Arrangement of Business
The Deputy Chairman of Committees (Lord Geddes) (Con)
My Lords, if, as I am told is probable, there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.
Nuclear Installations (Compensation for Nuclear Damage) (Amendment) Regulations 2025
Lord Wilson of Sedgefield
That the Grand Committee do consider the Nuclear Installations (Compensation for Nuclear Damage) (Amendment) Regulations 2025.
Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)
My Lords, the regulations were laid before the house on 19 May 2025 and the Government have published an Explanatory Memorandum alongside them. This instrument makes technical changes to the way the Convention on Supplementary Compensation for Nuclear Damage, known as the CSC, will operate in the UK upon the UK’s accession to this treaty. These changes streamline the operation of the different conventions as well as the domestic implementing legislation.
Nuclear power is central to this Government’s mission to become a clean energy superpower and a key part of our industrial strategy to revive Britain’s industrial heartlands. It provides clean homegrown energy, creates thousands of jobs and complements other technologies by providing stable and reliable electricity to the grid. To drive forward new nuclear and deliver on our mission, the Government made a series of bold commitments in the recent spending review. A £14.2 billion investment was announced to build Sizewell C, ending years of delay and uncertainty and creating 10,000 jobs. The Government have also pledged over £2.5 billion for the small modular reactor, or SMR, programme over this spending review period. Rolls-Royce SMR has been selected as the preferred bidder to partner with Great British Energy – Nuclear to develop these reactors. Together with Hinkley Point C, these announcements represent the biggest nuclear rollout for a generation, delivering more nuclear to the grid than in the past 50 years.
Participation in nuclear third-party liability, or NTPL, treaties is important for supporting nuclear development while also safeguarding the interests of potential victims in the highly unlikely event of a nuclear incident. NTPL treaties ensure that minimum levels of compensation are available to victims of a nuclear incident, that claims are channelled exclusively to the operator of a nuclear installation, and that claims are channelled to the jurisdiction in which a nuclear incident has occurred.
The UK is currently party to two NTPL treaties: the first is the Paris Convention on Third Party Liability in the Field of Nuclear Energy, which is referred to as the Paris convention; the second is the Brussels Convention Supplementary to the Paris Convention on Third Party Liability in the Field of Nuclear Energy, also known as the Brussels supplementary convention. These two treaties are implemented domestically in the Nuclear Installations Act 1965. The Paris convention sets a minimum operator liability amount of €700 million. An additional €500 million of compensation is available above this to compensate victims in a Brussels convention country, together with a shared international fund of €300 million, made up of contributions from Brussels convention members—again, used to compensate damage in Brussels states.
To remove some potential barriers for investors in the nuclear supply chain, and to support exports, we are now pursuing accession to another NTPL treaty, the Convention on Supplementary Compensation for Nuclear Damage, known as the CSC, which is under the auspices of the International Atomic Energy Agency. The UK is the first Paris convention member to seek to accede to the CSC. Accession to the CSC will expand by 11 the number of countries the UK has NTPL treaty relations with. This expansion will remove some potential barriers to inward investment and support UK exports in the future.
CSC accession will enhance the UK’s attractiveness as a destination for nuclear investment and support the successful delivery of future projects. This is because the mutual respect of the principles of NTPL treaties will apply to more countries. In the highly unlikely event of a nuclear incident, accession to the CSC will also increase the amount of compensation available to victims. The CSC establishes a shared international fund made up from contributions of the contracting parties to compensate victims of a nuclear incident. A country’s contributions are calculated based on installed nuclear capacity and UN contribution rates, expressed in special drawing rights. At present, with the UK as a member, the shared international fund would be approximately £120 million, with the UK’s contribution being £7 million. To date, there have been no calls on this fund.
As we are the first Paris convention country to seek accession to the CSC, there is no established path for countries seeking participation in both conventions—the UK is a pioneer in this respect. To enable CSC accession, provisions were included in the Energy Act 2023 to amend the Nuclear Installations Act 1965, which provides for the UK’s participation in the various NTPL regimes. Our initial approach has been to reflect the minimum national compensation amount required for claims under the CSC at £300 million special drawing rights, or SDRs, equivalent to €370 million, by setting this as the liability limit for operators. This was to come out of operators’ existing financial security provision.
This instrument makes a technical change to the way the CSC will operate in the UK upon accession to the treaty. This technical amendment will align the operator liability limit under the CSC with that of the Paris convention: that is to say, it will create a single first tier of compensation available under both conventions, with a limit of €700 million. This remains within the existing financial security provided by operators, meaning there will be no increase in the liability burden for operators. For sites with lower liability levels, namely low-level sites and intermediate sites, their financial security requirements will also remain unchanged. This approach will simplify the operation of the different conventions and the classification of claims in domestic legislation. It will benefit the administration of funds by ensuring that the CSC shared international fund comes into operation only once the operator financial security limit of €700 million is exhausted. It will continue to ensure that the additional funds available under the Brussels supplementary convention and the CSC go only to those entitled to make a claim under these conventions.
In conclusion, this instrument makes a technical change to the way the CSC will operate in the UK. We continue to work towards CSC accession, which will support the delivery of new nuclear projects and exports, while continuing to safeguard the interests of victims in the highly unlikely event of a nuclear incident. This Government have been clear on our support for nuclear, and these measures contribute to creating the best possible investment climate. I beg to move.
Earl Russell (LD)
My Lords, we very much welcome these changes and we thank the Government for taking a world-leading approach here. The Government seek a resurgence of nuclear power, both large-scale reactors and SMRs, as part of their plan to decarbonise our energy generation and reach net-zero goals. It is absolutely right that the appropriate compensation be available to any potential victims associated with these undertakings.
We welcome this statutory instrument and recognise its critical role in ensuring that a minimum amount of compensation is available to victims in the unlikely event of any nuclear incident. We also strongly support the principle that claims are channelled directly to the operator of the nuclear installation in the country concerned.
These regulations are a small, technical, yet important amendment to the Nuclear Installations Act 1965. Their primary purpose is to implement the Convention on Supplementary Compensation for Nuclear Damage, known as the CSC, within the UK. The move is particularly significant as the UK is a pioneer in this respect, being the first Paris convention member to seek to accede to the CSC.
At the heart of these changes is a simplification and alignment of our nuclear third-party liability regime. Currently, the UK is a party to the Paris convention and the Brussels supplementary convention. This instrument makes a technical change to align the compensation under the CSC with that of the Paris convention. This means that any claims brought under the CSC, or under both the CSC and the Paris convention, will have a cap of €700 million. Critically, this operator liability aligns with CSC claims.
This approach simplifies the operation of the different conventions and the classification of claims in domestic legislation, and will help bring clarity and certainty to the wider industry operating in the UK. It is important to note that this revised liability remains within the existing financial security provided by operators. Importantly, this means no increase in their liability burden. For potential victims, however, accession to the CSC will increase the amount of compensation available through a shared international fund. With the UK as a member, this fund would currently stand at approximately £120 million, with the UK’s contribution being £7 million.
