by their staff and want to. It is unfair for the vulnerable workers involved—to state the obvious—who are being denied their rights, and it is unfair for the rest of the workforce, who are denied work opportunities due to illegal practices undercutting them.
As was said in the last group, that is why, in the plan to make work pay—again, a manifesto commitment—we set out that the fair work agency will have powers to bring civil proceedings to uphold employment rights. The Bill will give the fair work agency the power to bring civil proceedings in the employment tribunal to uphold rights. This is a critical power, particularly for situations where a worker feels unable to bring proceedings themselves. But there are occasions where a person is able to bring proceedings in the tribunal or another court but needs assistance, or where the case has wider ramifications and the person concerned could benefit from the fair work agency’s expertise.
Lord Hunt of Wirral (Con)
My Lords, can the Minister remind us to what extent there has been consultation with the Secretary of State for Justice? Has the Lord Chancellor been involved in putting together this scheme, which is going to sit alongside legal aid, for which she is responsible? It would be really helpful if the Minister could make sure that the Government is joined-up in putting forward what is, in a way, as my noble friends have pointed out, quite a blank cheque, which has not properly been costed. Can he put us right on all this, please?
Lord Katz (Lab)
I am more than happy to. The noble Lord, Lord Hunt, anticipates the comments that I was just about to come to—but we can address the point now. The noble Lord, Lord Jackson of Peterborough, focused on this as well. This is not expanding legal aid. The power is intended to give the fair work agency a discretion to provide support in employment-related cases. It is not an alternative to legal aid and it will be used in specific cases. The Government will set out how and when the fair work agency will exercise its power in due course and will discuss this with a range of stakeholders. I reassure the noble Lord, Lord Hunt, we have regular conversations with the Ministry of Justice, including on the Bill’s implementation.
I return to what I was saying about the importance of ensuring that the power of legal advice is appropriately bounded. It cannot be used to fund dispute resolution facilities delivered through other routes. Importantly, the clause protects the integrity of the courts and tribunals by confirming that nothing in the clause overrides existing restrictions on representation imposed by legislation or judicial practice. This clause complements the fair work agency’s wider role in promoting access to justice and fair treatment in the workplace. It provides a vital lever for supporting individuals who might otherwise face legal barriers alone or for ensuring compliance with relevant law, and it delivers our manifesto commitment on which Members in the other House were elected.
The noble Baroness, Lady Noakes, asked about the costs. These will be set out in due course and will be discussed with a range of stakeholders, particularly employers, trade unions and employees.
Baroness Noakes (Con)
That was a rather surprising statement. Is the Minister saying that these costs are not included in the estimates that have already been given for the costs of the fair work agency, which were included in the various documents surrounding the Bill? He has just implied that it will be done later. It is rather extraordinary to produce a clause in a Bill without having a costing for it. Can I press him again on what the costs are, whether they are included in the existing estimates of costs for the fair work agency and, if not, when they will actually be made clear?
Lord Katz (Lab)
I thank the noble Baroness for that intervention. The costs are not factored in. As I said, they will be set out in due course, following discussions with a range of stakeholders. I hope that this has persuaded the noble Baroness that Clause 114 should stand part of the Bill.
I turn finally to the amendments on recovering costs for legal assistance. Regarding Amendment 272J, if an individual has received free legal assistance from the fair work agency, any cost award should be returned to where that assistance came from. To be clear, a cost award is separate from any other awards a tribunal may make in favour of an individual. This amendment will prevent the fair work agency recovering costs and could lead to situations whereby individuals receiving legal assistance could receive money for costs they had not incurred. I hope noble Lords will agree that this is completely unreasonable.
On Amendments 272K and 272L, removing the ability to provide for the appointment and expenditure incurred is unreasonable and could lead to uncertainty about what expenditure of the Secretary of State is recoverable. In addition, while Amendment 272L looks consequential to Amendment 272K, it would actually remove the requirement for regulations under Clause 115(5) to be subject to any parliamentary procedure. I am sure that this is not the intention of the noble Baroness, Lady Coffey. Needless to say, we oppose removing requirements of parliamentary procedures in this way.
In response to noble Baroness’s question on why the regulation for Clause 115(5) is negative, this follows precedent from the Equality Act. I indeed note and point out to the noble Baroness that the Delegated Powers and Regulatory Reform Committee has raised no concerns with the Government about this power.
The legal assistance powers within the Bill are necessary to deliver our manifesto commitment to strengthen enforcement and improve outcomes for workers through a fairer, more acceptable system. These amendments would hamper that goal and might even unintentionally limit access to justice. The current drafting has been carefully considered. It is both deliberate and necessary. I therefore ask the noble Baroness, Lady Coffey, to withdraw Amendment 272BA.
Baroness Noakes (Con)
In the case of the noble Lord’s response to this group of amendments, and the response to the previous group of amendments by the noble Baroness, Lady Jones, the Ministers have claimed that these clauses are covered by manifesto commitments. The Labour Party manifesto is not something I carry around in my handbag, but, from memory, I do not think it covered these particular clauses. What makes me so sure that this is the case is that these two clauses were introduced in the other place on Report. They were not part of the original Bill that was introduced. That means, inter alia, that they received no substantive examination or discussion whatever in the other place. More importantly, this suggests to me that they were not a part of the original package that can claim manifesto support. I think we will want to examine that extremely carefully. If the Minister has a response now, with a chapter and verse in the manifesto, I will be happy to look it up afterwards, but I think we find unconvincing this part of the Government’s defence of these clauses.
Lord Katz (Lab)
I do not have chapter and verse but a page number. Noble Lords can find it on page 16 of the Labour’s Plan to Make Work Pay document, which was part of our manifesto.
Lord Jackson of Peterborough (Con)
I must press the Minister. I have looked at the Labour’s Plan to Make Work Pay document and it does not make reference to de facto legal aid. It says:
“We will also consider measures to provide accessible and authoritative information for people on their employment status and what rights they are owed, tackling instances where some employers can use complexity to avoid legal obligations”.
That is very different to what the Minister has outlined to your Lordships’ House.
Lord Katz (Lab)
I do not want to extend the debate too much or do too much quoting across the Dispatch Box but, to counter that, Labour’s Plan to Make Work Pay talks about establishing a single enforcement body that
“will have the powers it needs to undertake targeted and proactive enforcement work and bring civil proceedings upholding employment rights”.
To a fair-minded person that is pretty clear.
Baroness Coffey (Con)
My Lords, this has been an exceptionally revealing debate on this group of amendments and the clause more broadly. I somewhat agree with the Minister on creating the ability to initiate legal proceedings—which, by the way, continues some of the work already being done by the existing authorities—but the Bill does not refer to being able to do that without the consent of the worker, which will surprise a lot of people, and absolutely does not make reference to the level of financing, which we have just discussed in relation to Clause 114.
Another point I noted is that, on Monday, the Minister, the noble Baroness, Lady Jones of Whitchurch, referred to “employees and employers”, but the Minister at the Dispatch Box today has been very clear that this is also about funding trade unions. As I said, this has been a revealing debate and one that, after I discuss it with my Front Bench, we may explore further on Report. With that, however, I beg leave to withdraw the amendment.
Lord Goddard of Stockport
“Legal aid in employment tribunals(1) The Secretary of State must, within six months of the day on which this Act is passed, lay before Parliament a report on the options for expanding the right to legal aid in employment tribunals.(2) The report under subsection (1) must consider—(a) the impact of employers’ compliance with measures contained within this Act, and(b) the impact on employees’ personal finances.”Member’s explanatory statement
This new clause would require the Secretary of State to report on the impact of expanding the right to legal aid in employment tribunals within 6 months of the passage of this Act.
Lord Goddard of Stockport (LD)
My Lords, for the sake of clarity, we on these Benches fully support the Government on expanding employment legal aid beyond discrimination cases to improve fairness and efficiency and also on the importance of maintaining the power of employment tribunals to ensure summary judgment, speed up proceedings and reduce unnecessary hearings. However, we have concerns over the existing backlog of employment tribunals, which we have debated several times on previous evenings, which is causing delays of up to two years and making the system very difficult to navigate.
I strongly support Amendment 273, tabled by my noble friend Lord Fox, which would
“require the Secretary of State to report on the impact of expanding the right to legal aid in employment tribunals within 6 months of the passage of this Act”.
This modest but important proposal recognises the reality facing too many claimants today. Legal aid in employment cases is currently restricted almost entirely to discrimination claims, leaving workers pursuing other serious issues such as unlawful deduction of wages, unfair dismissal and whistleblowing without any publicly funded legal support. These are not simple matters.
For claimants without legal training, navigating the tribunal process, understanding evidential requirements and articulating legal arguments can be incredibly challenging. This lack of access undermines both fairness and efficiency. If claims are poorly presented or inadequately understood, they are less likely to succeed and more likely to absorb more of the tribunal’s valuable time. Given the current backlog of employment tribunal cases in which claimants often wait for more than two years before their cases are heard, the process can feel effectively impossible to engage with. This amendment would, based on evidence, begin to build the case for change. I hope that the Minister will look on it constructively.
I also welcome my noble friend Lord Fox’s Amendment 323, which seeks to ensure that employment tribunals continue to have the power to make summary judgments in cases brought under this Act. Tribunals already use this mechanism to resolve matters early when one party has no reasonable prospect of success. It is an essential part of an efficient system that avoids unnecessary hearings and reduces pressure on the tribunal’s time. With the Bill creating new routes to claim and potentially increasing the volume of cases, the continued ability to make summary judgments in those procedures will be more important than ever. It provides certainty to respondents facing unmeritorious claims and reassures claimants that their cases will be dealt with proportionally and swiftly when they are clearly valid. I will be grateful if the Minister can confirm that this power will remain fully enforced under the new regimes and that guidance will reflect the continuing relevance of these points.
Lastly, I note that Amendments 279GA, 330ZA, 330D and 334A by the noble Lord, Lord Sharpe, are concerned with ensuring that the employment tribunal system has the capacity and resourcing to absorb these responsibilities. Those are legitimate concerns and considerations that the Minister should address. Tribunal delays are already a source of frustration for many users, and it is right that we consider how implementation will interact with the wider system. I urge caution, however, against any suggestions that reform must wait until conditions are perfect. A parallel process is needed, with sensible, targeted reform on one hand and sustained investment in the system on the other. I beg to move.
Baroness Coffey (Con)
My Lords, my Amendment 279GZA seeks to understand what “and, in certain cases” means in Clause 149. I would be grateful for an explanation. I looked extensively in Schedule 12 and saw only the insertion of a regulation to do with Northern Ireland. I would be grateful to understand that.
I am happy to support Amendment 323, which seems a sensible way of trying to ensure that justice is delivered effectively and people can still have fair access while also making sure that we make the best use of employment tribunal judges’ time.
Lord Sharpe of Epsom (Con)
My Lords, I am grateful to my noble friend Lady Coffey for introducing her amendment and also to the noble Lord, Lord Goddard, for speaking to the amendments of the noble Lord, Lord Fox, the first of which proposes a report on the expansion of legal aid in employment tribunals. It would not itself change entitlement but seeks to prompt a structured exploration of the options. Legal aid is, of course, a complex and often contested area, and this amendment simply calls for a government-led review that considers both employer compliance and the financial position of workers. It is reasonable to assess whether the current system adequately supports access to justice in employment disputes.
I have a question for the noble Lord, Lord Fox. I will discuss with him outside but, just to get it on the record, I am curious to know whether the “report on the options”, which he describes in subsection (1) of the proposed new clause in his lead amendment, extends to small and medium-sized employers as well. I am interested to know whether he thinks they should be included within that survey based on the fact that many of them will also suffer some financial hardship.
On the proposed new clause on summary judgments in employment tribunals in Amendment 323 by the noble Lord, Lord Fox, such a power could offer a means of reducing the burden on tribunals, improving efficiency and focusing resources on cases where the issues genuinely require full examination. In short, both amendments are interesting and I look forward to hearing the Minister’s response.
Baroness Jones of Whitchurch (Lab)
My Lords, I will first speak to Amendment 279H in my name, which increases the time limit for making a claim to an employment tribunal in relation to paid time off for employee representatives in consultations on certain changes to occupational and personal pension schemes from three months to six months. This would amend the employment tribunal time limit that is set out in the Schedule to the Occupational and Personal Pension Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006.
This amendment is essential to ensure consistency with the time limits for the majority of tribunal claims which are being amended to six months throughout the Bill. This is a technical amendment which brings the provisions on consultations on pension schemes in line with the other clauses in the Bill regarding the increase in time limits which have been set out.
Increasing tribunal time limits will provide employees and employers more time to resolve disputes internally or through the conciliation process as well as more time for employees to consider the merits of bringing a claim to an employment tribunal. Judges will continue to have the discretion to hear out-of-time claims on a case-by-case basis.
Amendment 279GZA from the noble Baroness, Lady Coffey, seeks to provide that the extension of employment tribunal time limits from three to six months does not apply in respect of industrial tribunals in Northern Ireland. We have worked closely with the Northern Ireland Executive to develop an approach to extending time limits which respects the Northern Ireland Assembly’s competence to legislate on devolved matters. Where time limits are in UK-wide legislation that extends to Northern Ireland and that relates to matters that are reserved, such as the National Minimum Wage Act 1998, this Bill amends the time limits for bringing a claim to the industrial tribunal in Northern Ireland. We will continue to work with the Executive to consider implementation and, if appropriate, these changes may come into force at different dates for Great Britain and Northern Ireland. The Bill does not amend time limits in legislation that extends to Northern Ireland and is transferred—that is, devolved powers.
On Amendments 273 and 323, I understand the motivation of the noble Lord, Lord Fox, in tabling his amendments, and I thank the noble Lord, Lord Goddard, for speaking to them so ably. In order for the reforms we are making through this Bill to be effective, it is vital that workers can enforce their employment rights. As noble Lords know, tribunals, including employment tribunals, are designed to be informal, accessible and low-cost means of accessing justice. I agree with the noble Lord, Lord Goddard, that the backlog of tribunal claims at the moment is unacceptable. We are taking steps to address that backlog in conjunction with the Ministry of Justice, and the fair work agency can also play a part in easing that load. We will be able to debate the measures that we are taking further in later groups.
However, I would like to reassure the noble Lord that legal aid is available, subject to means and merits tests, in relation to discrimination and breaches of the Equality Act 2010. Where an issue falls outside the scope of legal aid, funding may still be available through the exceptional case funding scheme. Of course, members of trade unions will receive advice and representation anyway as part of their membership.
Turning to the amendment of the noble Lord, Lord Fox, on employment tribunal summary judgments, I can reassure the noble Lord, Lord Goddard, that employment tribunals have a wide range of existing powers to address weak claims or responses, including strike-out and default judgments, to achieve the aims set out in this amendment. The strike-out rule in its framing and application is already similar to that of Rule 24 in the Civil Procedure Rules. It allows employment tribunals to strike out half or all of a claim or response, including where there is no reasonable prospect of success. I therefore ask the noble Lord, Lord Goddard, to withdraw Amendment 273.
Lord Goddard of Stockport (LD)
I thank all noble Lords—a small but perfectly formed band on this group—for their contributions to the debate. The contribution of the noble Lord, Lord Sharpe, was reasonably complimentary on my noble friend Lord Fox’s amendment, and when I speak to my noble friend, I will mention the point about small and medium-sized companies; there is some mileage in that, if we have further discussions. The noble Baroness, Lady Coffey, is fast becoming my buddy again for supporting in essence these amendments—to my certain knowledge, she has never called any of our proposals “bonkers”, so she gets an extra bonus point for that as well.
We support the Minister’s amendment, which brings clarity. For me, it shows an understanding that the Minister gets it; sometimes in these debates on the Floor of this Chamber, such as in the previous debate about litigation and whether it was known about by somebody, some people do not get it and you need to bring it back to the real world. Tribunals are very stressful for people and very complicated, so the simpler and more efficient we can make it, the better. But that does come with a price. I honestly think that, working together, we can deliver this Part with a degree of certainty, because all parties want this to happen. On this occasion, therefore, I am happy to withdraw the amendment.
Member's explanatory statement
This amendment makes a minor drafting change.
“The Security Industry Authority.”Member's explanatory statement
This amendment would enable information obtained in connection with the exercise of enforcement functions under Part 5 of the Bill, or functions under or by virtue of clause 113 or 114 (powers in relation to civil proceedings), to be disclosed to the Security Industry Authority for the purposes of its functions.
Baroness Hamwee
“Restrictions on disclosure: immigration and nationality purpose(1) Nothing in sections 132 or 133 authorises information to which subsection (2) applies to be used for a purpose within section 40(1) of the UK Borders Act 2007.(2) This section applies to information disclosed to an enforcing authority— (a) regarding a person who has been the subject of labour abuse, for the purpose of that person requesting or receiving support or assistance, or(b) by a person who has been witness to labour abuse, for the purpose of evidence or other assistance in connection with an investigation into or a prosecution or other legal proceedings relating to that abuse.(3) Paragraph 4 of Schedule 2 to the Data Protection Act 2018 shall not apply to personal data to which subsection (2) applies.(4) In section 20 of the Immigration and Asylum Act 1999 after subsection (2B) insert—“(2C) This section does not apply to information to which section (Restrictions on disclosure: immigration and nationality purpose) of the Employment Rights Act 2025 applies.”(5) In this section “labour abuse” includes—(a) a labour market offence,(b) an offence under the Gangmasters (Licensing) Act 2004, and(c) an offence under the Modern Slavery Act 2015,in England, Wales, Scotland or Northern Ireland or a suspected or alleged offence.”Member’s explanatory statement
This new secure reporting Clause would prevent information disclosed about a victim or by a witness of labour abuse being used for a purpose within section 40(1) of the UK Borders Act 2007. This aims to help ensure that migrants with insecure status are able to equally benefit from the improvements in employment rights brought by this Bill.
Baroness Hamwee (LD)
My Lords, Amendment 273P is a real-world amendment, to echo my noble friend. I am very conscious that I have a single amendment to this Bill, that others have laboured into what is day 10, I think, and that noble Lords are waiting for the important discussion on the Casey review, so I will try to be almost telegraphic.
This amendment is about a firewall, with the objective of protecting workers who are in great need of protection, so it is squarely within the fair work agency’s client base, if you like. The firewall would restrict the disclosure for use for immigration purposes of information about someone who has suffered or witnessed labour abuse. That may sound counterintuitive: surely these are people about whom all the agencies of the state should have information. In the case of migrant workers, the situation is not so straightforward. It was during the passage of the Modern Slavery Act 2015 that I first heard about the conditions in which some overseas domestic workers existed—I use that term rather than “lived”. Slavery was the right term. A change in the rules was made, but it was minor and quite inadequate. Our law did not and does not protect them and all migrant workers as it should.
Migrant workers, not only overseas domestic workers, are particularly vulnerable to exploitation and abuse, not just because of the consequences if their existence comes to the attention of immigration authorities but because of their fear of the consequences. If you do not know your way around the system, you are on the wrong side of the power balance with an unscrupulous employer who can threaten that you will be detained or deported, or that you will have your children taken away, so you cannot take the risk of reporting abuse and exploitation to anyone in authority.
I understand that that fear is well founded. I am told by the sector that evidence indicates that data is often shared between labour market enforcement agencies, the police and immigration enforcement. They have no obligation to share, but they do. In a way, that is not surprising; they have their own jobs to do. I am not surprised, because I have a long history of opposition to paragraph 4 of Schedule 2 to the Data Protection Act, which allows that sharing—opposition with which someone who is now in a very high place in the current Government became associated and led the troops into the right Lobby.
The current situation has a widespread effect. It fosters mistrust of migrant communities, prevents the police and labour inspectors doing their jobs properly, and drives down conditions for all workers. Secure reporting has been implemented elsewhere, including in the Netherlands and in Spain, and I am pleased to say that Surrey Police has implemented a firewall and the Greater London Authority is undertaking a pilot. Had I more time, I would explain the detail.
Secure reporting mechanisms are badly needed in many sectors, such as agriculture, health, social care, cleaning and domestic work. Your immigration status should not mean that you should not have access to safe, decent working conditions and be protected against abuse and exploitation. I am grateful to the noble Lord, Lord Watson of Invergowrie, and the right reverend Prelate the Bishop of London, who have signed my amendment, as has my noble friend Lord Paddick. In turn, I have signed his two amendments in this group. They are probing amendments. They are hugely important because they seek to ensure that the fair work agency, which is not a legal entity but will be an agency of the Department for Business and Trade created administratively, can carry out all the powers and functions of the GLAA, or that somebody does, because what the GLAA is able to do in this area must not slip out of the legislative framework. I beg to move.
Lord Paddick (Non-Afl)
My Lords, I will speak to Amendments 279ZA and 279ZB, which are in my name and that of my friend, the noble Baroness, Lady Hamwee. Before I speak to them, I will say how much I support her Amendment 273PA.
My amendments are probing amendments, as the noble Baroness just said, to seek reassurances from the Minister that the fair work agency will have the capacity and focus to maintain the safeguards provided by the Modern Slavery Act that are currently undertaken by the Gangmasters and Labour Abuse Authority—the GLAA. I am grateful to Dame Sara Thornton, a former Independent Anti-Slavery Commissioner, and her colleagues at the University of Nottingham and Nottingham Trent University for highlighting these issues.
The GLAA has two important responsibilities under the Modern Slavery Act in this context: it is a first responder referring victims of modern slavery into the national referral mechanism, and it has a duty to notify the Secretary of State for the Home Department in cases where victims of modern slavery refuse to be referred, to ensure that the Home Office has a comprehensive understanding of the nature and extent of modern slavery and those affected by it. My understanding is that, under this Bill, the GLAA will be abolished and its responsibilities will be taken over by the fair work agency, but it is not clear from the legislation whether the GLAA’s first responder status and duty to notify will also be transferred, or whether amendments such as those proposed are necessary to ensure that those important responsibilities and duties are carried out by the fair work agency once the GLAA is abolished.
In addition, the GLAA is focused on protecting vulnerable and exploited workers and on illegal activities such as human trafficking, forced labour and illegal labour provision, whereas the fair work agency will have a much wider remit, including what is currently in HMRC’s national minimum wage unit and the Employment Agency Standards Inspectorate. Staff expertise in modern slavery may be lost, and if the fair work agency is not adequately resourced, the emphasis is likely to be on compliance rather than enforcement. By ensuring that the fair work agency has first responder status and a duty to notify, it is more likely to retain its level of expertise in modern slavery.
Under Section 43 of the Modern Slavery Act 2015, the GLAA has a duty to co-operate with the Independent Anti-Slavery Commissioner, enabling the commissioner to access unpublished information that assists in understanding and responding to modern slavery in the UK. Again, it is unclear whether the fair work agency will also have a statutory duty to co-operate with the Independent Anti-Slavery Commissioner in the same way as the GLAA, which it is replacing. The second amendment would make that duty explicit.
Can the Minister reassure the Committee that the focus on modern slavery is not being lost or diluted by the absorption of the Gangmasters and Labour Abuse Authority into the fair work agency, either through a lack of resources or a lack of expertise, and that the GLAA’s statutory responsibilities as a first responder, its duty to notify and its duty to co-operate with the Independent Anti-Slavery Commissioner will not be lost or diluted as a result of these changes? I look forward to the Minister’s response.
Baroness O'Grady of Upper Holloway (Lab)
My Lords, I support Amendment 273PA in the name of the noble Baroness, Lady Hamwee. I want to give an example of why this amendment is so important. Following a five-month freedom of information battle, the Bureau of Investigative Journalism was finally given access to 19 farm inspection reports produced by the Home Office between 2021 and 2022. Nearly half of the 845 seasonal migrant workers interviewed raised welfare issues including racism, wage theft and threats of being sent home. In nearly two-thirds of farms inspected, workers said that they were not always paid for the hours they spent at work, off sick or travelling, or that they faced pay deductions beyond the maximum allowed by law. Workers who complained were ignored or told they could leave the farm and go back to their home countries. One visa sponsor was recorded saying:
“Look, do you want to go home? Shush then”,
by workers protesting about working conditions.
A report by the Independent Chief Inspector of Borders and Immigration found that none of the allegations raised during these inspections was ever investigated by the Home Office. Workers understandably concluded that the Home Office was more interested in checking their immigration status than upholding their rights and dignity at work. The only way that the fair work agency can do its job of stamping out exploitation is to guarantee safe reporting. Only then can migrant workers speak out about exploitation at work without fear that it will result in a bad employer silencing them by removing their visa. Ultimately, as the noble Baroness, Lady Hamwee, said, the rights of all working people are only ever as strong as those of the most vulnerable workers. This amendment seeks safe reporting that will benefit workers and decent employers alike. I hope my noble friend the Minister can support it too.
Baroness Coffey (Con)
My Lords, I am conscious of the sentiments expressed here, but it would put the Government and the Secretary of State in a very difficult legal situation if they were to hold information that they were not allowed to pass on to relevant authorities within the rest of government. I hear what the noble Baronesses have said, but I do not know, with all the other rights that are starting to come through this Bill, why anyone should be afeared, especially when they are here on a legitimate visa as in the example to which the noble Baroness, Lady O’Grady of Upper Holloway, has just referred. I am conscious of some of the exploitation, but I believe that same sponsor was suspended from sponsoring any more visas. I was not aware of what the Home Office did or did not do, but restricting the Secretary of State from formally upholding the law is quite a worrying trend.
Lord Hunt of Wirral (Con)
My Lords, I thank the noble Baroness, Lady Hamwee, whom I had the honour to serve when she chaired the Home Affairs Select Committee. She has raised a number of key points, as has the noble Lord, Lord Paddick, and I thank the noble Baroness, Lady O’Grady of Upper Holloway, and my noble friend Lady Coffey for their speeches as well.
Let me make it absolutely clear: modern slavery remains one of the gravest human rights abuses of our time, and tackling it requires vigilance, clarity and effective enforcement. It is crucial that the agencies tasked with identifying and assisting survivors and with co-operating closely with the Independent Anti-Slavery Commissioner have clear mandates and necessary powers to act decisively. While the specific amendments before us seek to clarify the transfer of roles from the Gangmasters and Labour Abuse Authority to the fair work agency, the wider point is this.
Enforcement bodies must be both effective and well co-ordinated to respond to the complexities of modern slavery. Without this, vulnerable individuals risk slipping through the cracks, and the machinery of justice and protection loses its impact. Ensuring transparency about which bodies are responsible for what and guaranteeing that they are properly equipped underpins our broader commitment to eradicating modern slavery. It is not just about legal technicalities but about safeguarding human dignity and upholding fundamental rights.
Lord Katz (Lab)
I thank the noble Lord, Lord Paddick, for tabling Amendments 279ZA and 279ZB and the noble Baroness, Lady Hamwee, for her Amendment 273PA. I reflect that on an earlier group we heard from the noble Lord, Lord Jackson of Peterborough—whom I am glad to see now in his place—with his Amendment 273PB, so we have seen two ends of the spectrum in terms of an approach to information sharing and enforcement with modern slavery. One might speculate that perhaps we have, in a Goldilocks way, achieved the right balance with what we are proposing in the Bill. I hope noble Lords agree.
Turning to Amendment 279ZA and 279ZB, I understand that these are probing amendments and the noble Lord is seeking reassurances that the Gangmasters and Labour Abuse Authority’s vital work tackling labour abuse will continue under the fair work agency. Let me provide that reassurance very clearly now. Action on labour abuse and modern slavery will be core and central to the mission of the new fair work agency. I am happy to join in the sentiment set out by the noble Lord, Lord Hunt of Wirral. Modern slavery is a stain on our society as well as on our economy. We are determined as a Government to continue the work of previous Administrations in stamping it out. My noble friend Lady O’Grady of Upper Holloway set out very starkly for us why this continued exploitation needs our continued focus and vigilance.
All the Gangmasters and Labour Abuse Authority’s functions, including in relation to labour abuse, will transfer to the Secretary of State. Its vital work in this area will continue. We are also committed to ensuring that there is no disruption as we set up the fair work agency. The fair work agency will continue to work in close partnership with Eleanor Lyons, the Independent Anti-Slavery Commissioner, as the GLAA does now, to identify and disrupt patterns of exploitation across sectors such as agriculture, construction and adult social care. The Bill lays the foundation to build on that successful working relationship between the commissioner and the GLAA. Clause 132 and Schedule 9 together will enable the two-way sharing of information between them where this will help both fulfil their statutory functions. To address the questions from the noble Lord, Lord Paddick, the fair work agency will still have first responder status and a duty to notify.
Regarding Amendment 273PA in the name of the noble Baroness, Lady Hamwee, I appreciate the noble Baroness’s concerns but there is a need for information to be shared with the Home Office to help protect the public, including vulnerable migrants, from harm. The need for this was recognised by Parliament in the Immigration and Asylum Act 1999. Mechanisms already exist to support those of insecure immigration status who may be victims of abuse. The national referral mechanism is in place to ensure that individuals can be properly identified and supported, as mentioned by the noble Lord, Lord Paddick. The NRM is a framework for identifying and referring potential victims of modern slavery and ensuring they receive the appropriate support. The online process allows first responders to submit an NRM referral through a single online form, regardless of their location in the UK or whether the victim is an adult or a child. This provides a structured and compassionate route for potential victims of modern slavery to receive help without fear of immediate immigration consequences.
I am concerned that creating a legislative blocker to information sharing could have unintended consequences and make it harder for the vulnerable individuals concerned to get the help that they need and deserve. My department will continue to work with the Home Office to ensure that we strike the right balance between protecting vulnerable workers and maintaining the integrity of our immigration system. I therefore ask the noble Baroness, Lady Hamwee, to withdraw Amendment 273PA.
Baroness Hamwee (LD)
My Lords, I am grateful to the noble Baroness, Lady O’Grady. I was not surprised that she was able to produce that example; there are lots of examples.
I say to the noble Baroness, Lady Coffey, that there is data protection for a good reason. I cannot say that the current situation “breaches” it, as it is not illegal, but it does not observe that data protection.
The noble Lord, Lord Hunt, is of course right about human rights abuse. He used the important term “safeguarding”. Obviously, I am disappointed with the response from the Minister—I will have a good read of it. I think we might be returning to this issue in the next Home Office Bill that is coming to us—the noble Lord, Lord Hanson, has not reacted.
With regard to my noble friend Lord Paddick’s amendments, I still do not follow quite how the assurances can be implemented. I ask the Minister—though perhaps I shall go back to Dame Sara Thornton and the Rights Lab to be sure that I have not got it wrong—to write to my noble friend and me explaining just how those assurances work their way through in the legislation, because to have just the assurances without a statutory underpinning seems not to be enough.