From a broader perspective, participating in nuclear third-party liability treaties such as the CSC is essential for supporting nuclear developments while safeguarding the interests of potential victims. The extension is intended to remove barriers to participation for inward investment and support UK exports, helping to enhance the UK’s attractiveness for inward nuclear investment, thus supporting the successful delivery of planned projects.
If the Minister does not mind, I have two small questions I would like clarification on. First, the Explanatory Memorandum says that the CSC
“would not impose additional liability on nuclear operators”,
but
“there is a risk that the insurance industry may choose to increase operators’ annual insurance premiums as a result of accession. It is unknown how much premiums might increase by, if at all”.
Given the intention behind the instrument, which I welcome, and the plans to build further nuclear power facilities, what measures will the Government take to ensure that the insurance industry does not take advantage of these changes to unduly put up premiums? What methods will the Government use to monitor any increases in insurance premiums that could come into being as a result of this measure?
Finally, I absolutely welcome the fact that the UK Government are doing this but, since they are now in a world-leading space on this, what action, if any, will they take to encourage other nuclear countries to follow the route they have taken? Will any consideration be given to asking other nuclear countries and their companies that are working in the UK to follow these examples in relation to any contracts they may have with us, currently or in the future, as part of their contracting process?
The Earl of Effingham (Con)
My Lords, I thank the Minister for introducing this instrument. As we have heard, it is intended to facilitate the UK’s accession to the Convention on Supplementary Compensation for Nuclear Damage—the CSC—by raising the liability limit for nuclear operators under the regime. Although the change is framed as technical, it raises broader questions that merit further attention.
First, on the process, there appears to have been no formal public consultation on this measure, and although His Majesty’s loyal Opposition recognise that key stakeholders in the industry were consulted, nuclear liability is not just a matter for industry; it is also a matter of deep public interest. We would welcome the Minister’s assurance that the Government will maintain transparency as and when the CSC framework is implemented, particularly in relation to how claims are assessed and public communications are relayed in the event of a nuclear incident.
Lord Wilson of Sedgefield (Lab)
My Lords, I am grateful for the valuable contributions and the insightful questions. As I said, this is a technical issue, so it is only right that it be looked at technically and in detail.
I say to the noble Earl, Lord Effingham, that a formal public consultation was not undertaken for this draft statutory instrument. The amendment is technical in nature and does not introduce new policy, which is why there was no public consultation. However, we have engaged extensively with international partners and key stakeholders throughout the development of the approach. We recognise that there will be many impacts resulting from the changes required by operators and insurers as a result of CSC accession—an issue raised by the noble Earls, Lord Russell and Lord Effingham—so we will work with them in advance of accession to the treaty. I will write to the noble Earls on this more technical point.
I welcome the support of the noble Earl, Lord Russell, for the SMR programme and the changes. We will keep support for our nuclear sector in view all the time. The CSC is important because it includes another 11 countries that can be part of this process and that can be confident in the UK. They will, therefore, help to enhance the supply chain going forward, which is one of the reasons for doing this—other than, obviously, looking after particular incidents that might happen.
Many countries recognise the benefits that establishing a trading relationship can bring for industry, investors and potential victims of nuclear incidents. Contracting parties to the Paris convention are interested in the UK’s approach to CSC implementation as we are the first Paris convention country to seek to do this; we expect other states to be supportive of the UK’s accession to the CSC. Operators have discretion to cover their nuclear liabilities using a range of financial mechanisms. Officials are in regular contact with nuclear operators and insurers through an annual review process of operations arrangements.
To drive forward new nuclear and deliver on our mission, the Government made a series of bold commitments in the recent spending review, including a commitment to Sizewell C and the delivery of SMRs. Key to supporting these projects and our wider ambitions is creating the best possible investment climate for nuclear.
As I have set out, accession to the CSC will expand by 11 the number of countries with which the UK has NTPL treaty relations. This expansion will remove some potential barriers to inward investment and support UK exports in future. CSC accession will enhance the UK’s attractiveness as a destination for nuclear investment and support the successful delivery of future projects. It will also increase the amount of compensation available in the unlikely event of a nuclear incident.
This instrument makes technical changes to the way the CSC will operate in the UK upon accession to the treaty. It aligns the compensation from operators available under the CSC to that of the Paris convention, to which the UK is already a party. This does not increase the liability burden for operators as claims made under the CSC will be met from their existing financial security. It simplifies the operation of the different conventions, ensures that shared international funds are used only once the operator’s liability limit has been exhausted, and continues to ensure that the international funds available under the Brussels supplementary convention and the CSC go only to those entitled to make a claim under those conventions.
Contracts for Difference (Miscellaneous Amendments) (No. 3) Regulations 2025
(1 day, 10 hours ago)
Grand CommitteeRead Hansard Text Read Debate Ministerial Extracts
Lord Wilson of Sedgefield
That the Grand Committee do consider the Contracts for Difference (Miscellaneous Amendments) (No. 3) Regulations 2025.
Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)
My Lords, the Government have committed to achieving clean power by 2030 and the contracts for difference—CfD—scheme will play a key role in achieving that ambition. The clean power action plan, published in December last year, outlined several key reforms to the CfD scheme ahead of allocation round 7 opening this August. Following a robust public consultation process, we published our consultation response, which set out that legislative changes are needed to enable the Government to reach clean power 2030 and enable a fair price for consumers.
The draft SI will enable changes to the allocation process to ensure that our clean power 2030 ambitions are met and that consumers pay a fair price. It amends the Contracts for Difference (Allocation) Regulations 2014 budget publication process and the information that the Secretary of State will have access to during the allocation round. With access to anonymised bids and by changing the budget publication process, the Secretary of State will be able to set budgets for CfDs that maximise good value capacity deployment for clean power 2030 and avoid the outcome seen in allocation round 6, where an unspent budget for fixed-bottom offshore wind meant that a potential opportunity to secure additional projects at a good price was lost.
These amendments mean that the Government can bring forward renewable capacity that represents value for money, which will benefit consumers by moving the country away from volatile fossil fuel prices. The instrument also amends regulations to enable the costs of the clean industry bonus to be included in the Ofgem price cap. There needs to be a specific provision in the relevant regulations that allows the CIB to be counted as a specific bill cost as part of wider CfD costs. This is a technical change; the rest of the CIB regulations are already in place. It will ensure that the price cap captures all the relevant factors that might impact on it.
These draft regulations represent an important step in ensuring that we achieve clean power 2030 and protect bill payers now and into the future. They make the necessary amendments to enable the CfDs to adapt as we head towards clean power 2030. This will enable us to maximise renewables deployment at a fair cost to consumers. I beg to move.
Lord Frost (Con)
My Lords, I declare an interest as an unpaid director of the campaign group Net Zero Watch. I think the Secretary of State for Energy is at the moment giving a Statement in the Commons on the state of the climate and energy in which he promised—or, at least, briefed—that there would be some radical truth telling. It may be useful to do a bit of that ourselves in this discussion. In particular, there are two areas of concern before I come on to the detail of this instrument.