Having said that, I beg leave to withdraw the amendment.
Member's explanatory statement
The effect of this amendment is that enforcement costs recovered by the Secretary of State under clause 140 will be payable into the Consolidated Fund.
Child Sexual Exploitation: Casey Report
(1 day, 4 hours ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
Lord Davies of Gower (Con)
My Lords, as my noble friend Lady Stedman-Scott said last week in response to the Government’s previous U-turn on winter fuel payments, we are pleased that the Government have finally listened to the wishes of the British public and agreed to hold a full national inquiry into grooming gangs.
The abhorrence of the crimes committed by these gangs is beyond belief. It is vividly apparent that the victims have repeatedly been let down. The audit by the noble Baroness, Lady Casey, lays bare the scale of the institutional failure across the country. I pay tribute to all those survivors who were systematically ignored by authorities for fear of being branded racist. Those who have come forward to whistleblow and share their harrowing stories have demonstrated unbelievable bravery, such as the survivor Fiona Goddard, who was exploited and abused by an Asian grooming gang at the age of 14 when living in care in Bradford. She was led to believe that her abusers cared for her, before they plied her with drugs and continuously raped her. I cannot imagine the horrors experienced by the many thousands of children groomed by these gangs. I am particularly concerned—I raised the matter with the Minister at Questions earlier today—about what steps the Government will take to ensure that the victims are at the centre of their response.
We must be under no illusions. This is not a historic sexual abuse story; these vile crimes are still being perpetrated. Young girls are still, to this very day, being groomed and sexually exploited by gangs, as the report by the noble Baroness, Lady Casey, makes abundantly clear.
The fact that these gangs continue to operate, with young girls still not being believed and their voices still not being heard, makes it even more difficult to understand why the Government have taken so long to listen to what my right honourable friend the leader of the Opposition has been saying since January. The Conservatives gave the Prime Minister three opportunities in the other place to back a full national inquiry, and Labour Members voted against these measures on all three occasions.
Not only that, but Government Ministers repeatedly opposed such an inquiry. The Secretary of State for Education accused those who called for an inquiry “bandwagon jumpers” who “don’t care about children”. The Leader of the House of Commons claimed that the issue of grooming gangs was a “dog whistle”. The Minister for Safeguarding rejected an appeal by Oldham Council for a national inquiry last October, and in April this year announced just five local inquiries. Indeed, the Minister here said on 22 April, in response to a question that I posed to him, that:
“We could certainly have a national inquiry, as the noble Lord has mentioned, but this Government’s judgment is that we know what the problem is”.—[Official Report, 22/4/25; col. 624.]
Even the Prime Minister himself said that anyone calling for an inquiry was jumping on a far-right bandwagon and repeatedly opposed holding such a national inquiry. He has, of course, now changed his mind once again.
Can the Minister explain why the Government opposed a national inquiry for so long, and why they have now done such a complete about-face on this issue? Surely now is the time for the Government to apologise for repeatedly making false claims about those who have been calling for this national inquiry since January.
I place on record my thanks to the noble Baroness, Lady Casey, for her no-nonsense, hard-hitting and thorough audit. Her candour and tenacity are exemplary. She has not shied away from highlighting the fact that these child rape gangs were largely comprised of Pakistani men, a point that all too many have previously been scared to make. She also highlights faults in the available datasets. As the report states, the complex organised child abuse dataset includes all child sexual abuse and exploitation that is committed by two or more perpetrators, and this includes familial abuse, child-on-child abuse and institutional abuse. It is therefore difficult to ascertain the true scale of grooming gangs.
There are 12 recommendations presented in the audit. I look forward to hearing the detail of how and when the Government will take them forward.
Baroness Brinton (LD)
My Lords, I declare my interest as a vice-president of the Local Government Association. I pay tribute to the victims and the whistleblowers from the police and other authorities for their bravery and absolute consistency in continuing to fight for their cause.
I am sorry that the Conservative spokesman has taken the line that he did. I am afraid that from these Benches we have a different standpoint. It was really disappointing on Monday to hear the leader of the Opposition attack the current Government when this applies to Governments of all parties over recent decades, including my own, but especially the Conservative Government who commissioned Professor Jay’s IICSA report, published a response but then did nothing. Surely it is better for all of us to come to this in humility and admit that, time after time, politicians failed to listen. This is not just about parliamentarians; it is about elected mayors, councillors, assemblies and combined authorities too. We did not just fail to listen but we all failed to act.
The noble Baroness, Lady Casey, said that now is the time to right wrongs, and that is correct. The victims and the whistleblowers, even when reported in the news and documentaries, have had to listen time and again to promises of action but nothing changing. It is refreshing that the Statement says that the Government will act on all the noble Baroness’s recommendations. But we know that this promise has been made before in response to complex, long-standing and shameful incidents over the years, and I am sure that some still continue. As Professor Jay said in her IICSA report, we lie to ourselves if we think that child sexual abuse and exploitation are not happening now.
We are seeing similar issues with the slowness of the infected blood compensation scheme, the Post Office Horizon compensation scheme and the Windrush scheme. Will your Lordships’ House hear that the inquiry will be set up swiftly and will be fully funded, including support for victims, as has been promised for the other schemes I have just mentioned, but which has not always appeared? Will the inquiry also draw evidence from the previous reports and reviews, so that the evidence it takes will build on what is already known? As I mentioned at Oral Questions, there are two reasons for this. First, it is much less traumatic for the victims and whistleblowers, many of whom have had to give the same evidence many times, each time revictimising them. Secondly, that should ensure a shorter evidence period of the inquiry; as the Statement says, there is an urgent need for action and accountability, whether for the perpetrators or the organisations that did not protect these children when they were raped and groomed, including councils, the police, the judiciary, social workers and more.
Will victims, including whistleblowers, be supported properly, right from the start, and not be revictimised? How long will it take to review the convictions that some of these young people, mainly girls, received, because they were perceived as complicit and able to give consent when they were plainly children? What steps will the Government take, in the light of the noble Baroness’s audit review, to ask councils, the police, the judiciary, social workers and others to review their working practices now? While the inquiry’s future report and recommendations are important, it is evident that there is enough for those organisations to reflect and change their practice now, in light of this audit review.
The Government have promised a form of mandatory reporting, as well as a Bill on the duty of candour, or Hillsborough law. Can the Minister say when we will see them in Parliament? Both are urgent to prevent this happening again in the future.
The recommendations on appropriate data collection and data sharing are also vital and, I am afraid, long overdue. The use of the Smith algorithm in West Yorkshire sounds helpful in identifying people possibly in scope as victims and survivors. Will it be rolled out elsewhere, given West Yorkshire’s positive experience?
The noble Baroness’s report proposes research into taxi drivers for group-based child sexual exploitation, including online. Unlike the monks, teachers and children’s workers involved in other group child sexual exploitation, taxi drivers are below the regulatory radar, other than the licence for their taxis. So will the Government ensure that statutory standards for taxi drivers will be brought in, to end “out of area” taxis plying their trade in places many miles away, where they are not on the radar of the local authority in which they are trying to work?
Will the Government publish a plan for communication to the wider public? This is a highly sensitive topic for young people, families and communities. In particular, will the Government work with faith groups and community groups? The noble Baroness, Lady Hazarika, rightly pointed out during Oral Questions that most Muslims are absolutely horrified by the behaviour of small groups of truly evil men, but it will be important for these communities to understand what they need to do to prevent it from ever happening again.
The Minister of State, Home Office (Lord Hanson of Flint) (Lab)
I am grateful to both Front-Bench speakers for their contributions and questions. I will try, as ever, to address those issues.
Let me go straight to the heart of the challenge from the noble Lord, Lord Davies, to the Government regarding accepting the inquiry recommendations. When we came to office last year, we looked at the IICSA recommendations, which had been ignored for two years by the previous Government. We have accepted and have begun to implement the vast majority of the IICSA recommendations. Some are still being examined, but the broad direction of travel is to accept. In January this year, we also commissioned the noble Baroness, Lady Casey, to whom I pay full tribute, to produce a report on emerging trends and how the four or five major potential inquiries in towns that we are familiar with were progressing, and whether we needed some national co-ordination on those issues. She entered that with an open mind and has come back and made 12 recommendations, including the Government producing national frameworking standards as part of an inquiry to support the local inquiries that were commissioned and taking place.
I regard that not as a U-turn but as a positive contribution from an independent colleague of ours, the noble Baroness, Lady Casey. The 12 recommendations have come forward in a way that we can make further progress to tackle this horrendous issue which, as the noble Lord mentioned extremely well, impacts on victims across the country—there have been 500,000 victims of child abuse and 100,000 victims of sexual exploitation. It is beholden on this House to look at those recommendations seriously, and we have accepted the need for that national inquiry.
Both the noble Baroness, Lady Brinton, and the noble Lord, Lord Davies, mentioned how the inquiry will be established. I said earlier at Oral Questions that we will be bringing that forward at an early opportunity; we have to appoint a chair and set terms of reference. We brought the report straight to this House and the House of Commons this week; we will do that in relatively short order and I will report back to this House when that is complete.
The noble Lord, Lord Davies, also mentioned victims. We want to ensure that victims are central to this and that their testimony and experience are brought to the inquiry. We will be giving a mandate to the chair, whoever he or she may be, to bring forward that support for victims in due course—a point mentioned also by the noble Baroness, Lady Brinton.
Since the election, more than 800 grooming gang cases originally dropped by the police have been reopened, and the child sexual exploitation police task force has increased arrests by more than 50% in the past year. So there is action on the ground as well as progress on the recommendations.
It may help Liberal Democrat Members and His Majesty’s Opposition if I run quickly through the 12 recommendations. One is the inquiry, which we have accepted. On mandatory charges of rape, we will begin an immediate consultation with the CPS and the police to develop legislative change on that recommendation. On the national police operation, we will actively increase policing and statutory partners to design an operation that will take criminals to task in a much more strategic and energetic way. The national inquiry is a recommendation we have accepted. The noble Baroness mentioned reviewing the criminal convictions of victims; we will be legislating in the police and crime Bill, which has just completed its passage in the House of Commons, to put in place a scheme to disregard those convictions. When legislation has been passed, that will occur. The mandatory collection of ethnicity data is an extremely important point that was raised in Oral Questions. We will undertake that and will commission it to begin immediately for police forces, and we will be issuing guidance.
Mandatory information sharing between statutory agencies is a provision in the Children’s Wellbeing and Schools Bill, currently before Parliament. We are making it unequivocally clear that information must be shared. The recommendation from the noble Baroness on unique reference numbers for children is also in the Children’s Wellbeing and Schools Bill before the House currently. The recommendation from the noble Baroness, Lady Casey, on research into drivers of group-based child sexual exploitation will begin immediately in the Home Office. The noble Baroness, Lady Brinton, mentioned taxi licensing, and the Department for Transport is committed to working as quickly as possible to consider the options the noble Baroness brought forward. So the Government will be taking forward all 12 recommendations, and I hope that will be welcomed across the House.
I should also just say, because I am slightly confused— I hope the House will bear with me—that the noble Lord, Lord Davies of Gower, has been pressing this Government to implement the IICSA recommendations and has been asking questions about the IICSA recommendations on child sexual grooming and on a range of other matters, all of which, I have informed this House, even as recently as Questions today, will be in the Crime and Policing Bill before these Houses of Parliament.
The noble Lord does not have the opportunity to address this now, but maybe he can think about this, because not one hour ago His Majesty’s Official Opposition in the House of Commons voted against that Bill at Third Reading and, in doing so, voted against the measures to implement the IICSA report. His Opposition Members of Parliament walked through a Lobby voting against those measures not one hour ago, and not just those measures but measures on retail crime, on prevention of terrorism and on a whole range of things in the Crime and Policing Bill, which will come to this House of Lords very shortly for Second Reading. He has an opportunity, at Second Reading in a few weeks’ time, to think through his position on this and reflect on whether his party, his leader, his official shadow Home Secretary can continue to support that opposition to the Crime and Policing Bill measures, because those measures are the very things that he stood up, along with the noble Baroness, Lady Brinton, to support this Government in doing. I will just let him reflect on that. And it was not just his party—the Reform Party voted against the Third Reading of the Crime and Policing Bill.
I am not sure what this is coming to, but these measures are important, and I mention them today because the grooming gang recommendations which we have accepted here today will be implemented in the Crime and Policing Bill. If the noble Lord continues his position of voting against that Bill at Third Reading, they risk not becoming law. Also, he has not supported the measures that I thought he was supporting, on child sexual exploitation, that we put in the Crime and Policing Bill to meet the IICSA requirements on things such as mandatory reporting. I just put that before the House because it is hot off the press and I think it is worthy of reflection.
However, I give the noble Lord and the noble Baroness, Lady Brinton, a commitment that the 12 recommendations before the Government from the noble Baroness, Lady Casey, will be implemented. We will, as we have done, implement the vast majority of the IICSA recommendations and will be looking at the ones that are still outstanding to see how we can implement them. We will continue to press down, through prosecution and through police activity, on grooming gangs to ensure that we tackle those. I commend the Statement to the House, and I am happy to answer further questions on it in detail.
Captain of the King’s Bodyguard of the Yeomen of the Guard and Deputy Chief Whip (Baroness Wheeler) (Lab)
We will hear from the Labour Party, followed by the Cross-Benchers.
Baroness Chakrabarti (Lab)
My Lords, I am sure that we are all incredibly grateful to the noble Baroness, Lady Casey, for this work, as in her previous independent inquiries on behalf of Governments of all stripes. There is, no doubt, a problem when walking on eggshells prevents the investigation and prosecution of particular criminals because of fears of racism. That is clear from this report, but does my noble friend the Minister agree that we have seen these group scandals in relation to child abuse in the Catholic Church and the Church of England—if the right reverend Prelate will forgive me, patriarchal communities where vulnerable people are not believed? With that in mind, and also referring to the report of the noble Baroness, Lady Casey, is the age of criminal responsibility, at just 10 years old in England and Wales, too young when children and girls who are exploited in this way, drugged and put into prostitution, are then treated as criminals and not as victims?
Lord Hanson of Flint (Lab)
I am grateful to my noble friend for echoing the praise and support for the noble Baroness, Lady Casey, and the work she has done. She has set down a further set of developments that we can look at and action to help reduce victims and reduce this level of crime. My noble friend tempts me into addressing the age of criminal responsibility. What I will say is that that issue is one that we will reflect on in government. I cannot give her chapter and verse on that today, but what I can say—I said it a moment ago in relation to recommendation 3, which is on reviewing convictions of victims—is that we will legislate in the Crime and Policing Bill to introduce a disregard scheme for the convictions of individuals who were found guilty of prostitution offences as children. The criminal law has rightly evolved to make it clear that children cannot be prostitutes, and it is long overdue that individuals convicted of child prostitution offences have their convictions disregarded and their criminal records expunged. We will do that in the Crime and Policing Bill, and I look forward to His Majesty’s Official Opposition supporting us on that Bill, not voting against it as they just have done in the House of Commons.
Baroness Watkins of Tavistock (CB)
My Lords, will the Minister say whether the review involving children will also consider young boys? As patron of a drug treatment centre and chair of a homeless housing association, I am convinced that there are young boys who are led into prostitution in a similar way.
Lord Hanson of Flint (Lab)
The potential amendments to the Crime and Policing Bill will look at individuals where criminal convictions have occurred, be they male or female, at an age when they were deemed to be children. We will be tabling amendments to that Bill to ensure that those convictions are expunged, those records are removed, and that the individuals will not be subject to that in future. I look forward to her support on that.
Baroness Verma (Con)
My Lords, it is really good to hear what the Minister has said, but victims will need a lot of help to readjust into normal life. We cannot just do an inquiry and leave them to fend for themselves. Will the Minister please find support for all those who have come forward, and for all the hundreds that we are, I am afraid, going to find? Will he assure us that a national inquiry means a national inquiry, that it will not be just five or six local authorities that are going to feed in, and that all authorities, all police agencies and all social services will feed in on what they are doing, in whichever part of the country they are, to be able to respond to questions about victims?
Lord Hanson of Flint (Lab)
I am grateful for the noble Baroness’s support. I was just checking what my right honourable friend the Home Secretary said on the Statement in the House of Commons:
“On support for victims, my right honourable friend the Health Secretary—
that is, the Health Secretary for England—
“will fund additional training for mental health staff in schools on identifying and supporting children and young people who have experienced trauma, exploitation and abuse”.
On broader victim support, the Home Secretary drew attention to additional funding for mental health support in schools and has also ensured that the independent commission will gather and assess victim support as part of its remit once the chair is established and the terms of reference are determined.
The point that the noble Baroness made about the UK nature of this inquiry is extremely important. I have responsibility for England and Wales, and the Department of Health has responsibility for England, but, obviously, some matters are devolved: policing in Scotland and in Northern Ireland; and health in Wales, Scotland and in Northern Ireland. I want to ensure—and we have given a mandate to the potential chair in due course—that it deals with all the devolved Administrations, consults them and looks at lessons which can be applied, with the consent of the devolved Administrations, on a UK-wide basis.
Lord Mohammed of Tinsley (LD)
My Lords, I fully support the comments of my noble friend Lady Brinton, particularly around the lack of action previously seen around the Alexis Jay report, but I will press the Minister on one of the points that my noble friend highlighted, around bringing in a Hillsborough-style law that would put a duty of candour on local authorities. The Minister did not respond to that, and I think it is really important, because if we are to bring in that law, if we are to have this inquiry and it is to have results, then we need that duty of candour.
In response to what I heard from the noble Baroness, I will also talk about charities in places such as my home city of Sheffield. The organisation I worked for for 30 years, Sheffield Futures, was the lead organisation for CSE in that city, and I just make one plea. There are lots of accusations about certain communities. If we are to get justice, any police officer will tell you that they have to work within those communities. Alienating communities will not deliver justice, because I tell you now, from 30 years’ experience in youth service in South Yorkshire, there will be victims of South Asian origin as well, but because of the issue around honour—and colleagues in here will know what that means—some of those victims have remained silent. It is upon us all to make sure that those victims also have a voice.
Lord Hanson of Flint (Lab)
My Lords, I am grateful to the noble Lord for raising this issue. I extend my apologies to the noble Baroness, Lady Brinton; I am trying to cover a range of issues in a very short time.
On the question of the duty of candour and the Hillsborough law, the noble Lord and the noble Baroness will know that the UK Government had a manifesto commitment to introduce that legislation. As yet, it has not been introduced, but I know that work is being done behind the scenes to do that. As a supporter of the Liverpool Football Club, and somebody who, when a Member of Parliament, had constituents who were victims of the Hillsborough incident, I know that that will be very welcome legislation. It is still being worked on in government terms, and will be published in due course.
The noble Lord mentioned the support of voluntary organisations. That is extremely important. I would hope that the prospective chair, whoever he or she will be, will reach out and look at the role of the voluntary sector as well.
The noble Lord is absolutely right to say that victims know no ethnicity. There are perpetrators from every walk of life and every religious and ethnic group, including white British, and there are victims from every group. We have a particular focus on organised gangs, and that has been prevalent in certain places. The noble Baroness, Lady Casey, has made recommendations about ethnic data collection, which we will look at and which will help inform in future what is happening for both victim and perpetrator, but the noble Lord is absolutely right to raise this issue today.
Baroness Hazarika (Lab)
My Lords, it is so important that both sides do not play politics. The reality is that none of our parties has covered themselves with glory, including my own—I absolutely put my hands up to that. It was not that long ago when a Conservative prospective Prime Minister said that money being spent on historic child abuse inquiries was money “spaffed up the wall”. I think we all need to remember that. These crimes are not historic and I would like the Minister to update us on what is being done to protect victims today. We know that these crimes are still happening and that these rape gangs are still operating in our towns and cities across the country.
Lord Hanson of Flint (Lab)
I am grateful to my noble friend. I want to have consensus in this House on the measures that we take forward as a whole, which is why I reflect on the fact that measures in the Crime and Policing Bill were voted against in the House of Commons within the past hour and a half.
My noble friend is absolutely right to focus on the issue of what is being done now. We have focused on putting additional support into policing and tracing convictions. We have investigated a lot of cases—some 800 cases that were closed cases previously—and increased the conviction rate by 50%. That is an important measure. With the acceptance of the 12 measures from the report of the noble Baroness, Lady Casey, and the inclusion of the IICSA recommendations in legislation, along with action and the further examination of a couple of those, this Government are taking the issue very seriously.
The Lord Bishop of Manchester
My Lords, I declare my interest as co-chair of the national police ethics committee. Despite the fact that the very first recommendation of the noble Baroness, Lady Casey, was that we must see children as children, it has really taken until tonight in this House for much of the conversation to move into that area. This was a point made by Sir Stephen Watson, the chief constable of Greater Manchester, at an event I attended earlier today. He has talked about how much of the failure to prosecute was down to police forces treating abused children not as victims but as somehow culpable in their own abuse. I thank the Minister for already confirming that we will have a victim-centred approach to this inquiry. Can he assure us that the inquiry will explore Sir Stephen’s point, including through the data it collects, so that we can determine to what extent it was a poor response by police forces to the victims of these serious multiple rapes that lies behind the failure to prosecute and convict? Does he agree with me that this is far better than just lazily assuming, as the media seem to be doing, that every single failure comes down to questions of the ethnicity of perpetrators? Finally, on a happier note, will he join me in congratulating Sir Stephen on his recently announced knighthood, a worthy acknowledgement for a man who has turned round how my city and its surrounds are policed?
Lord Hanson of Flint (Lab)
I join the right reverend Prelate in congratulating Sir Stephen on his knighthood as chief constable of Greater Manchester. It is a great honour for an individual to receive that and a recognition of the important work he has done in turning round Greater Manchester Police, with the support of the mayor.
The right reverend Prelate mentioned the issue of convictions, which I hope I have covered. Where individuals have had convictions, we will legislate to have those overturned.
It is important that we look at the whole issue of how we got here. The focus is on gangs of a particular ethnicity, and that has been a driving force for the work that is being done in local, and now the national, inquiry. But I think we need to look at the police response as a whole to child sexual abuse and child sexual exploitation, and at how we ensure that young children who are victims find a place where they can have trust in the system to bring forward their experiences, and be believed in bringing forward those experiences, and for the police, the Crown Prosecution Service and the courts to provide a mechanism for them to secure the conviction of those evil predators who have abused them in their childhood.
Lord Bailey of Paddington (Con)
My Lords, one of the greatest failings in this horrific case of exploitation was that many, particularly police officers, were afraid to come forward. They felt that they would be accused of being racist and that would be the end of their careers. What support is the Minister going to give in the context of this inquiry to new police officers, new council officials and new people in authority who may feel the need to come forward as part of this inquiry? What cover will be given so that they can come forward without fear of losing their career? It should be borne in mind that it was a Labour Prime Minister who said that people who wanted these inquiries were somehow far right. That set an environment of fear. How are we going to wind that back and give people the space to do their jobs properly?
Lord Hanson of Flint (Lab)
If I may paraphrase the Prime Minister, I think he was referring to the fact that people on the far right were using this to exploit fears and prejudices and to stir up fear and hatred.
What I am trying to do—I am sure the noble Lord will share this aim—is find concrete solutions by accepting the recommendations here and accepting into legislation, as far as we can, the recommendations of the IICSA report, and by taking positive action to encourage the police to go after particular groups that we know now can have their cases reopened, and so improve the prosecution rate accordingly. It is absolutely right that the core duty of police officers should be to follow the evidence and the truth and not worry about the ethnic background of the individual who may or may not be the perpetrator—they should bring the perpetrator to justice, whatever background they are from. I will ensure that guidance is given by our chief constables to ensure that the police understand that duty, as I believe they now do.
Baroness Fox of Buckley (Non-Afl)
My Lords, I urge more humility and a little less complacent gaslighting. No parties have clean hands. Too many people, including the victims, were smeared as racists for even raising the issue—and that includes in this House, as an aside. Will the 2020 Home Office paper on group-based child sexual exploitation be immediately withdrawn now that the noble Baroness, Lady Casey, has exposed its much-cited false claim that group-based CSE offenders are most commonly white, which the audit says does not seem evidenced by research or data—in other words, it is misinformation? It is a Whitehall policy wonk version of the literal Tippexing out of the word “Pakistani”. Can the Minister assure us that that report will now be taken out of public circulation?
Lord Hanson of Flint (Lab)
I am grateful to the noble Baroness for her question. I will say two things to her. The 2020 report, as I recall, was not produced this Government or this Home Office. I will look at that report and the action, but the noble Baroness, Lady Casey, herself said only yesterday at the Home Affairs Committee, “If you look at the data on child sexual exploitation, suspects and offenders, it is disproportionately Asian heritage. If you look at the data for child abuse, it is not disproportionate, it is white men”. We need to accept the discussions and focus we have had to date and look at positive solutions for dealing with this.
When the noble Baroness says we need less complacency and more humility, I say that I have stood at this Dispatch Box on behalf of this Government and accepted all 12 recommendations from the noble Baroness, Lady Casey. I have accepted the bulk of recommendations from the IICSA report from Alexis Jay, and I have put in place additional police support to take action on historic cases and bring 50% more offenders to justice. I do not think that is complacent. I ask the noble Baroness to try to work with us constructively; let us look at the solutions. I will accept constructive criticism, but I am not going to be called complacent when we have accepted every recommendation, done the things we have done on IICSA and brought more people to justice.
Lord Cryer (Lab)
My Lord, the first person who raised the issue of the rape gangs—in other words, the first whistleblower—happened to be my mum, Ann Cryer MP, who started raising this in 2003. She was then smeared and attacked—particularly by Labour figures, I have to say—for being a racist. I am not talking about Ministers in the then Government, many of whom supported her, and my noble friend Lord Blunkett, then Home Secretary, went out of his way to make sure that prosecutions happened—which they did. I am talking about councillors, councils and other institutions that went on the attack, and lied and smeared about the rape gangs. It is possible that some of them genuinely thought that they could not bring themselves to believe it, but I do not believe that about all of them. I think some of them were complicit. Some of them knew it was going on and they decided to cover up. If there is evidence to that fact in those cases, they should be brought before the courts and prosecuted.
Lord Hanson of Flint (Lab)
I pay tribute to Ann Cryer, the mother of the noble Lord, Lord Cryer. I served in Parliament with Ann and I know she raised these matters and faced extreme difficulties locally as a result, and took a very brave stand at the time. Again, I say to colleagues across the House, let us look at how we deal with this issue. My party has not been in Government for 14 years, but we have been in control of some of the councils. My party was not in control of government when a lot of these issues happened, but I still have a responsibility to make sure we deal with these in an effective way. I want to make sure that we accept these recommendations and see them through, and this House will monitor me to make sure we do it.
Baroness Bennett of Manor Castle (GP)
My Lords, in responding the right reverend Prelate, the Minister said victims need to find a place they can trust. Among the promises of action in the Statement is a promise of further action to support child victims. For many of these children and young people to be able to speak out, they will need the support of known and trusted adults: people like youth workers, teachers or medical professionals. Are the Government going to ensure that there are enough resources in affected communities so that those kinds of trusted adults are available to support victims?
Lord Hanson of Flint (Lab)
I hope I can answer the noble Baroness in a positive way. I have said already that we will look at how we support victims to interact with the inquiry and the potential chair. I want to make sure that the chair, whoever he or she is, has an opportunity to look at how they frame the issue, rather than have central government directions on it. The Prime Minister has been clear that the inquiry will be fully funded, and we are looking forward to how we can develop that. The involvement of victims is central and we need support for them, because I do not want to retraumatise people who are talking about their cases and what happened to them in the past. It is important that we get to the truth of what has happened, where there have been institutional failings and how we put in place policy options to rectify that, reduce future victims and ensure that we bring perpetrators to effective justice.
Employment Rights Bill
(1 day, 4 hours ago)
Lords ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
Baroness Chakrabarti
“Secretary of State: equal pay enforcement function(1) Payroll and other company information required by HMRC for the purposes of taxation may be used by the Secretary of State for the purpose of monitoring compliance with the equal pay duty under the Equality Act 2010. (2) The Secretary of State may conduct more detailed investigations into equal pay compliance on the basis of such monitoring of payroll and other information and an employer must take all reasonable steps to cooperate.(3) In the event that the Secretary of State is of the view that a particular employer is in breach of its duties to provide equal pay for like, equivalent or work of equal value, they may—(a) issue a private notice to the employer, advising of that view and recommending rectifying measures in relation to past discriminatory pay or future pay practices and policy,(b) issue a public notice with the type of advice set out in paragraph (a) above, or(c) seek such relief as would be open to individual employees in the appropriate court or tribunal, on their behalf.(4) A court or tribunal finding in favour of such an application may, in addition to awarding appropriate compensation to victims of discriminatory pay practice, impose a civil penalty, not exceeding 10% of the employer’s annual turnover, as it finds appropriate in all the circumstances.(5) The Secretary of State may employ algorithmic technology including artificial intelligence software in the monitoring of equal pay compliance but must provide any court or tribunal in which relief is sought, with details of any relevant software and evidence of the effective functioning of the computer system employed in the monitoring and investigation of the employer in question.”Member’s explanatory statement
This amendment seeks to probe why equal pay laws have been left to individual employees to enforce by personal litigation, and how an element of state enforcement might assist such employees in achieving their rights to equal pay as provided for under the Employment Act 2010.
Baroness Chakrabarti (Lab)
My Lords, I hope that the principle that sits behind my probing amendment, like the principle of equal pay for equal or equivalent work, is uncontroversial and therefore that I need not detain the Committee for too long—I am a sort of guest of this Committee, when some noble Lords have been really putting the hard yards in for so long. Over the years, I have been incredibly grateful to discuss my concern about equal pay legislation with a number of Members in this Committee and noble Lords in general. I have been particularly grateful to my noble friend Lady Jones of Whitchurch and her officials, who have been very generous with their time and responded to me by agreeing to consider my proposal as part of their preparations for a more specific Bill—not too long in the future—that will cover these issues.
There has been a broad consensus in British politics for some years that there should not be discrimination in pay. We have had the Equal Pay Act since 1970 and successor legislation; I do not believe it has been controversial in party-political terms. That will be 75 years of equal pay legislation in December, and still nowhere near equal pay. My own view is that, right from the beginning, there was a fundamental design fault in the legislation—which was so brilliantly “Made in Dagenham”—because the enforcement mechanism was wanting.
I have said before there is no other area of regulation in this country that we take seriously that we would leave to an individual citizen or consumer to enforce for themselves. Imagine school standards, food standards, nuclear safety standards, health and safety standards, environmental standards and so on if the only enforcement mechanism in the legislation was for the individual citizen to investigate the regulatory breach and then, with or without the support of a trade union or an NGO, to sue for themselves. That has been the position for individual workers under equal pay legislation from the very start, and that is problematic.