First, the Government’s policy is based on the incorrect belief that renewables are cheaper than gas. There are different figures out there, of course, but independent commentators show that if you include all the subsidy costs, grid balancing costs and capacity market costs, onshore wind is about twice as expensive per megawatt hour as gas, offshore wind is two and a half times as expensive, and floating offshore is three times as expensive. Even solar, which is perhaps the most of viable of any of these renewables, is 50% more expensive. That is the first incorrect belief.
The second incorrect belief is that prices will go down rather than up, which has been very well debated recently. According to data from the International Energy Agency, Britain had, as is well known, the most expensive industrial and domestic energy prices in 2023. The data for 2024, in so far as we have it, shows that we have the most expensive industrial energy prices in Europe, and now only the fourth most expensive domestic energy prices. However, gas prices are about average for Europe, which strongly suggests that, contrary to everything that is said, gas prices are not driving the high costs. In fact, it is the subsidy, the balancing costs, the capacity market and the inflated capital costs—all of which, by the way, the OBR predicts will increase rather than decrease over the next few years. All those are driving higher prices.
The Government have to pretend to believe the things that I just outlined; I do not know whether they really believe them, but they certainly have to pretend to. The problem is that doing so makes it difficult to run a proper renewables policy, and that is why AR6—allocation round 6—was such a fiasco. As the Explanatory Memorandum says, AR6 constituted a
“budget underspend for offshore wind”.
Alternatively put, renewables producers would not supply at the prices that were offered, so there was an underspend. If renewables are as cheap as the Government say they are, why should that be the case?
Therefore, the Government badly need AR7 to be a success. They need this vast expansion of renewables, whatever the cost, if they are to decarbonise by 2030. But developers are getting cold feet; we saw it in AR6, and we have seen the cancellation of projects since then. Hence this statutory instrument is a different approach. It is very complex and obfuscatory, in the way we have come to expect, and there are many technicalities, but the core of it, as various commentators have set out, is that instead of setting a budget and seeing what capacity the Government can get for the money, they are setting a capacity ambition, seeing what bids come in and then seeing what they have to pay to get that capacity. That is why the Secretary of State needs this anonymised data early and why they need to delay publishing the budget until all this has been assessed. The Government hope that no one will notice what is going on if it is done in this technical way in the statutory instrument, but I am afraid it is a scandal, because we will see prices and budgets go up, and we will not get a proper explanation for it.
I have two other points to make on the instrument. The consultation on it, which the Minister referred to and described as “robust”, involved developers, electricity traders—I quote the Explanatory Memorandum—
“businesses operating in the offshore wind sector”
and “environmental groups”. Those, of course, are all producers. What about actual businesses that have to use energy or electricity and have to deal with the increased energy costs and complexity that come as a result? We know what the consequence is and we know why they did not consult them. It is because they know that prices will go up. We know that because, in the industrial strategy announced a couple of weeks ago, the Government have had to pick sectors and subsidise their energy costs to make their operations viable.
My second point is about the security risk of all this. We all saw what happened in Iberia a couple of months ago as a result of excessive reliance on renewables. The Government say that they are investing in nuclear, gas and, to the extent they can, storage, but, of course, none of this will be ready by 2030.
I shall finish with three questions. First, can the Minister tell us how much the Government expect to spend on the AR7 budget? If prices are falling, why will it not be less than AR6? Can he tell us how much consumer prices are expected to fall as a result of the constant fall, as we are supposed to believe, in the cost of renewables? Secondly, if they did not consult consumers of electricity on this SI and the new methodology, can they commit to doing so in future on similar instruments? Thirdly, can the Government tell us how they expect to fill the gap in production that renewables create before the new gas, nuclear and storage come online well after 2030?
Earl Russell (LD)
My Lords, before I turn to the SI, I will respond to a couple of the points the noble Lord, Lord Frost, has made. We shared a Select Committee, so I absolutely respect the noble Lord’s right to say what he wants to say. The noble Lord argued for the need to include all costs, but part of the calculations of using or continuing to use fossil fuels is that we do not continue to account for all the consequences of burning fossil fuels. The OBR has just this week said that that far outweighs any cost that we might spend on renewable energy. Prices are going down: solar and wind are the cheapest forms of energy, and they provide constant energy security. The noble Lord knows that gas sets the market price 96% of the time.
On the regulations, we broadly welcome this plan to bolster our nation’s energy security and accelerate the transition to clean power. We commend the Government on their intention further to update and reinforce the contracts for difference process that has been the backbone of our nation’s renewable energy transition. These draft Contracts for Difference (Miscellaneous Amendments) (No. 3) Regulations 2025 represent an important update intend to fine-tune the CfD process to bring about a more efficient use of budgets, improve the bid management process and consider extra support for the UK industry.
We particularly welcome the continued focus on boosting our domestic industry through the clean industry bonus, CIB, referred to in these regulations as the “sustainable industry reward”. The first round of the CIB was a success, more than doubling its budget from £200 million to £544 million and leveraging up to £9 billion of investment in UK supply chains.
I agree with the Government: this is an unprecedented amount earmarked for UK factories and ports, particularly in our country’s poorest areas, fostering jobs and growth through the supply chains. We also support the intention for these costs to be accurately included in the Ofgem price cap, as these regulations ensure, which aids future transparency and fair accounting.
The regulations make three main changes. First, they amend the contract budget notice publication process for price and pot notices and the final contract budget notice signing within the allocation framework. Secondly, they amend the information that the Secretary of State has access to. The Secretary of State now gains access to anonymised strike price bids at any time, supported by an estimated budget to improve budget management and help prevent underspend. Finally, they include clean industry bonus payments in the Low Carbon Contracts Company’s calculations.
We generally welcome the spirit behind these notifications. I have some questions for the Minister. The first seeks to ensure that we get value for money and consumer costs. The changes will allow the budgets to be set at a price that balances value for the consumer with the development ambitions. However, given the significant investment involved—allocation round six was a record-breaking £1.5 billion for 127 projects generating 7.2 gigawatts, and AR7 is due to be even larger—how will Ministers ensure that the new-found flexibility generally translates into lower strike prices for offshore wind and ultimately lower costs for consumers? How can we be certain that value for money is not sacrificed in the rush to pursue record capacity?
Turning to competitive tensions and the risk of bid inflation, while the Government intend to review anonymised bid information and maintain anonymity, there is a risk that bidders might aim to obscure true costs and competitive tensions could be perceived as lacking, potentially leading to higher clearing prices, especially if there is a perception of an unlimited budget for AR7. Will the Government clarify what controls there are on the powers to mitigate any possible negative impacts from these changes?
Finally, turning to monitoring, evaluation and swift course correction, the Explanatory Memorandum details plans and processes for evaluations, robust monitoring and a post-implementation review five years after these changes take place. Five years is a long time in a rapidly evolving marketplace. I ask the Minister for reassurance about the specifics on the key performance indicators that will be rigorously tracked to assess the effectiveness of these legislative changes after each allocation round. How will any insights from each round and their implications lead to changes in processes before the next round?
We need to be careful that we do not get any market distortions from these regulations. I do not think that will be the case, but there is a need within the evaluation process to check that that is not happening.
We support the ambition to make Britain a clean energy superpower. This will help bring down bills, provide energy security, green jobs and growth and help get us off the rollercoaster of dependence on international gas markets. The Government need to bring forward proposals to lower energy bills, although that sits outside this SI. I simply seek reassurance on the points I have raised with the Minister.
The Earl of Effingham (Con)
My Lords, I thank the Minister for setting out the purpose of this instrument. These regulations make what may be described as technical adjustments to the CfD regime. However, in practice, they signal significant changes to the principles that underpin the scheme’s operation: transparency, predictability and fairness. The CfD mechanism has been a cornerstone of our low-carbon transition, driving record levels of renewable deployment, while securing value for consumers. That credibility depends on its rules being clear, impartial and competitively neutral.
This instrument makes three changes that in His Majesty’s loyal Opposition’s view merit particular scrutiny. First, as highlighted by my noble friend Lord Frost, it allows the Secretary of State to view anonymised bid data before finalising the budget for an allocation round. This breaks the long-standing principle that all participants bid on a level playing field based on pre-published terms. Ministerial discretion inserted into the process after seeing how the market has responded risks undermining confidence in the integrity of the auction.
Secondly, as also flagged by my noble friend Lord Frost, by delaying the publication of the final budget until after that review, the Government will have the ability to shape outcomes post hoc. However well-intentioned, that is potentially a slippery slope. It introduces uncertainty, opens the doors to perceived political interference and may ultimately deter long-term investors who value predictable rules-based frameworks.
Thirdly, the decision to reclassify the costs of the sustainable industry reward so that they are now recovered through Ofgem’s price cap means that these costs will be passed directly on to consumers. At a time when the cost of living is rising and households are under pressure, the perception is that a stealth measure introduced without full parliamentary scrutiny or a fully transparent impact assessment should not be made. What safeguards will be put in place to ensure that this new discretion over budgets does not distort the process or erode trust among participants? Has the department undertaken any modelling of how these changes might affect bidding behaviour, strike prices or project delivery timelines? What assurances can be given to consumers that the inclusion of new costs in the price cap calculation will not place additional upward pressure on their energy bills?
In conclusion, although these changes may be framed as flexible and technical, they represent a shift in the balance of power from an impartial auction model to one in which Ministers can influence the outcome after bids have been seen. That raises fundamental questions about fairness, efficiency and consumer protection. We urge the Minister to explain why such discretion is necessary and how its use will be accountable to Parliament.
Lord Wilson of Sedgefield (Lab)
My Lords, I thank noble Lords again for a good debate, with some incisive observations made by noble Lords opposite. This Government are steadfastly committed to deploying renewables in order to achieve our ambition for clean power by 2030 and to protect bill payers both now and in future. The instrument under discussion today will enable us to adapt CfDs so that they can support the delivery of our ambition for clean power by 2030 at the lowest cost to consumers.
Having said that, let me respond to the questions posed by the noble Lord, Lord Frost. In an unstable world, the only ways both to guarantee our energy security and to protect bill payers permanently are to keep energy bills down for good and to speed up the transition away from fossil fuels towards home-grown, clean energy. During periods when wholesale electricity prices are higher than the fixed CfD strike price awarded, generators pay the difference back into the scheme, which can help reduce energy bills. This happened when wholesale electricity prices spiked during the energy bill crisis of 2022-23; over that winter, CfD payments reduced the amount needed to fund government energy support schemes by around £18 for a typical household. The budget underspend that has been referred to is a result of the allocation—
Lord Wilson of Sedgefield (Lab)
To continue with my response to the noble Lord, Lord Frost, on the budget underspend referred to as a result of the allocation round process, budgets had previously been set without knowing how much capacity can be procured, creating uncertainty around the renewables capacity and the price at which it can be secured. These reforms respond to that challenge. The parameters for allocation round 7 will be published in the coming weeks. As part of our consultation process, we engaged with consumer groups to ensure we obtained a wide range of views on the impact of these changes.
The noble Lord mentioned that the Secretary of State is giving a Statement today. I also draw the noble Lord’s attention to a speech the Secretary of State gave at the recent Global Offshore Wind conference, where he noted the importance of securing fair prices for consumers through AR7 and beyond.
To answer the points from the noble Earl, Lord Russell, to ensure value for money, we have consulted on several reforms for AR7 so that competitive tension is maintained. The response to this consultation will be published soon. We will also publish our auction parameters in the coming weeks, which will aim to ensure consumers get the most value from this round. We will review the specific policy after the conclusion of AR7 and inform stakeholders of our use of these powers for future allocation rounds.
In answer to the noble Earl, Lord Effingham, key parameters such delivery years and strike prices will be published before the opening of the allocation round. Developers will still have the key information they need to submit their minimum viable bid. We will be publishing how we intend to use these powers for AR7 in the forthcoming government response, alongside other measures to drive value for money.
The playing field remains level. The auction will remain entirely impartial, and bids seen will be entirely anonymous. This allows current powers to revise the budget to be used in a targeted and careful manner, with specific consideration given to the cost to consumers.
On the noble Earl’s point about transparency, this proposal has been subject to a full consultation in which the Government engaged with consumer groups, developers and other key stakeholders. We also published our impact assessment for these regulations in May alongside our response. The key considerations for the CfD are set out in the Energy Act. They will still be to ensure that costs to consumers are minimised, that we have security of supply and that we decarbonise the electricity system.
The draft regulations before the Committee today will enable the Government to achieve clean power by 2030 at a fair cost to consumers.
Transport Act 2000 (Air Traffic Services) (Prescribed Terms) Regulations 2025
(1 day, 10 hours ago)
Grand CommitteeRead Hansard Text Read Debate Ministerial Extracts
Lord Hendy of Richmond Hill
That the Grand Committee do consider the Transport Act 2000 (Air Traffic Services) (Prescribed Terms) Regulations 2025.
Relevant document: 28th Report from the Secondary Legislation Scrutiny Committee
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
My Lords, the UK’s airspace is a vital piece of our national infrastructure that is essential to economic growth, connectivity and national resilience. Last year, there were more than 2.4 million flights using UK airspace, but despite a significant rise in air traffic demand, the structure of our airspace has remained largely unchanged since the 1950s, when there were around 200,000 flights a year. This means that today’s flight paths remain largely based on a system that relies on a network of outdated ground-based navigation beacons. As a result, aircraft today fly less efficient routes and are unable to take advantage of modern aircraft technology and performance. This leads to increased fuel consumption, a greater risk of delays and, as a result, higher carbon emissions. The National Air Traffic Service—NATS—has estimated that, without modernisation, by 2040 one in five flights could face delays of more than 45 minutes.
A plan to fix this has been set out by the Department for Transport and the Civil Aviation Authority—the CAA—in the form of the airspace modernisation strategy. The regulations being considered today are one part of enabling that plan to happen. Modernised airspace will enable greater capacity in the air, improve resilience to disruption and help UK aviation to achieve net-zero greenhouse gas emissions by 2050.