My amendment creates the possibility of the state acting as a backstop to stand behind an individual worker, so that she does not have to go through those ridiculous hoops—which will take years of expensive investigation and legislation—to find out what her colleagues are getting paid, not just for the same job but for equivalent work, with all the complications around that, and then, with or without trade union support, sue her employer. Who wants to do that? It is just not a realistic regulatory enforcement mechanism.
In my probing amendment, I suggest that some agency of the state ought to sit behind as a backstop in that investigation and enforcement process. If that were the case, we could help to avoid unnecessary and expensive litigation and the bankruptcy of some local authorities. A state regulator could, for example, investigate a particular employer that had become a concern with a range of regulatory options, including private notices and private conversations, before public conversations and potential enforcement action. Entrenched inequality in pay practice could be nipped in the bud before years transpire and the debts accumulate. I think, having listened to some previous debates on this Bill, that this principle ought to be welcomed on all sides of the Chamber, because it could be good for the business as well as for workers.
Lord Jackson of Peterborough (Con)
My Lords, I will speak very briefly on this amendment. It is quite an ingenious and intelligent amendment that is quite superficially attractive. I know the Minister will give it proper and due consideration.
My only problem is that it draws an analogy that does not really stand up to close scrutiny. I defer to the noble Baroness’ greater legal expertise, but when you are employed, there is a personal contract between the employee and the employer that you have freely entered into. It may be that, in the course of that contract, your pay falls behind and there are societal and economic reasons why you are paid different amounts of money. We could be here all week discussing that.
However, it is not the same as the relationship you have with a nuclear power station, where you have the expectation that you will be kept safe from accidents and drastic events; with your local water authority and the expectation that you will not be flooded; or when you go on an aeroplane that, God forbid, that aeroplane will not crash. You do not have that direct contractual relationship with those bodies. In other words, you essentially defer that responsibility legally to other bodies to intercede on your behalf. Therefore, this amendment, in a circuitous way, undermines the very concept of a one-on-one contractual relationship, so I do not think it is analogous.
Having said that, I would not particularly oppose this amendment. It is ingenious and interesting but, with all due respect, I do not think the noble Baroness draws an accurate analogy between the two.
Baroness Chakrabarti (Lab)
I am grateful to the noble Lord for taking the argument so seriously. Of course, I disagree with him. When you go to eat in a restaurant, go to school or buy a can of baked beans, you may well have a private, contractual relationship with the supplier of that good or service. None the less, the state has decided that it needs to intervene because these power relationships are not all equal and there is a public good in the baked beans being safe to eat, the school delivering a good service, et cetera.
So, from the moment the UK Government and the UK people took the democratic decision that there should be laws to protect school standards, food safety, health and safety and non-discrimination in pay—supported by people from all parties, including in your Lordships’ House—it is not just a matter of private contract between two parties anymore; it is actually a matter of public policy and a wider rule of law point. The non-discrimination point has been non-partisan in this country for some years.
Most equality legislation has, perhaps, been promoted by Labour Governments, but the disability rights Act is the obvious exception. There has been a bipartisan consensus that we should not discriminate against people because of their sex, including in pay. We just have not been delivering on pay as well as we have been delivering in other areas of women’s lives. Therefore, the analogy with school standards, health and safety standards and food standards works. If we want to achieve equal pay, we have to take it seriously in enforcement.
Lord Jackson of Peterborough (Con)
Just to come back to the noble Baroness, would she therefore extend the provisions of her amendment to all protected characteristics under the Equality Act 2010?
Lord Sharpe of Epsom (Con)
My Lords, that was a most interesting exchange, and I thank the noble Baroness, Lady Chakrabarti, and my noble friend Lord Jackson for it. As I have said many times, I am not a lawyer, but as a broader observation, there seems to be a slight philosophical discussion developing this evening between intervention and initiation when it comes to various state interventions in certain areas of law.
I have no doubt at all that the intention behind the noble Baroness’s amendment is to strengthen the enforcement of equal pay laws. As she rightly says, we all support that objective, but we feel that this particular proposal is somewhat flawed, not least because we just do not think it will work. At its core, the amendment risks conflating pay disparity with unlawful discrimination. It assumes that if a pay gap exists, there must therefore be wrongdoing. As the noble Baroness, Lady Chakrabarti, acknowledged, it is not that simple, because pay disparities can and often do arise for entirely legitimate reasons, such as differences in experience or qualifications, performance geography or even negotiated terms, to my noble friend Lord Jackson’s point. To suggest that a mere statistical difference is indicative of discrimination is to abandon the nuanced legal framework carefully set out in the Equality Act 2010. While paying a great deal of respect to the arguments—and there is considerable merit in this—we cannot support this amendment.
The Minister of State, Office for Equality and Opportunity (Baroness Smith of Malvern) (Lab)
My Lords, like my noble friend Lady Chakrabarti, I am also an occasional visitor to this Committee, but I am very pleased to be here this evening to address her Amendment 275. I thank her for recognising the engagement there has been with the Government and others on this up to this point.
Certainly, the Government want to make very clear that we share the broad aims behind this amendment. Over 50 years after the Equal Pay Act 1970 and 15 years after the Equality Act 2010, it is clear that equal pay has not yet been achieved. That is why the Government have committed to strengthen the equal pay regime and end pay discrimination. I share the concerns of my noble friend in identifying the challenge of enforcement in this case. There is more we can do to ensure that the onus does not fall only on women to find out whether they are receiving the same pay as their male colleagues for equal work and to take enforcement action against employers in the case of a breach.
It is possible to envisage, in relation to the points made by the noble Lord, Lord Jackson, a system in which you have both the contractual arrangement and the ability to take individual action as is the case now and an enforcement body that supports people doing that in general terms and identifies thematic or consistent ways in which equal pay is being breached. That is why the Government are committed to establishing an equal pay regulatory and enforcement unit with the involvement of trade unions. As part of this, we will carefully consider how we can improve the enforcement of the equal pay scheme.
On 7 April we launched a call for evidence on this issue and wider equality law to ensure that any steps we take will lead to a meaningful strengthening of protections against pay discrimination—an objective that I am sure my noble friend will share. It is important that the Government are able to develop these changes in partnership with business, trade unions and civil society to ensure that the law works for everybody. For that reason, I hope my noble friend will recognise that this will be a more appropriate process through which to address these issues. As she suggests, we will give these areas very close consideration in advance of the equality, race and disability Bill.
In relation to some of the specific points my noble friend raises about the way this might operate, we certainly recognise the benefits that can arise from government departments, including HMRC, working together. HMRC already has a number of joint working and data-sharing arrangements with departments and agencies. The Government are therefore not closed in principle to establishing new data-sharing arrangements with regulatory authorities where this can support their regulatory functions.
My noble friend made a very interesting point about the use of AI. It would not be sufficient simply to compare the pay of different people working within a workplace unless you could also have some analysis of how that applied to the nature of the work and whether that was work of equal value. It may well be that advances in technology, including AI, would be a way in which we could support that monitoring.
Policy is at a very formative stage. My officials will explore a wide range of options to improve the enforcement of equal pay rights. While taking great care to ensure that safeguards are put in place in relation to personal data, particularly where that relates to discrimination and protected characteristics, I suspect the sort of description that she gave of the contribution of AI is very much part of what, across government, we are wanting to see in terms of its use in future.
We are sympathetic to the ultimate objectives of my noble friend’s amendment. I hope she recognises that and the progress that we intend to make on that pledge to deliver stronger enforcement mechanisms and, in particular, an equal pay regulatory and enforcement unit. With that assurance, I hope she feels able to withdraw her amendment.
Baroness Chakrabarti (Lab)
My apologies to the Committee. It has of course been 75 years since the European Convention on Human Rights and 50 years since equal pay legislation—forgive that rather glaring howler. I am grateful to the noble Lord, Lord Jackson, in particular, and to my noble friend the Minister, whose officials have been very generous and thoughtful with their time. I look forward to watching their thinking develop on this forthcoming legislation. With that, I beg leave to withdraw.
Baroness Coffey (Con)
Member’s explanatory statement
This is a probing amendment to understand Parliament’s role as an employer itself and the role of over 600 other employers on the site.
Baroness Coffey (Con)
My Lords, I beg to move Amendment 279ZZZA—it somewhat reminds me of ZZ Top. This is, again, a bit of a niche amendment. The reason I say that is because many people—not your Lordships, I am certain—may think that “the Crown” in Clause 144 applies just to the King and the Royal Family. In fact, UK Ministers are of the Crown, and “Crown premises” means any government building and any land that it has, and so on. So the reality of what this clause refers to is much broader. I am sure that Ministers are thrilled that subsection (3) applies to them, so they will never be found criminally liable in that regard.
The Deputy Chairman of Committees (Baroness Finlay of Llandaff) (CB)
Does the noble Baroness wish to move her amendment?
Baroness Coffey (Con)
I thought I started by saying I would move it, but yes, I certainly do want to move it.
Lord Hunt of Wirral (Con)
My Lords, I thank my noble friend Lady Coffey for her amendment. She raises thoughtful and important questions about Parliament’s role as an employer and the complexity of managing the site, which contains over 600 other employers. These are legitimate concerns that deserve proper consideration, not least because Parliament should seek to model best practice in matters of employment and compliance. I think we all agree with that, but does it comply, and should there be a power of entry into these premises to check that we are complying?
My noble friend has made compelling points, and I hope that the Minister will respond with clarity and detail. The concerns that my noble friend outlined are not theoretical; they touch on the credibility of this institution as both lawmaker and employer. I therefore look forward to hearing the Minister’s response and the Government's justification for retaining—or reconsidering—the exemption as drafted.
The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)
My Lords, I thank the noble Baroness, Lady Coffey, for her amendment, which raises an important topic: how the enforcement provisions in Part 5 would apply to Parliament and MPs as employers.
Parliament must of course comply with employment legislation. However, the Bill provides that the powers of entry in Part 5 cannot be exercised in relation to
“premises occupied for the purposes of either House of Parliament”;
otherwise, Part 5 would apply to both Houses of Parliament and to MPs as employers. We are in danger of having something similar to—but slightly less than—a deep constitutional crisis, because the approach was agreed on the advice of the House authorities. It is therefore not a government decision; it is a decision made by the House authorities. They are more powerful, as far as I can see, and they can therefore overrule what the Government may think about all this.
This approach is not unusual. It aligns with recent precedents, such as Section 165(1)(a) of the Building Safety Act 2022, to respect parliamentary privilege. In this case, Parliament has to comply with employment legislation. The only issue raised here is about the power of entry not applying to the Parliamentary Estate. The noble Baroness might understand why we want to make sure that the Parliamentary Estate is secure from that challenge, and there is probably another place where she could raise her concerns about employment in the Parliamentary Estate. I have some sympathy with some of the cases that she argued about, but I suggest that she sees the House authorities about them. I therefore ask the noble Baroness to withdraw her amendment.
Baroness Coffey (Con)
I certainly will withdraw it. I did not mean to put the Minister in a difficult place, and her answer was very gracious. My amendment was based on the expectation that this is a royal palace, where things such as licensing laws and health and safety rules do not technically apply. However, that aside, we still need to consider how we act. If nothing else, I hope that this short debate has contributed to reminding ourselves of the obligations that we all share. With that, I beg leave to withdraw.
Lord Sharpe of Epsom
“Impact assessment on enforcement of holiday pay compliance(1) The Secretary of State must, within 12 months of the day on which this Act is passed, lay before Parliament an impact assessment of the ability of businesses to comply with the enforcement provisions of this Act relating to holiday pay entitlements.(2) The assessment under subsection (1) must include—(a) an evaluation of the practical, administrative and financial implications for employers in meeting the requirements relating to holiday pay,(b) consideration of the capacity of small and medium-sized enterprises to comply with those requirements, and(c) an analysis of any barriers to compliance identified during implementation.”Member’s explanatory statement
This amendment places a duty on the Secretary of State to assess how effectively businesses—particularly small and medium-sized enterprises—are able to comply with the enforcement mechanisms relating to holiday pay under this Act, and to identify any practical barriers or burdens.
Lord Sharpe of Epsom (Con)
My Lords, I will speak to Amendments 279ZZB and 305 to 309, which are in my name.
Turning first to Amendment 279ZZB, we firmly support the principle that workers must receive their full entitlement to holiday pay and that those rights must be enforceable. However, we believe that achieving that goal in practice, particularly under the new framework set out in the Bill, requires us to be clear-eyed about the real-world challenges that many businesses face. Holiday pay is one of the most complex areas of employment law and has only become more so following the changes introduced in January of this year.
While some employers regrettably seek to avoid their obligations and should rightly being sanctioned, the reality is that many more are simply trying to navigate a legal framework that is very confusing, technical and still evolving. For small and medium-sized enterprises in particular, compliance is not always a question of willingness but of capacity and clarity. That is why this amendment is both timely and proportionate: it asks only that the Secretary of State undertakes an impact assessment to consider how businesses—particularly SMEs—are coping with the new enforcement provisions. It would require an evaluation of the practical, administrative and financial implications of compliance and establish whether any barriers have emerged during implementation.
Crucially, this is not about weakening enforcement. In fact, it is quite the opposite: it is about ensuring that the fair work agency, which we hope will become a cornerstone of enforcement under this Bill, is properly resourced, modernised and equipped to support both workers and employers in meeting their obligations.
Turning to Amendment 305, this Government have managed to get unemployment to hit its highest since the pandemic—4.6%, according to the most recent ONS figures. This is not a figure that we can shrug off because, of course, behind it are real lives, real households and real businesses that are facing uncertainty. At the same time, the business environment is under considerable strain. Recent changes to national insurance contributions have forced employers to make extremely difficult decisions. The employer rate has risen from 13.8% to 15% and the threshold has been lowered, placing even greater pressure on payrolls.
Research from S&W has shown that around a third of UK business owners are still planning further job cuts as a direct result of these changes. Many have already begun reducing headcount. Others are cutting hours, freezing pay or raising prices—moves that will impact both employees and consumers. So, the question that has to be asked is: how will this legislation affect employment in that context? I should also have mentioned, of course, that May showed a very significant drop in payroll numbers.
It is easy to sit in Westminster and write these rules. It is much harder to understand how the rules will play out in towns and factories, in small businesses, in hospitality, in logistics, and across the many sectors that make up our labour market. That is why this amendment is vital.
I turn to Amendment 307. The British Retail Consortium has warned of a potential “high-street bloodbath”, with one in 10 retail jobs at risk over the next three years, if the Bill’s measures are implemented without careful consideration. Retailers are already grappling with rising costs and squeezed margins, and these additional employment burdens could accelerate job losses in an industry that is vital to our economy. I believe that 180,000 jobs—I forget the precise number—are at risk through to 2028, according to the BRC.
Similarly, the Institute of Directors has published stark findings showing that nearly three-quarters of its members—72%—believe that this legislation will dampen economic growth. Some 49% of business leaders say they plan to reduce hiring; 36% of them intend to outsource more roles; and 52%, more than half, anticipate investing further in automation as a response. These figures paint a clear picture: employers are preparing to scale back on job creation and are likely to replace human roles with technology, in response to rising costs and compliance demands.