The draft regulations will be made under powers conferred by the Transport Act 2000. Under that Act, the Secretary of State may modify prescribed terms in an air traffic services licence. This instrument designates as prescribed any term specifying air traffic services authorised under a licence and any term specifying the area in which those services may be provided. In practice, this will allow the Secretary of State to modify the terms in the air traffic services licence granted to NATS (En Route) plc, known as NERL, in order to create and fund a new UK airspace design service, or UKADS for short.
The airspace modernisation strategy is a long-term plan designed to ensure UK airspace remains safe, efficient and capable of meeting future demands. It includes changes to flight paths to enable better use of the UK’s airspace.
The approach adopted in the UK until now has seen individual sponsors—usually airports—design and progress their own proposals for airspace change through the CAA’s CAP1616 airspace change process. This approach recognises the crucial role that airports play in airspace design, but also creates fragmentation and delay, particularly when multiple airports have overlapping airspace designs and competing priorities. This is especially an issue around London, which currently has 11 airports in the programme and some of the most complex airspace in the world.
Lord Kirkhope of Harrogate (Con)
My Lords, in the new spirit in the House of declarations of interests, I declare mine at the outset. I do so as a private pilot, a former director of Newcastle airport and the author of an investigation into lower airspace, which was brought about at the request of the then Transport Secretary Sir Grant Shapps. It was primarily to do with lower airspace, but it highlighted a number of things.
I will not speak for long, but I want to ask the Minister a few questions. I welcome very much what is being proposed, but I wonder to what extent it can be delivered. It is extremely complicated because it deals with a very complicated situation in relation not only to lower airspace but to upper airspace, the whole area of control zones around airports and the historic position of airports themselves as sponsors of changes to airspace. This has always been an area of great concern, particularly to general aviation, which is rather more random in its representation. Unlike the airports—which have their own clear bodies to represent them and the institution—airlines and others, general aviation is a bit more haphazard and therefore in need of protection, if I may put it that way, from government.
These proposed changes have enormous implications for those involved in general aviation—and business aviation too—first, by removing individual effort and the sponsors that exist currently, particularly the airports themselves. I hope that there will be sufficient objectivity in the decisions that are taken to maintain GA’s position in any redesign mechanism. There have been concerns over the years that, because of the sponsorship by airports and their own determination to hold on to airspace and control zones for their own commercial benefit as well as—they claim—for safety and security, we have seen a diminution in parts of the country of the convenience and ability of general aviation to operate.
The south-east of England is a classic case. I am lucky in that I fly mostly in the north and in Scotland, where we do not have control zones for much of the territory. This makes it a much freer situation for GA, and that is very helpful. I note that there is to be an initial stage—if you like—of these processes, which will concentrate on the London area. I hope, therefore, that the views and feelings of GA will be fully taken into account in the redesign that might take place.
Secondly, it seems to me, and one of the criticisms has been, that, “What we have, we hold”, appeared to be the attitude of a lot of those who sponsored airspace controls. Very rarely do people seem to want to give up anything. Changes in technology, which are referred to in the Explanatory Memorandum and have been dramatic over the last few years, seem to suggest that some airports currently have airspace controls that are unnecessary and could be yielded up for use by general aviation, certainly in terms of routing and so on. I would like to know whether there will be sufficient protection for them.
Thirdly, on the question of airports, the initial stages of proposals from the airports produced a rather mixed outcome. Some airports appeared to be quick off the mark and willing to take part in a modernisation proposal; others seemed more reluctant. Therefore, I wonder to what extent these proposals will be able to go ahead in a way that produces something comprehensive, rather than, as we currently have, a bit of a mishmash of circumstances. It is awfully important that all these elements are brought together—and with the support of the various people who have been involved so far in sponsoring and directing these events. Will the Minister comment further on that?
Finally, on the timescale, we have been doing this for quite a long time. This measure is welcome but we were making progress way back before we had the Covid situation. Unfortunately, things seem to have become rather slow. That is inevitable, I suppose, but I would like to see some kind of clear timescale so that we can bring matters to a head and finalise a comprehensive scheme to which all parties are signed up.
Baroness Pidgeon (LD)
In many ways, it is quite extraordinary that no single organisation in the UK is currently responsible for creating a modern and integrated airspace design. As we have heard, across the country, airspace change proposals are sponsored by individual bodies—usually airports or air navigation service providers—and, in more congested areas, such as London, there are multiple overlapping ACPs, each with a separate sponsor.
Aviation law is governed by an international system of rules set by the International Civil Aviation Organization. In many ICAO contracting states there is one entity, usually a public body, responsible for airspace planning and design; that same body is also responsible for air traffic services and air navigation. This clearly makes it much easier to deliver airspace change that benefits the whole state’s airspace than is currently possible in the UK.
We therefore welcome this SI, which changes licensing rules to allow a single new UK airspace design service to be created and to oversee both airspace modernisation and changes to use of airspace. We welcome steps to better co-ordinate a disjointed system of managing airspace but, of course, we will hold the Government to account to ensure that modernisation works for all our communities and for our environment. It is important to bring airspace into the 21st century, to deliver flight paths that cut emissions and to ensure that journeys are quicker, quieter and cleaner. However, with any changes there will be winners and losers. The Government must recognise this and work with communities as airspace is modernised—not least in congested areas, such as London.
We must also ensure that airspace modernisation reflects the needs of our communities, recognising the impact that noise and air pollution can have on people and on nature. I think in particular of residents in Richmond and other west London boroughs who suffer greatly because of flights relating to Heathrow and are fearful of any changes. I ask the Minister: how do the Government plan to ensure that the new UK airspace design service works openly and transparently with communities that are impacted by aviation, genuinely engages and consults, and is a trusted, independent voice in this area, because there is a lot of suspicion in many communities? Also, will this new organisation be subject to freedom of information legislation?
Baroness Pidgeon (LD)
My final question, before I was interrupted by the Division Bell, was: what is the timescale for the development of this new service and its first project tackling the complex London airspace?
Lord Moylan (Con)
My Lords, in general we welcome this statutory instrument. We welcome the prospect of a more rational organisation of airspace—who could do otherwise? However, there are considerable problems and the Minister needs probing on some of them. I am grateful to my noble friend Lady Foster of Oxton, who is not in her place because she is detained on a train that has been diverted and which has delayed her. She would have been here; as noble Lords will know, during her many years in the European Parliament, she worked on all the Single European Sky legislation. She has supplied me with some questions, and some of my speech has been helped by her: I want to acknowledge that, because that has been very useful.
The first question has to go to cost. How much extra will the airlines have to pay, over and above their current payments for air traffic control services? They are going to be recharged for this. Is it going to be a smooth sum, or will it be lumpy and go up and down as costs are incurred? The Minister says it will be small and that, indeed, they may save money in the long term, once it is all done. However, there are so many things that the Government say are going to be small and will save you money in the long term, but they never do. So can he be more precise than simply saying “small” and give us a better clue of how much it will be, perhaps as a percentage of what they currently pay?
Another question has to do with the timescale for achieving this; here, I refer to the comments of the noble Baroness, Lady Pidgeon. It looks as though it will take years, not simply because of complexity—we grant that the work will be complex—but also, if one looks at page 5 of the Explanatory Notes that accompany the statutory instrument and the number of stages that have to be gone through to achieve a CAA decision on airspace change, it could take many years to do the work. Can the noble Lord give an estimate of how long it might be before, even for the London area, we see these changes brought into effect?