The Federation of Small Businesses echoes these concerns. SMEs are the backbone of the UK economy, yet many are telling us that the cumulative impact of new regulations, increased national insurance contributions and rising wage floors are forcing them to reconsider recruitment plans or even reduce existing staff. The FSB has called for a more balanced approach that safeguards workers’ rights without stifling the very businesses that create these jobs, and the growth. Can the Minister name a single business that expects to increase hiring because of the measures in the Bill?
On Amendment 306, what of our youth? At a time when the Government should be prioritising opportunities for young people entering the workforce, the figures are concerning. Between January and March 2025, an estimated 354,000 young people aged 16 to 24 were not in education, employment or training; that is up by 21,000 compared with the same period last year. The Government will no doubt argue that the provisions in this Bill, such as the right to guaranteed hours and changes to statutory sick pay, are designed to protect vulnerable workers, many of whom are young and may be on the margins of employment. However, the reality is more complex. Although well intentioned, these changes will make it more costly and complicated for employers to hire young people, who often lack the experience and are seeking flexible or part-time work to get started in their careers. The burden of additional costs and rigidities can discourage employers from offering entry-level roles or apprenticeships—exactly the opportunities that young people desperately need to develop skills and build work histories.
On Amendments 308 and 309, let me turn to a specific sector in the UK: manufacturing. In the north-west, manufacturing is not only a significant contributor to the regional economy but a vital source of skilled employment and innovation. Many manufacturers there are actively seeking to invest in advanced technologies, including artificial intelligence and automation, to improve productivity and to remain competitive on the global stage. However, these ambitions risk being undermined by the additional costs and compliance burdens imposed by this Bill. Manufacturers are already grappling with the challenges of global tariffs, supply chain disruptions and inflationary pressures; adding further regulatory and financial strain threatens to hollow out this critical sector.
If the increased labour market enforcement and associated costs become too great, there is a real risk that manufacturers will reduce investment, scale back hiring or even relocate operations. The knock-on effects on local economies, particularly in regions depending on manufacturing, would be severe, affecting jobs, skills development and regional growth. While the objectives of the Bill—to protect workers’ rights and promote fair employment practices—are indeed laudable, we must ensure that they do not come at the expense of vital industries and communities. I beg to move.
Lord Goddard of Stockport (LD)
My Lords, these amendments collectively highlight the critical importance of supporting small and medium-sized enterprises as they adapt to the changes introduced by the Bill. We have raised this issue repeatedly throughout our deliberations. Night after night, this comes up in other parts of the legislation. It all comes back to small businesses. My biggest postbag at the moment is from small businesses concerned about their future—of no political persuasion at all. This is one of the few chances, in this small debate, where we get to talk about those challenges and the enforcement mechanisms, especially around things such as holidays. As alluded to by the noble Lord, Lord Sharpe, compliance can be complex and resource-intensive, although I do not fully agree with his complete doom-and-gloom scenario of this part of the Bill.
Recent data shows that SMEs employ around 60% of the UK workforce, yet many report that regulatory burdens can disproportionately strain their limited administrative capacity. The amendments proposed by the noble Lord, Lord Sharpe, such as Amendment 279ZZB, would place a duty on the Secretary of State to assess how effectively the SMEs can meet those obligations and to identify any practical barriers that they face. It is important to ensure that the Bill’s ambitions do not inadvertently disadvantage the very businesses that form the backbone of our economy. That the Government should have a means of tracking how the Bill’s implementation is impacting on the economy is vital.
I briefly turn to the reviews called for in Amendments 305 and 309, which seek to examine the Bill’s impact on employment, youth opportunities, job creation and regional labour markets, especially in the north-west of England, where my heart still lies and where the Industrial Revolution began. We are trying to embrace AI. We are trying to become ground-breakers again at Manchester University and other establishments. I know that these really affect the regional labour markets, but these are valid concerns, as we are still recovering from the recent economic shocks. The requirement for independent assessment would help us get a clearer picture of this legislation and how it affects businesses and workers. While amendments by the noble Lord, Lord Sharpe, and others are cautious in their approach, they reflect a genuine concern that implementation must be manageable for SMEs, without stifling growth for employment.
As we move forward, I look forward to hearing the Minister’s view on these amendments and would appreciate some remarks about how the Government intend to physically support SMEs throughout these changes and the unintended consequences. Because that is at the heart of this. You can have and develop the policies, but what businesses are asking me is, “What are you going to do? What can I see that helps me to embrace this legislation and to take people on, train them and employ more people?”—as opposed to the perception that the burden is against that, which is an unintended consequence of trying to do the right thing of giving everybody employment rights, and it is a fine line. We are politicians and we understand it a bit clearer than people in a small company employing 10 or 15 people. They are just concerned that something is going to overwhelm them: something is going to come that they cannot control.
I want the Minister to explain the following to me and members of my group. What practical things will the Government put in place to give those small businesses confidence to embrace this and to work with them to make employees more secure, safer and have better rights? Meanwhile, how can small and medium-sized companies, not the giant multi-million companies, carry on creating jobs, developing the economy and lifting us out of the doom and gloom? We have done it before, and we can do it again. That is the question that needs answering—whether or not the Minister can do so tonight, we need some clarity before Report, or we will be meeting other people. This is important. This is not just me grandstanding; small businesses are saying to me, “Just ask the Government what they are doing and how they can help us”. This is what I am trying, clumsily, to say as we draw to a close this evening: if the Minister can give me some hope that what we are doing and have put in place will help small and medium businesses, I will be satisfied.
Lord in Waiting/Government Whip (Lord Leong) (Lab)
My Lords, here we go again on impact assessment. I hope that the noble Lord, Lord Sharpe, will forgive me if some of my notes repeat what was said in previous debates, but I will answer some of the points here. First, I thank the noble Lords, Lord Sharpe, Lord Hunt and Lord Goddard, for their amendments relating to impact assessment.
I refer to the point by the noble Lord, Lord Goddard, about what the Government are doing concerning SMEs. I have just recently been appointed as the spokesperson for the Department for Business and Trade, and my priority is to have regular communications with micro-businesses and small businesses. That is what I will be focusing on. Today, we appointed the Small Business Commissioner, who will start work very shortly in tackling late payments and some of the abuses that small businesses experience from big companies not paying them on time. We will be publishing a small business strategy very soon, and our industrial and trade strategy very soon as well, hopefully sometime next week or thereabouts. We are doing a lot—not only myself but the Secretary of State, my noble friend Lady Jones and all the Ministers in the department. We have regular contact right across the business community.
We have had extensive debate already on impact assessments related to this Bill. My commitment in an earlier debate to meet noble Lords to further discuss the impact assessments still stands. The Government have already published a comprehensive set of impact assessments based on the best available evidence on the workers likely to be affected by these measures. This includes an assessment on the economic impacts of the Bill, including on workers, businesses, sectors and regions. This package shows that there are clear, evidence-based benefits from tackling issues holding back the UK labour market. This analysis is based on the best available evidence and consultation with external experts and stakeholders, including academics and think tanks. Further analysis will be forthcoming, both in the form of an enactment impact assessment when the Bill secures Royal Assent and when we consult on proposed regulations to meet the Better Regulation requirements.
Before I conclude, I share with noble Lords some really startling statistics. We already know that healthier and happier workers are more productive workers. The Health and Safety Executive estimates that stress, depression or anxiety accounted for something like 17.1 million working days lost in 2022-23, which is equivalent to a loss of something close to £5.3 billion in output per year. In addition, close to 2 million employees report feeling anxious about hours worked or shifts changing unexpectedly. By increasing the job security of these workers, the Bill would have well-being benefits worth billions of pounds a year. The Bill will therefore create a healthier and happier workforce, which is not only the right thing to do but will help businesses by making the workers more productive as well as resulting in lower treatment costs for the NHS.
Earlier, the noble Lord, Lord Sharpe, asked me what we have done to support growth since getting elected. I am proud to share with the noble Lord that, since the election, 500,000 more people are in work. In recent weeks, we have had the strategic defence review with some 30,000 new jobs building submarines created, and the announcement of the Sizewell C project, which will create some 10,000 new jobs. So, we are creating new jobs.
In addition, we have people who are investing in this country and who have confidence in this Government. Jamie Dimon, who has run one of the largest US banks, JPMorgan Chase, for two decades, told the Financial Times:
“I’ve always been a believer in the UK’s inherent strengths as a place to do business and there’s much to like about the new government’s pro-growth agenda”.
Further, a couple of weeks ago, Jon Gray, president of Blackstone, one of the largest private equity companies in the world, which has invested close to £100 billion in the UK and employs some 50,000 people, told the Times:
“I would give the UK government a lot of credit for embracing business”.
This is not what the Government are saying, but what people with money who are investing in this country are saying to us. Further, every single day, £200 million is being invested in tech companies in this country. I do not call that a small sum, I call it confidence in the UK Government and what we are doing for business.
Baroness Noakes (Con)
My Lords, I listened very carefully to that wonderfully rosy picture of the UK economy. Can the Minister reconcile that with the most recent employment statistics, which show a decrease in payrolled employment and an increase in unemployment? That does not reconcile with what he is trying to convince us is the case.
Lord Leong (Lab)
I thank the noble Baroness for that. Figures go up and down every month but let us look at it in the longer term. We are creating new jobs and that is what is really important. In conclusion, I ask the noble Lord, Lord Sharpe, to withdraw his amendment.
Lord Sharpe of Epsom (Con)
I am enormously grateful to the Minister for his passionate defence of his Government and for his remarks. I am genuinely delighted that he has taken on a new role in small business because, unlike the vast majority of his Government, he actually knows what he is talking about when it comes to small business. We are very pleased to hear that and we welcome his general remarks. I also agree with Jamie Dimon about the growth agenda, but the fact is the Bill will not help the growth agenda. That is the argument we are trying to make.
I am also grateful to the noble Lord, Lord Goddard, for his remarks. He accused me of being doomy and gloomy, but I did not get those statistics out of thin air; they were all supplied by the employer organisations that we referenced. If he would like, I will happily put him in touch with them all. The fact is that, once again, the Minister could not rise to the challenge of naming a single business that expects to increase hiring because of the measures in the Bill, and references to the strategic defence review do not help that argument.
The other reason why I am doomy is because, the other day, I came across a notice in a window in London that said, “After much reflection, and as a result of the substantial business rate and national insurance cost increases imposed on us in this year’s Budget, we have made the difficult decision to close. Our final day of service will be 28 June 2025”. That is a real business going out of business—that is disgraceful.
The Government’s impact assessment of the Bill, which we have debated a number of times and which I know irritates the Minister every time we bring it up, was simply inadequate. There is not enough detailed rigorous analysis to understand how these enforcement measures will affect businesses and employment across the country. Without that, we are walking blindly into serious economic risks. At this rate, if the Bill proceeds without the necessary amendments and safeguards, it will not just fall short, it will create unemployment. The additional burdens on employers, especially small and medium-sized businesses and crucial sectors like manufacturing, threaten to reduce hiring, stall investment and ultimately cost jobs. This is not speculation; it is happening, as my noble friend Lady Noakes pointed out. It is a clear and present danger based on the evidence that we have seen, and the trend is unlikely to diminish.
We support workers’ rights, but not at the expense of widespread job losses and economic harm. The Government have to provide a proper, thorough impact assessment—one that honestly addresses these risks—before we proceed further. I am grateful to the noble Lord for his offer of a meeting to discuss this, but I am not sure what there is to discuss without the actual impact assessment or the commitment to hold it as soon as possible. If this does not happen, the Bill will fail both workers and employers, and we will face the consequences of higher unemployment as a result. That is something no one wants. I beg leave to withdraw the amendment.
“(2) Any reference in section 134 to HMRC information includes a reference to any information mentioned in sub-paragraph (1)(a) or (d) which—(a) was disclosed to the Director of Labour Market Enforcement or a person falling within paragraph (a), (d), (e), (f) or (g) of paragraph 6(4) by the Commissioners for His Majesty’s Revenue and Customs or a person acting on behalf of the Commissioners, and(b) was not obtained by an officer in the course of acting for the purposes of the National Minimum Wage Act 1998 or by virtue of section 26(2) of the Immigration Act 2016.”Member's explanatory statement
This amendment provides for information previously disclosed by HMRC to enforcement authorities, and treated by paragraph 13 of Schedule 11 to the Bill as having been obtained by the Secretary of State in connection with the exercise of enforcement functions under Part 5 of the Bill, to be treated as HMRC information for the purposes of clause 134, which imposes restrictions on the onward disclosure of such information without authorisation from HMRC.
Member's explanatory statement
This amendment corrects an incorrect cross-reference.
Member's explanatory statement
This amendment is consequential on my amendments of clause 148 at page 146, line 43 and page 147, line 9.
““employer” has the meaning given by subsection (1A);”Member's explanatory statement
This amendment is consequential on the definition of “employer” being inserted into Part 5 by my amendment of clause 148 at page 146, line 43.
Member's explanatory statement
This amendment is consequential on the definition of “worker” being inserted into Part 5 by my amendment of clause 148 at page 147, line 9.
“(1A) In this Part “employer” means any of the following—(a) an employer within the meaning of section 230(4) of the Employment Rights Act 1996 or Article 3(4) of the Employment Rights (Northern Ireland) Order 1996 (S.I. 1996/1919 (N.I. 16));(b) a person who is an employer for the purposes of Part 4A of the Employment Rights Act 1996 in relation to a worker mentioned in section 43K(2) of that Act;(c) a person who is an employer for the purposes of Part 5A of the Employment Rights (Northern Ireland) Order 1996 in relation to a worker mentioned in Article 67K(2) of that Order;(d) a person who is the principal for the purposes of section 47A or 63A of the Employment Rights Act 1996 or Article 70A or 91A of the Employment Rights (Northern Ireland) Order 1996 (right to time off for young person for study or training);(e) a person who is—(i) an employer for the purposes of Chapter 3 or 4 of Part 2A of the Employment Rights Act 1996 (zero hours workers) by virtue of section 27BJ(7) or (as the case may be) 27BP(8) of that Act,(ii) an employer in relation to a zero hours arrangement within the meaning of Part 2A of that Act (see section 27BZ2(1) of that Act), or(iii) an employer in relation to a non-contractual zero hours arrangement within the meaning of Article 59A of the Employment Rights (Northern Ireland) Order 1996;(f) in relation to an individual who is an agency worker within the meaning of Part 2A of the Employment Rights Act 1996—(i) a person who is the hirer within the meaning of any Part of Schedule A1 to that Act (agency workers: guaranteed hours and rights relating to shifts);(ii) a work-finding agency within the meaning of Schedule A1 to that Act (see section 27BV(4) of that Act);(iii) a relevant person within the meaning of section 47I of that Act (agency workers and Schedule A1 rights);(g) in relation to an individual who is an agency worker within the meaning of the Agency Workers Regulations 2010 (S.I. 2010/93) or the Agency Workers Regulations (Northern Ireland) 2011 (S.R. (N.I.) 2011 No. 350)—(i) the hirer within the meaning of the relevant Regulations;(ii) (where the worker is not actually employed by the temporary work agency) the temporary work agency within the meaning of the relevant Regulations;(h) in relation to an individual seeking to be employed by a person as a worker, that person.”Member's explanatory statement
This amendment defines “employer” for the purposes of Part 5. In particular, the definition reflects the persons on whom requirements are imposed by clauses 1 to 5 (zero hours workers, etc).