Returning to the charges for a moment, will foreign carriers that enter UK airspace be asked to pay towards this? If so, how will they be charged? Then there is the big question of how these changes are going to be integrated with neighbouring airspace and air traffic control arrangements, particularly the Single European Sky arrangements. Do they need to be, perhaps because they are en route? It might be that they are wholly within domestic airspace and that integration is therefore not needed, but some words from the Minister on that when he comes to reply would be helpful.
There is another question, about skills. I do not doubt for a moment that many of the people involved in airspace planning in the UK are very skilful, but UK Research and Innovation’s Future Flight Challenge said:
“The skills and knowledge needed for the airspace designers for any ACPs associated with enabling new airspace users will likely be different to the airport based changes”
to which we are accustomed. Where are the skills going to come from? Can we be guaranteed that we will have the right skills and the right people in place to do this work in a timely fashion?
Next, I want to build on some remarks made by my noble friend Lord Kirkhope of Harrogate, who referred to general aviation and smaller airports—he did not refer to smaller airports explicitly, but I shall. With this new all-singing, all-dancing, powerful body that will set these new rules for flights, it will be very easy to ignore the particular needs of smaller airports. I note that, in the consultation so far, there have been some very worried remarks from airports such as Biggin Hill and Farnborough about how their interests are going to be looked after as this work proceeds. Again, some consolation from the Minister would be very helpful.
Finally, I come to the public. Any change in flight paths can have a devastating effect on communities that live under those flight paths, particularly if they are close to an airport. The question of public engagement by NERL as it proceeds with this work is going to be crucial to its successful implementation. I would like to hear the noble Lord say that that there will be a plan from the outset for transparent public engagement on the proposed changes, and the possible changes, so that communities, local authorities and their representatives can be fully engaged. He may say that this could make it difficult to get the work done, but my view is that we have a choice: either we tackle this problem early on and hope to deal with it as we proceed, or we proceed in relative silence, with a lack of transparency, and run into a massive problem at the end, a problem that might, in various locations, be so powerful that it results in making the changes politically unimplementable. I would like to hear about the public engagement strategy, because of the powerful effect that these changes might have on local communities; otherwise, if the Government can pull this off, it will take many years and it will improve things, but there is a great danger, in my view, of it all going horribly wrong somewhere along the line.
Lord Hendy of Richmond Hill (Lab)
My Lords, I thank all noble Lords for their consideration of these draft regulations. I will now attempt to respond to the specific points raised.
I was pleased to hear the noble Lord, Lord Kirkhope of Harrogate, welcome these proposals. He referred to general aviation, as did the noble Lord, Lord Moylan. We recognise the key role of general aviation and the value that it brings, both economically and as a pipeline for people to learn to fly. The UKADS will take account of the needs and views of general aviation as it develops its designs. Of course, London has some of the most complex airspace in the world, and the UKADS will provide the guiding mind to help deliver modernisation in this very complex area.
Lord Moylan (Con)
The question about timescale was not about when the work would begin; rather, it was, I think, about when it was likely to result in some fruit.
Lord Hendy of Richmond Hill (Lab)
I thank the noble Lord for his intervention. I will write further on what we can say about the projected timescales of conclusion. It is enough to note for now that this work is extraordinarily complex, particularly since we are seeking to address the airspace around London, which is one of the world’s most congested spaces. I will write to all noble Lords on what we currently envisage the timescales of this to be, so far as we can estimate them.
I was delighted to hear that the noble Baroness, Lady Pidgeon, also welcomes this statutory instrument. In respect of local communities, which are clearly very important, aircraft noise is a considerable issue in some communities. I should declare my interest in that I live in Richmond, so I am familiar with the circumstances of this—although I have got used to it, as I did when I lived in Hayes and Ealing when I was growing up.
The first thing to say is that modernisation is expected to benefit those who use and are affected by UK airspace, including residents living near airports. The UK ADS will progress airspace change proposals through the CAA’s CAP1616 airspace change process, as current sponsors do now. This includes requirements to engage with local communities and to factor in environmental considerations. Airports will continue to play an important role in strengthening community relationships by working in partnership with the UK ADS to deliver consultations and to ensure that local voices are meaningfully represented. The CAA and the department expect, by the September of this year, to consult on a package of changes that will make the process for airspace design decisions more proportionate. People affected by airspace change will continue to have a say and any changes will retain the important principles of a transparent, evidence-based process.
Airspace modernisation is expected to result in a further reduction in the average noise levels per flight, as aircraft climbs and descents could become quicker and quieter with route changes that better utilise the capabilities of modern aircraft. Modern technology and navigation systems also make it possible to set much more accurate flight paths, which navigate more accurately around population centres. However, noise impacts will also depend on other factors, such as planning decisions, traffic growth or airline route choices. Airports will still be expected to develop and implement robust noise action plans, which will be subject to oversight and review by my department and the Civil Aviation Authority.
The noble Baroness, Lady Pidgeon, asked whether the new body could be subject to freedom of information requirements. It will be a body in private hands, but the Civil Aviation Authority and the Department for Transport will be subject to FoI requests. She, too, asked about the timescale. I have already said that I will write to noble Lords to make an initial foray into that area.
On the questions raised by the noble Lord, Lord Moylan, and the nature of the charges, in November 2024, the Civil Aviation Authority set out illustrative costs of approximately £20 million per annum. This is broadly equivalent to approximately 2% of the 2024 UK en-route charges paid by airlines—for illustrative purposes, this is approximately £7 per flight or 5p per passenger. The CAA has taken into account feedback received and is currently consulting on detailed proposals for the new charge, with final charges depending on the chosen regulatory model and actual service costs.
The noble Lord asked whether charges will be paid by foreign airlines: they will. They will pay through the existing industry mechanisms, the same as the en-route rate paid for services today. He asked about skills. This is a challenge around the world. UKADS and NERL have skills and facilities in house. We will maintain what we have, and by creating a new guiding mind, we will enable better use of the skills and experience we already have in house. I will write to the noble Lord further about integration with the European system.
I believe I have answered all the points that have been raised, but if there are any further points, I shall be happy to write to noble Lords.
Without these regulations we will not be able to establish the UK Airspace Design Service and deliver the benefits that airspace modernisation can bring. Those measures will help us deliver fewer delays for passengers and quicker, quieter and cleaner flights over the UK. This will lead straight into the Government’s commitment to innovation, sustainability and economic growth. I hope noble Lords will join me in supporting these measures.
Deaths of Members
The Lord Speaker (Lord McFall of Alcluith)
My Lords, I regret to inform the House of the deaths of the noble Lord, Lord Blair of Boughton, on Wednesday 9 July and the noble Lord, Lord Marlesford, yesterday. On behalf of the House, I extend our condolences to the families and friends of the noble Lords.
Tax on Imports under £135
(1 day, 10 hours ago)
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Lord Leigh of Hurley
To ask His Majesty’s Government whether they plan to take action to tax imported goods worth below the £135 threshold for value added tax.
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
My Lords, VAT is already due on all imports into the UK. The Government are reviewing the customs arrangements for imports under £135 and are exploring the merits of reform to the online marketplace rules.
Lord Leigh of Hurley (Con)
My Lords, I am glad the Government are reviewing it; as the Minister is aware, the noble Lord, Lord Lucas, RAVAS, the British Retail Consortium and many others have been campaigning on this issue for many years. Now that President Trump is reducing the exemption tariff for goods into the US, there will be extra pressure on Chinese suppliers to send goods VAT and duty-free to the UK. I understand that the EU is minded to reduce the exemption to zero in 2028. Can we be assured that the United Kingdom will not wait for the EU in reducing our exemption to zero?
Lord Livermore (Lab)
I am grateful to the noble Lord for his question. Just to be clear, again, VAT is already due on all imports of goods into the UK, regardless of their value. Since 2021, VAT on imports below £135 is collected at the point of sale. There is some evidence of non-compliance, so the Government announced in April that we will review the online marketplace rules. We are engaging with stakeholders to understand the impact of any potential changes. On customs duty, given the concerns of domestic retailers about the lack of a level playing field, we have also announced a review of those arrangements. Since the Government announced the review in April, both Ministers and officials have engaged with a wide range of stakeholders on the impact and operation of the regime. The findings from that engagement will help determine the review’s next steps.
Baroness Kramer (LD)
My Lords, I will row in behind the noble Lord, Lord Leigh, on this issue. Could we get a slightly more satisfactory answer on why it is taking so long to find a solution so that the UK can collect the VAT that is due on small items? Will the Minister remember not just that we need the money for tax revenue but that the lack of a level playing field disadvantages British companies in this arena, which find that their goods are displaced by imports because they are not paying VAT?
Lord Livermore (Lab)
We fully recognise all the issues that the noble Baroness has set out, which is exactly why we established a review in April. That review will look at the online marketplace rules to establish whether they can be amended to remove opportunities for businesses to avoid their VAT obligations. All available options will be considered, and it will proceed in the way that we set out.
Lord Anderson of Swansea (Lab)
Further to the question from the noble Lord, how concerned are the Government that, as a result of the Trump tariffs, Chinese goods will be diverted to our market to our detriment?
Lord Livermore (Lab)
The Department for Business and Trade has set out our measures to try and prevent that from happening, and it will continue to monitor it, as you would expect it to.
Lord Bridges of Headley (Con)
My Lords, broadening the topic on taxation a little, at the weekend the Transport Secretary said that in Labour’s manifesto it committed not to put up taxes on people on modest incomes. Can the noble Lord tell us the Treasury’s definition of a modest income?
Lord Livermore (Lab)
The Government have pledged not to increase taxes on working people, which is why we are not increasing income tax, national insurance contributions or VAT.
Lord Sikka (Lab)
Can I help the Minister on how to collect a lot more in tax revenues by attacking the anomalies? By taxing capital gains and dividends at the same rate as wages, and by charging national insurance at the same rate, the Government could collect around £15 billion a year. Another £14.5 billion could be raised by restricting tax relief on pension contributions to basic rate only. Can the Minister explain why the Government have not tackled anomalies that favour the wealthy?
Lord Livermore (Lab)
I am always grateful to my noble friend for his Budget representations. He knows that I am not going to get into speculation about the next Budget and that, in terms of what we have done so far to tackle the tax gap, the Government announced the most ambitious package ever to close it, raising £6.5 billion of revenue in terms of the Budget. In the Spring Statement, the Government announced further measures which will raise over £1 billion in additional tax.
Baroness Neville-Rolfe (Con)
My Lords, to go back to the Question, foreign firms exporting to the UK are making increasing use of the current arrangements. As a result, domestic producers are disadvantaged and the Treasury is forgoing what could be a substantial amount of tax revenue. Given the concerns expressed across the House, does the Minister agree that the time has arrived to deal with this anomaly, and to do so as a matter of urgency? Has the Minister discussed options with the businesses affected in the UK, and when will the review that he talked about conclude? We would all like to see the conclusion of this debate so that our retailers are not adversely affected.
Lord Livermore (Lab)
I agree with almost everything that the noble Baroness said, but she failed to point out that it was her Government that established the existing system and it is this Government who are reviewing it with the intention of changing it. I agree with all the criticisms that she puts forward, but they are criticisms of her own Government. As I say, we have set out a review, and officials are currently engaging with stakeholders to understand the impact of any reforms and have so far held multiple round tables covering some 70 businesses. All available options will be considered, and we will come forward when we have concluded the review.
Lord Watts (Lab)
My Lords, can the Minister tell us how long this has been a problem, and whether anyone attempted to resolve it over the past 15 years? Can he say whether this is another case in which this Government have failed to put right 14 years of Tory mismanagement?
Lord Livermore (Lab)
It is not quite 14 years, I think; these rules came in in 2021. The previous Government prioritised trade facilitation in the aftermath of Brexit and, since 2021, VAT on imports below £135 is collected at the point of sale to prevent congestion at the border. However, this has opened up some opportunities for the rules not to be followed. We recognise that and have established a review, which the previous Government did not.
Lord Kirkhope of Harrogate (Con)
My Lords, this imprecision is not helping. In answer to my noble friend Lord Bridges and the noble Lord, Lord Sikka, there was an attempt by the Minister to indicate what modest incomes were. However, equally confusing and rather upsetting is the Government’s inability to define what exactly they mean when they talk about “wealthy people”. Can he be a little more precise and helpful to us?
Lord Livermore (Lab)
The noble Lord is very kind in trying to get me to speculate on the Budget, but that is something that I am not going to do. I will not be giving a running commentary on the fiscal forecast, nor will I be speculating on the next Budget now. The Government have pledged not to increase taxes on working people, which is why we are not increasing income tax, national insurance contributions or VAT.
Lord Vaizey of Didcot (Con)
My Lords, the last Government removed the VAT exemption for tourists—the ability to reclaim VAT—which hit a lot of retailers and crafts companies based in the UK. The unique campaign to get that tax removed united people like the Scottish National Party with the Labour Party. Is that now a done deal? Will the tourist tax remain in place, or will the Government ever review it in terms of attracting international visitors?
Lord Livermore (Lab)
Again, I am very happy to take that as a Budget representation. As the noble Lord knows, we keep all taxes under review, but I will not be speculating on the next Budget.
Lord Brooke of Alverthorpe (Lab)
My Lords, the Government have very wisely produced a number of 10-year strategic plans for the country, which have generally been welcome. The one area where we have not done any serious work is on taxation, and the fact is that both the wealthy and less wealthy are going to have to pay more money in the future to deliver these strategies. On VAT, there is a good deal of opportunity for flexibility, and the Minister has indicated that a review is taking place. Could that not be widened to see how far VAT could be extended to raise additional funds? Beyond that, could we not think about a review for a 10-year strategy on taxation for the country? We might try and bring in the Opposition to get them involved with it, too.