“(4) In this Part “worker” means any of the following—(a) a worker within the meaning of section 230(3) of the Employment Rights Act 1996 or Article 3(3) of the Employment Rights (Northern Ireland) Order 1996 (S.I. 1996/1919 (N.I. 16)); (b) an individual who is not a worker as defined by section 230(3) of the Employment Rights Act 1996 but who is a worker for the purposes of Part 4A of that Act (see section 43K(1) of that Act);(c) an individual who is not a worker as defined by Article 3(3) of the Employment Rights (Northern Ireland) Order 1996 but who is a worker for the purposes of Part 5A of that Order (see Article 67K(1) of that Order);(d) an individual who—(i) is a worker for the purposes of Chapter 3 or 4 of Part 2A of the Employment Rights Act 1996 (zero hours workers) by virtue of section 27BJ(7) or (as the case may be) 27BP(8) of that Act,(ii) works under a zero hours arrangement within the meaning of Part 2A of that Act (see section 27BZ2(1) of that Act), or(iii) works under a non-contractual zero hours arrangement within the meaning of Article 59A of the Employment Rights (Northern Ireland) Order 1996;(e) an individual who is an agency worker within the meaning of Part 2A of the Employment Rights Act 1996;(f) an individual who is an agency worker within the meaning of the Agency Workers Regulations 2010 (S.I. 2010/93) or the Agency Workers Regulations (Northern Ireland) 2011 (S.R. (N.I.) 2011 No. 350);(g) an individual seeking to be employed by a person as a worker.”Member's explanatory statement
This amendment defines “worker” for the purposes of Part 5. In particular, the definition reflects the persons on whom rights are conferred by clauses 1 to 5 (zero hours workers, etc).
Lord Hunt of Wirral
“(2) Subject to subsection (3), this section is repealed three years after the day on which it comes into force.(3) The Secretary of State may, following a full independent review of the operational impact of the section on tribunal efficiency and access to justice, by regulations made by statutory instrument provide that the provisions of this section are not repealed in accordance with this section but shall continue in force indefinitely.(4) The regulations in subsection (3) are subject to the affirmative resolution procedure.”Member's explanatory statement
This amendment introduces a sunset clause to ensure that the extension of time limits for bringing employment tribunal claims is subject to periodic parliamentary oversight.
Lord Hunt of Wirral (Con)
My Lords, Amendment 279GA would introduce a sunset clause to ensure that the extension of time limits for bringing employment tribunal claims is subject to periodic parliamentary oversight. I will speak also to Amendments 330ZA, 330D and 334A in my name.
I have tabled these amendments along with my noble friend Lord Sharpe of Epsom because I believe that the state of the employment tribunal system is deeply concerning and urgently requires our attention. The proposals before us introduce a range of new rights for workers, including the critical right to claim unfair dismissal from day one of employment. We must therefore confront the uncomfortable truth that the current tribunal system is simply not prepared to handle the additional burden that this Bill will place upon it. Indeed, we have heard from a respected law firm that there is broad consensus among legal professionals that the employment tribunal system is, in its words, the “biggest problem in the legal world”.
The Government’s own impact assessment suggests that tribunal cases will increase by around 15% as a result of these reforms, yet I must ask how this figure has been calculated. Given the scale of the backlog we are currently witnessing, can this be anything other than a gross underestimate? The reality is that, by extending the time limits within which individuals can bring claims, the Bill itself may actively incentivise an increase in the volume of cases. If people have more time to bring claims, it is only natural that more claims will be submitted—claims that must then be processed by a system that is already groaning under enormous pressure.
To put this in perspective, we are currently facing, we are told, an employment tribunal backlog of nearly 50,000 cases. This backlog has now reached record levels, with preliminary hearings being scheduled as far away as April 2026, and full hearings not likely to take place until well into 2027. This must be a crisis. A delay of this magnitude means that justice for many is effectively denied. When someone has to wait years for their case to be heard, the protection that the law is supposed to afford becomes little more than an empty promise.
The causes of this backlog are clear. There is an acute shortage of employment judges. There is insufficient funding. There is inadequate administrative support. Although the Government have pledged to recruit hundreds of new judges, the practicalities of ensuring that those judges have the necessary expertise and that adequate administrative support is in place remain significant challenges.
That is why I believe these amendments are vital. They do not seek to block or delay the introduction of important workers’ rights, but they instead insist on responsible, measured implementation. It is essential that before these new rights come into force an independent and thorough assessment is conducted to evaluate the capacity and effectiveness of the tribunal system. This assessment has to address current delays, judge numbers, funding and the likely impact of this Bill’s provisions on tribunal caseloads. Moreover, the Government must commit to implementing all necessary measures identified in this assessment to reduce the backlog to a manageable level, specifically to fewer than 10,000 outstanding claims. Only then should these rights be activated.
This is all about ensuring that, when workers exercise their rights, they have access to a tribunal system capable of delivering timely, fair justice. Additionally, the amendment regarding the extension of time limits for claims rightly insists that this measure cannot come into effect until the Senior President of Tribunals certifies that the system can handle the expected increase in cases without further lengthening hearing times. Without such a safeguard, we risk compounding the problem and turning an already overstretched system into something unworkable.
There is another important point that I must raise. Nowhere in the Government’s impact assessment is there any explanation of why the option of introducing a right to claim unfair dismissal between day one and two years was not considered. If the intention is truly to balance the employment relationship and provide fair protections, why do we have to leap to day one? This decision is not just a legal technicality; it carries real risks. One such risk is the disincentive it creates for employers to hire workers who may be perceived as risky or less secure in the labour market—such as individuals with a history of mental health challenges, younger workers or others on the margins of employment —by exposing employers to potential unfair dismissal claims from the very first day. This Bill may inadvertently make it even harder for these vulnerable groups to find work in the first place. This would be a tragic and unintended consequence, compounding insecurity rather than alleviating it.
We have debated at length the potentially vast powers of the new fair work agency, its funding and the role it might play. However, many questions remain. Will the fair work agency with its undefined enforcement officers and unclear operational framework genuinely take on the enforcement of workers’ rights in a way that meaningfully reduces the burden on the already overstretched employment tribunals? Or will tribunals continue to bear the brunt of this increased workload without adequate support or relief?
I now look to the Government to provide this House, workers, businesses, law firms, and no doubt the tribunals with some assurance, clarity and ideally a timeline for the day-one rights provisions in this Bill. Perhaps this is the moment when the Minister will at last share with us, at least in draft, the implementation plan that we have heard so much about during the course of this Committee. Will she please undertake to ensure that we have the implementation plan before we reach Report?
Baroness Lawlor (Con)
My Lords, I support Amendment 279GA for a sunset clause. I perfectly understand the reason for extending the period in which employees can make claims, but I am quite sure it will increase the burden on the tribunals. We have heard about the very long delay, with even preliminary hearings not scheduled until April 2026, and these delays have continued for some years. People going to tribunal sometimes have to wait more than 18 months just to have the preliminary hearing. If numbers increase, as they are likely to, as my noble friend suggested, it is going to put far more pressure on the tribunals. The parliamentary oversight proposed and the sunset clause must take account of that.
Not only is there no point in law in having a claim left unsettled for years, but it is very bad for business to have the uncertainty. It is very bad for employees and their lives to be subject to such delays and uncertainties in what is going to happen to them professionally, because taking a claim to tribunal is not an easy matter. It can be expensive and full of obstacles. Not knowing how it will pan out is very worrying for people. For businesses, being subject to constant pressures of claims in a tribunal, whether they are justified or not, brings insecurity and a lack of confidence.
For these reasons, I think this moderate request for a sunset clause and coming back to Parliament for an affirmative vote are a good proposal, and I hope the Government will listen kindly to it.
Baroness Jones of Whitchurch (Lab)
I thank the noble Lord, Lord Hunt, for introducing these amendments, but I say to him that the problem he has described so vividly was one we inherited from the previous Government. We are acutely aware that these issues need to be addressed, and I share his desire to ensure that the employment tribunal system can manage its existing caseload and the potential increase from the Bill’s measures. I assure your Lordships that we are working across government and with business and the unions to identify ways to improve a system that we inherited that is not working currently for anyone.
We are already recruiting more judges and legal case workers and providing additional resources to ACAS. On top of that, we are considering other things, such as the role that the expanded fair work agency could play in reducing the time spent awaiting costly and lengthy tribunal claims.
I would be delighted to receive any constructive suggestions from the noble Lords on this issue, but it would be entirely disproportionate to make the vital improvements to workers’ rights contained in the Bill dependent on the kind of review that their amendments propose. It would be wrong to take workers’ rights to challenge unfair practices away from them when they are not to blame for the backlog that we are currently grappling with.
Baroness Lawlor (Con)
The Minister made reference to the number of judges that the Government are busily recruiting so as to help the backlog, and this is part of the Government’s response. Of the 35,000 extra civil servants recruited since March 2024—these are the March 2025 figures—how many are judges, and how many of them will be in the employment tribunal service? I do not expect the Minister to have the figures to hand, but I would be pleased if she could write to me.
Baroness Jones of Whitchurch (Lab)
My Lords, 50 new fee-paid employment judges were appointed in 2024-25, and a further three recruitment exercises to further increase capacity are now being undertaken in 2025-26.
Lord Hunt of Wirral (Con)
My Lords, I am very grateful to my noble friend Lady Lawlor for putting all this in the context of the security or insecurity of workers right across the board faced with this terrible backlog. The Minister upbraided me for the previous Government’s culpability in this, but she will know that we have been expressing serious concern about this backlog for a very long time. The fact is that it has got worse: it is 20% up on what it was when the Government came into office last year. The Minister was quite right to say there was a backlog, but my plea to her is not to make it worse.
As we draw this debate to a close, I worry that the Government have not fully grasped the critical importance of these amendments. They are not obstacles to progress but necessary safeguards to ensure that the rights we are creating are not rendered ineffective by an overwhelmed tribunal system. We urgently need clarity on the implementation plans.
The Minister promised that we would have the implementation plan “shortly”. The definition of “shortly” is “within the next hour or so”. In the dictionary, we are told that shortly means that something is about to happen. So where is it? I would like to believe that the noble Baroness’s reference to the word, which she must have carefully considered, means that tomorrow we will get it. I am very happy for her to interrupt me if I am incorrect—perhaps she could clarify.
Baroness Jones of Whitchurch (Lab)
I was trying to be helpful to the noble Lord, but since he provokes me, I will simply say that I have used my interpretation of “shortly”, rather than the dictionary definition. It will not be happening in the next hour, I can assure the noble Lord of that.
Lord Hunt of Wirral (Con)
Could I possibly have a copy of the noble Baroness’s dictionary? She has just quoted from her dictionary, but sadly I do not have it to hand. We would all like to see the implementation plan, so please can we, if possible, before our next day in Committee next Tuesday?
There are all sorts of issues we have discussed that have not been answered. Why a measured approach between day one and two years? Was it ever seriously considered? There has been no answer from the noble Baroness on that. Did she look at it or did she move straight to day one? The gap in reasoning leaves many of us deeply worried about the unintended consequences for workers and employers alike. Regrettably, these are crucial issues which remain unresolved, and the Government have yet to provide the assurances we need. As we approach Report, we will have to return to this matter with a determination to secure the clarity and commitments that are so essential if the Bill is ever to be successful. I beg leave to withdraw the amendment.
Lord Jackson of Peterborough (Con)
My Lords, I will be very brief. I feel like the support act, really, because the substance, the meat, of this issue and this clause has been debated, although I am delighted that this is the final schedule and the final part, so we are on the final stages of the Bill. I just say very briefly, with respect, to the Minister, that we often ask the Minister to write to elucidate the remarks that she and her colleagues have made in the course of the Committee’s proceedings. We are watching that and making sure that we do get replies and, if we do not get proper replies, we will raise those issues on Report. I do hope, very gently, that the Minister is aware of that. Of course, we understand that information is not always at her disposal or her colleagues’ disposal, but we will need that information in order to make an informed decision on Report if the House divides at that juncture.
The second issue that I think it is appropriate to raise, raised several Committee days ago by my noble friend Lady Coffey, is impact assessments. The Cabinet Office guidelines say that impact assessments should be updated as the Bill goes through. To the best of my knowledge, that has not happened, and I am not sure that the Minister has satisfactorily answered the question that my noble friend asked earlier. With that in mind, I think that the rationale that the Minister used for the extension from three to six months was not even tepid and not even weak; it was just non-existent. To say that the Law Commission has done a consultation I do not think cuts the mustard. We on this side believe firmly that extending that period will bring more uncertainty to business, will be more costly, will encourage more litigation and workplace strife and will be a false economy.
I look over at the Government Benches and I see the pawprints of the trade unions in this. I do not know why they would want to do this, but, as on so much of the Bill, they are seemingly pulling the strings and I think that, in the end, it will not be in the best interests of workers for this to happen, not least because, as my noble friend Lord Hunt of Wirral said, the system is creaking. It is no good saying, “Oh, well, it was creaking under you”; this Government have been in power 12 months now, it is incumbent on them to fix the system with their legislation and I think that this is a retrograde step. It will not work, it will backfire, and on that basis, I think that neither Clause 149 nor Schedule 12 should stand part of the Bill.
Lord Sharpe of Epsom (Con)
My Lords, most of what I needed to say was said in the last group, so I will not labour the points, except to add a bit of colour, because my noble friend Lord Hunt of Wirral and I consult quite widely. We consulted this morning with a distinguished employment lawyer, who told us that, if you apply now to an employment tribunal, you will have no chance at all of getting even a preliminary hearing for 10 months. That is next April. In order to get a resolution, a case resolved, you would be looking probably at December 2027. That is nearly two and a half years away. It will take a lot more than the number of judges the noble Baroness mentioned that they have recruited so far in order to fix that particular problem. I wish her good luck and I hope she succeeds, but I really do not think that we should be doing this.
Baroness Jones of Whitchurch (Lab)
My Lords, the first thing I will say to the noble Lord, Lord Jackson, is that if we say we are going to write, we will write: we do not need to be told that this is being monitored in some way. I would say that I feel that we on these Benches have bent over backwards to engage with noble Lords, not only in debates but outside, by having meetings and trying to work through some of these issues in more detail. So I do resent the accusation that we are somehow hiding from accountability on these issues. We are bending over backwards to be accountable.
I also say to the noble Lord, Lord Jackson, that we have updated the impact assessment and written to the noble Baroness, Lady Coffey, about it already. As noble Lords have said, we have now debated this issue quite extensively. We argue that the proposals we are putting forward will benefit not only employees but employers, by increasing the time within which workplace procedures and conciliation can be completed, creating an opportunity for more disputes to be resolved without the need for litigation.
Current ACAS performance data shows that that around a third of early conciliation notifications go on to submit an employment tribunal claim. Therefore, the longer period of time for resolving disputes internally and/or via conciliation will simplify the time limits for making employment tribunal claims and improve access to justice.
I have heard the arguments of the noble Lord, Lord Jackson, and, as I say, we have now debated this extensively. I can assure your Lordships that this clause and schedule are essential for those who need to bring a claim to a tribunal in order to have adequate time to prepare a robust claim. I therefore ask that they stand part of the Bill.
“Occupational and Personal Pension Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006
13A In the Schedule to the Occupational and Personal Pension Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006 (S.I. 2006/349) (employment rights and protections in connection with consultation), in paragraph 4(2)—(a) in paragraph (a), for “three” substitute “six”;(b) in paragraph (b), for “three” substitute “six”.”Member’s explanatory statement
This amendment extends from three to six months the time limit for bringing a claim in an employment tribunal under paragraph 4 of the Schedule to the Occupational and Personal Pension Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006.
Baroness Penn
“Substitution clauses: duties of company directors(1) The director of a relevant company has a duty to ensure that the company keeps a register of all dependent contractors.(2) The director must supply details of the register under subsection (1) with the Secretary of State within 12 months of the passing of this Act and every 12 months thereafter, subject to the provisions of the Data Protection Act 2018.(3) The Secretary of State may by regulations make provision about what information must be supplied in the register of dependent contractors.(4) For the purposes of this section―(a) a “relevant company” is a company that―(i) provides services in relation to postal and courier activities, food and beverage service activities or taxi operation,(ii) has more than 250 employees in the UK and overseas, and(iii) includes provision within the company’s contracts with contractors which allow the contractor to send another qualified person (a “substitute”) to complete the work in the contractor’s place if the contractor is unable to complete the work,(b) a “director” includes any person occupying the position of director, by whatever name called, and (c) “dependent contractor” means a person who—(i) performs work or services for the relevant company,(ii) is paid according to tasks performed rather than hours of work,(iii) depends partially or primarily on the relevant company for employment and income,(iv) is not required to perform services for the relevant company, and(v) is not specified as an employee or worker for the relevant company within a statement of employment particulars or a contract of employment.”Member’s explanatory statement
This amendment seeks to require certain company directors to keep a register of the people carrying out work for the company under so-called “substitution clauses”, which allow companies to permit their suppliers – including some delivery couriers – to appoint a substitute to supply services on their behalf.
Baroness Penn (Con)
My Lords, Amendment 280 is designed to address the use of substitution clauses that allow for illegal working. There are different ways of measuring it, but on some estimates there are 4.7 million gig economy workers in the UK, including around 120,000 official riders at Uber Eats and Deliveroo, two of the largest delivery companies in the country.
For years we have heard stories of labour market fraud and visa abuse committed by contractors related to those companies, and much of that abuse has come through the legal loophole created by substitution clauses. These clauses have traditionally been used to give flexibility to businesses, but in the gig economy they are being used to allow illegal working. From late 2018 to early 2019 there were 14,000 fraudulent Uber journeys, according to Transport for London. During random checks two years ago, the Home Office found that two in five delivery riders who were stopped were working illegally.
I acknowledge that some action is being taken that will address part of this issue. Ministers have said that they will consult on employment status and moving towards a two-part legal framework that identifies people who are genuinely self-employed. I support that ambition, but as someone who worked on the original proposals in this area that stemmed from the Taylor review, I also understand the complexity of resolving this, and I fear that it could end up being put in the “too difficult” pile in Ministers’ in-trays.
The Government have also brought forward amendments to the borders and immigration Bill to include a legal requirement for organisations to carry out right-to-work checks on individuals they employ under a worker’s contract or as individual subcontractors, and for online matching services that provide details of service providers to potential clients or customers for remuneration. What are the timescales for the consultation and the secondary legislation to bring those measures into force? On my understanding, these provisions will not extend to the use of substitutes, meaning that this loophole will remain.
Amendment 280 seeks to go some way to addressing this through the introduction of a comprehensive register of all dependent contractors. Such transparency would help to ensure that employment rights are upheld and pay is not suppressed through illegitimate competition, and would also support the enforcement of right-to-work checks. An alternative approach would be to ban substitution clauses altogether, or at least for those companies and sectors where abuse is the most prevalent—or, as Amendment 323E in a later group from the noble Lord, Lord Berkeley, seeks to do, restrict their improper use.
Given that substitution clauses have played an important part in case law on determining employee or worker status, this could have broader implications, so I have focused on transparency as a first step. But I would be interested to hear the Minister’s view on removing or restricting the use of substitution clauses and whether that is preferable to a register delivering transparency, for example.
A further alternative would be to introduce right-to-work checks for substitutes by the original engaging business. While this was deemed to be out of scope for this Bill in the Commons, I had hoped that the Government’s amendments to the borders Bill would fill this gap. However, unless I have misunderstood—I would be grateful if the Minister can clarify this for me—their approach leaves this loophole untouched. The impact assessment for the Government’s amendments to the borders and immigration Bill reflects the harms that illegal working has on our economy. It says:
“Illegal working creates unfair competition, negatively impacts legitimate businesses, and puts additional pressure on public services. A rapid growth has been observed in the UK in modern labour market models where businesses can currently engage workers without the requirement to complete right to work checks”.
Without further action to address the abuse of substitution clauses, as the App Drivers and Couriers Union has said:
“Unfortunately there is this loophole that allows some bad people to come through. They are not vetted so they could do anything”.
The Government need to take action to guarantee fairness and justice in our labour market. A register of dependent contractors provides a way to resolve this abuse and hold big employers in the gig economy to account. I beg to move.
Lord Hunt of Wirral (Con)
My Lords, I congratulate my noble friend Lady Penn on tabling this important amendment. The requirement for certain company directors to maintain and report a register of dependent contractors under substitution clauses is a measure that would bring much-needed transparency to a complex area of employment. It recognises the evolving nature of work arrangements in sectors such as courier services and taxi operations. Of course, there are compliance burdens associated with maintaining such registers, especially for large companies operating over multiple jurisdictions. Additionally, data protection considerations must be carefully addressed to ensure sensitive personal information is handled appropriately and securely. These are important factors that require careful balancing against the benefits of increased transparency. We look forward to hearing the Minister’s response.
Lord Leong (Lab)
My Lords, I thank the noble Baroness, Lady Penn, for her Amendment 280 and for meeting with my noble friend Lady Jones and me last month to discuss this very important issue.
I reassure the noble Baroness that the Government are already taking action to tackle the main risks that arise from substitution, including illegal working. As she mentioned, substitution is a complex area on which we are still gathering data.
An ONS online survey of around 10,000 businesses from across the UK, published this month, found that close to 3% of UK businesses use substitution clauses. While we do not know the number of substitution clauses used in the gig economy, we know that this could impact a large number of individuals. Although estimates of the number of gig economy workers vary vastly in various surveys, from around 500,000 to 4.4 million people—the noble Baroness mentioned some 4.7 million people—the CIPD finds that roughly 75% of those in the gig economy consider themselves to be self-employed.
We have introduced an amendment to the Border Security, Asylum and Immigration Bill, as was mentioned by the noble Baroness, to extend the scope of employers required to carry out right-to-work checks to those who engage limb (b) workers or individual sub-contractors, such as those working in the gig economy. This requirement will cover those working as substitutes.
We understand the complexity of these issues, and of employment status more widely, and that is why we have committed to consult in detail on a simpler framework for employment status. Comprehensive consultation will better account for the full range of today’s employment relationships, while addressing the minority of employers who will seek to avoid legal obligations.
We were clear that some reforms in our plan to make work pay will take longer to undertake and implement. We do not have a set timeline for consulting on employment status at this point, and I assure the noble Baroness that we will keep her up to date as and when this happens. We understand the complexity of employment status, as I mentioned earlier, and we are definitely committed to consulting in detail. Comprehensive consultation will better accounts for the full range of today’s employment relationships, while also addressing the minority of employers who will seek to avoid legal obligations, as I mentioned.
The noble Baroness’s amendment would create significant additional reporting burdens for businesses and would not necessarily change how those businesses use substitution clauses, as I mentioned in my earlier speech. I therefore ask the noble Baroness, Lady Penn, to withdraw Amendment 280.
Baroness Penn (Con)
Before the Minister sits down, could I confirm what I think I heard, that the amendments to the borders and immigration Bill will cover the use of substitute workers and substitute clauses with the extension of right-to-work checks?
Lord Leong (Lab)
I had better clarify this. I said that the amendment to the Border Security, Asylum and Immigration Bill will extend the scope of employers required to carry out right-to-work checks to those who engage limb (b) workers—perhaps one could classify that as those without many rights—or individual sub-contractors, such as those working in the gig economy. Perhaps that answers the question of the noble Baroness.
Baroness Penn (Con)
So not, therefore, the use of substitute workers. That answers my question, but it leaves the issue unaddressed. The challenge before the Government is that they have acknowledged the existence of this problem, with amendments brought to the borders and immigration Bill on Report, but they propose to leave this loophole unaddressed. The powers they are bringing in that Bill will require further consultation and then secondary legislation, and the Minister was not able to put a timeline on that. If this is not addressed by those proposals in that Bill, then when will it be addressed?
Lord Leong (Lab)
I thank the noble Baroness. I stand corrected on that point. The officials have just given me a note that it does cover substitute workers.
Baroness Penn (Con)
Okay. Perhaps it might be good to sit down between now and Report and clarify the exact proposed powers in that Bill. If it does—although the powers are then for secondary legislation and the detail is to be worked through—if the Government are taking the powers to address this loophole and can do it through secondary legislation under that Bill, that is welcome news. The transparency measures proposed in my approach were really an interim measure due to scope and other wider considerations. If we can directly place the obligation to carry out right-to-work checks on those organisations engaging people and their substitutes, then that would be very welcome news indeed. In the meantime, I beg leave to withdraw my amendment.
Baroness Noakes
“Employment Law Advisory Committee(1) There shall be a committee, to be known as the Employment Law Advisory Committee (in this Act referred to as “the Committee”), for the purposes of—(a) giving advice and assistance to the Secretary of State in connection with the Secretary of State’s functions under this Act and any other relevant labour market legislation, and(b) performing such other duties as may be assigned to the Committee under any enactment.(2) The Committee shall consist of no more than 10 members appointed by the Secretary of State and include equal numbers of each of the following—(a) persons appearing to the Secretary of State to represent the interests of workers,(b) persons appearing to the Secretary of State to represent the interests of employers, and(c) persons who have relevant expertise but who do not fall within paragraph (a) or (b).(3) The Chairman of the Committee shall be appointed by the Secretary of State from one of the persons falling within subsection (2)(b).(4) The Secretary of State may by regulations set out matters relevant to the constitution and operation of the Committee.” Member's explanatory statement
This amendment sets up a Committee to advise the Secretary of State on regulations made under this Act and other labour market legislation. It is intended to be similar to the Social Security Advisory Committee which advises the Secretary of State in relation to social security regulations.
Baroness Noakes (Con)
As noble Lords know, this is the final group of amendments, and I must say that I am very flattered that so many noble Lords on the Benches opposite have stayed to hear it.
The inspiration for these amendments is the Social Security Advisory Committee, which has been in existence for over 40 years and has established itself as an impartial and expert committee in the highly complex area surrounding our benefits system. Much of the benefits legislation is set out in secondary legislation.
It is an area marked by highly complex law, which has very important real-world effects for the people affected by the secondary legislation. If the Department of Social Security gets it wrong, people can suffer genuine detriment. The SSAC has been an important underpinning to the parliamentary approval of complex social security secondary legislation, and it gives parliamentary accountability some real substance. Parliamentary accountability is the key driver of these two amendments.
Baroness Penn (Con)
My Lords, given the hour, I will be incredibly brief. My noble friend and I do not always find common cause—even though we are on the same Benches—but this is an extremely sensible amendment, and my noble friend has explained the extent to which she has shaped it in accordance with the Government’s wider thinking in their approach to the Bill. Given the amount in the Bill that is being left to secondary legislation, if I was in the department I would welcome a proposal like this, even if it did not stem from our own proposals and officials. In having this proposed expert committee review the secondary legislation and help the department get it right first time, this is a good example of giving very careful consideration to what it would bring. That can only be welcome, so I add my support to my noble friend’s amendment.
Lord Sharpe of Epsom (Con)
My Lords, I thank my noble friend Lady Noakes for so expertly introducing her amendment, and I welcome the contribution from my noble friend Lady Penn regarding the establishment of an employment law advisory committee.
We believe my noble friend’s amendments would significantly strengthen the framework for effective and balanced labour market regulation. The creation of a dedicated advisory committee, modelled on the Social Security Advisory Committee, seems a prudent and timely measure. It would provide the Secretary of State with expert independent advice that draws from a diverse range of perspectives: employers, workers, and independent experts alike. This inclusive composition is vital to ensuring that any regulations developed under the enacted Bill are well-informed, fair and workable in practice.
Moreover, the proposed committee’s clear statutory function to scrutinise draft regulations before they are laid before Parliament would introduce an important additional layer of oversight and transparency. It would help to ensure that regulations and the views of all relevant stakeholders are carefully considered. The requirement for the Secretary of State to publish the committee’s report alongside any laid regulations, including an explanation when recommendations are not followed, would enhance accountability and public confidence in the regulatory process.
In sum, we think that these amendments represent a balanced and constructive approach to policy-making in the complex area of employment law. They would help guard against rushed or poorly considered regulations, support better policy outcomes and uphold the principles of consultation and transparency that are essential to good governance.
Baroness Jones of Whitchurch (Lab)
My Lords, I thank the noble Baroness, Lady Noakes, for her Amendments 299 and 300. The Government have already committed to consulting on the detail of implementation and have already undertaken extensive engagement with employers, businesses and workers’ representatives, trade unions and experts. We will continue with this approach as we develop our secondary legislation.
There are some specific instances, such as in the enforcement space, where we are proposing setting up an expert group. Upgrading the enforcement of workers’ rights is an important and complex task, where it is right to draw on expertise from businesses, workers and independent representatives.
That is why the Bill requires the Secretary of State to establish an advisory board. It will play a critical role in providing advice and insight to the Secretary of State on their enforcement function under Part 5 of the Bill, which they will in practice deliver through the fair work agency. This is a proportionate and necessary step to help ensure the agency’s effectiveness. But this is not required across the Bill and wider labour market legislation as a whole. The committee proposed by the noble Baroness would be a repetition of the planned engagement and consultation on the Bill. We have already engaged with more than 190 different stakeholder organisations on our Plan to Make Work Pay, including employers of all sizes, from SMEs to large corporations, trade unions and representative organisations representing thousands of businesses and millions of workers.
We have held round-table discussions focused on particular topics, such as zero-hours contracts, and with particular groups, such as leaders of small businesses or retailers. As a Government, we are committed to engaging closely on our plans, and we will continue to do so. This engagement will continue throughout implementation, including as we develop regulations under the Bill.
On parliamentary scrutiny, the Select Committees will of course scrutinise the government proposals and reforms as they are rolled out. The Economic Affairs Committee had an inquiry on the labour market, and the noble Baroness was herself a member of that committee, so we know that there are already bodies in the parliamentary network that can be used to provide that scrutiny. On the basis of our proposed consultation and the parliamentary scrutiny available, I ask the noble Baroness to withdraw her Amendment 299.
Baroness Noakes (Con)
My Lords, I will not detain the Committee for long. With the exception of the expert group, which I was not aware of, I could have written the Minister’s speaking notes myself. They ran along the lines of, “Blah, blah, blah, consultation; blah, blah, blah, Select Committees” and, basically, “We know best”.
My amendment was a genuine attempt to try to enhance the process of parliamentary scrutiny. As I am sure the Minister is aware, Select Committees are simply not set up to deal with the detail of secondary legislation; they are set up to do some things very well—usually broader-ranging topics such as those undertaken by the Economic Affairs Committee of your Lordships’ House—but they never attempt to look at secondary legislation. I can see a lot of secondary legislation coming down the line and the need for a better process and greater information to help Parliament in its job on that.
I am not surprised by the Minister’s response. Before we get to Report, I will consider again what to do with my ideas, which I had hoped would be constructive contributions to the Government’s Bill. I beg leave to withdraw.