Lord Livermore (Lab)
I know this is something that is close to my noble friend’s heart, and he has made those points to me several times. As I have said before, I am happy to take that as a Budget representation, but I am not going to speculate on the next Budget now.
Lord Forsyth of Drumlean (Con)
My Lords, would the Minister just like to confirm that, when he talks about working people, he means self-employed people and anyone with a payslip?
Lord Livermore (Lab)
I think that is a fair definition of that phrase, yes.
Lord Hintze (Con)
My Lords, I have a question to the Minister: why are we always talking about taxation and not being more efficient with our spending?
Lord Livermore (Lab)
We have just completed a zero-based review of the whole of government spending. If the noble Lord has areas of spending that he would like to cut, I am very happy to hear them.
Rail Freight
(1 day, 10 hours ago)
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Lord Snape
To ask His Majesty’s Government what plans they have to meet the target of increasing rail freight by 75 per cent by 2050.
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
My Lords, the Government are committed to supporting rail freight growth, recognising its significant economic and environmental potential and its critical role in the UK’s resilience. In the last year, rail freight volumes have increased by 5%. We will support further growth through a statutory duty on Great British Railways to promote the use of rail freight, and the Secretary of State will set a rail freight growth target. My officials are working through the details of the design of that target.
Lord Snape (Lab)
My Lords, I am grateful to the Minister for that response, but, while welcoming the 5% increase in rail freight over the past year, we are still a long way from the 70% which was promised in the Labour Party’s last election manifesto and which is still, as far as I am aware, party policy. Does he think the move towards that happy situation will be enhanced by the current financial regime, which means that rail freight pays every year in access charges a basic rate plus RPI, while the road haulage industry has benefited enormously from the near 14-year freeze on the fuel tax regulator? If we are subsidising any mode of transport, have we not got it the wrong way round?
Lord Hendy of Richmond Hill (Lab)
Taxation, as my noble friend well knows, is a matter for His Majesty’s Treasury, so I will not comment further on that. Access charges paid by freight for utilising the network do not currently cover the full fixed cost of operations, maintenance and renewal required. The capping arrangements which will be in place until March 2029 will save freight operators an estimated £33 million over this five-year control period. There are already schemes to discount access charges for new traffic, such as the mode shift revenue support scheme and Network Rail’s access charge discount policy. In the future, GBR will have greater flexibility to offer discounted charges.
Baroness Pidgeon (LD)
My Lords, as part of the Government’s work, will they assess the role that lorry trailers on rail between key points in the UK and Europe could play in increasing rail freight and reducing the wear and tear on our major highways from heavy axle weights?
Lord Hendy of Richmond Hill (Lab)
The noble Baroness may know that, actually, that is not a new scheme. In respect of rail freight to Europe, the Government clearly have an interest in promoting it. The Channel Tunnel has plenty of spare capacity, as does HS1. In respect of carrying lorries by rail in the UK, that has been tried before. I think it is up to the private sector freight market to develop its own flows, but the Government are there to help with access and access charges in order to get that traffic on the railway.
Lord Grayling (Con)
My Lords, I refer to my entry in the register as an adviser to Hutchison Ports. I looked carefully through last week’s announcement. I could not see anything in the Government’s plans that would deal with the bottlenecks in the system that prevent rail freight growth. Can the Minister enlighten us as to when those might be addressed?
Lord Hendy of Richmond Hill (Lab)
The noble Lord has, of course, some background in this subject, but the Government in his time were unable to invest significantly in increased access for freight, and the fiscal position has not allowed as much investment in that area as the Government would clearly like in unconstrained circumstances. Nevertheless, there are investments to be made now in the network which have been announced, such as the investments in the TransPennine upgrade and in East West Rail, which will facilitate more rail freight.
Baroness Jones of Moulsecoomb (GP)
My Lords, could we not repurpose other railways to carry more freight, because getting freight off the roads is absolutely urgent, especially in view of the climate crisis? What about repurposing HS2, when it is finished, for only freight?
Lord Hendy of Richmond Hill (Lab)
I think the first thing we need to do with HS2 is to finish it so it is a railway. This Government are working very hard to do that, as was set out in the recent announcement. When HS2 is finished, it will release capacity on the west coast main line, at least south of Birmingham, and that capacity can be used for two purposes. One is for additional passenger trains, which will enable significant growth in services, and therefore more housing development, in places such as Milton Keynes and Bletchley, and the other is to use it for more freight traffic. That is what will happen when HS2 opens.
Lord Moylan (Con)
My Lords, the Minister says that there is going to be a new use and access statement from Great British Railways, when it is established, in relation to freight, getting access to the tracks and how much people will have to pay to use them, but when is that going to be? The whole of Great British Railways is still a long way off. The Bill is nowhere. The whole process seems to be stalled. In the meantime, how can he expect the freight industry to invest and plan when it has no idea what access it is going to have to the tracks in this new regime or what it is going to have to pay for them?
Lord Hendy of Richmond Hill (Lab)
I have met the freight operators, both individually and collectively—indeed, I have met most of their shareholders—in the last six months. My current belief is that they have a very clear understanding of how the access and use policy will develop from the present policy. In the meantime, as I mentioned, the Government have at least two schemes to promote freight now. It is quite clear that, if we set an increased rail freight target, freight will be an integral part of the railway. The freight community has nothing to worry about in terms of developing its market, although it is quite difficult to fit those trains on to a constrained network, which is why we need an access and use policy to be developed from the present one in order to allow it.
Lord Krebs (CB)
My Lords, could the Minister tell us about the Government’s plans for decarbonising the rail freight sector, in line with the recommendations of the Climate Change Committee?
Lord Hendy of Richmond Hill (Lab)
The rail freight sector is, of course, a commercial sector, with commercial organisations providing power to freight trains. This Thursday, I am going to launch one of several new tri-mode freight locomotives from one of the operators, and a number of aspects of the Government’s investment plans for road and rail will allow decarbonisation of freight trains more easily than at the moment. I will be very happy to write to the noble Lord with some detail about that, so that he can understand what we are going to do.
Lord Anderson of Swansea (Lab)
Is my noble friend satisfied that there are enough incentives to encourage industry to install or improve access for freight?
Lord Hendy of Richmond Hill (Lab)
There are clearly incentives, which I have described, and, in fact, access for freight is continuing. Recently, a new rail link was built into Horton Quarry, which is in Yorkshire off the Settle and Carlisle line, and a new freight terminal at Thorney Mill, which is near West Drayton. So it is clear that developments can be made in that direction, and the discounts that I have described and the encouragement for new freight ought to be testimony to the fact that the Government are keen on that happening.
Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)
My Lords, it is the turn of the Conservative Benches. Can they please make up their minds on who will ask a question?
Lord Kennedy of Southwark (Lab Co-op)
I really think we need to sort this out.
Lord Harper (Con)
My Lords, I am grateful that the Minister confirmed the 75% increase in rail freight—the target that I set in December 2023. I listened carefully to his Answer, in which he talked about the Secretary of State setting a target for GBR. Can I confirm that he is intending that Great British Railways will have that 75% rail freight increase—or more—target and will not set a lower one?
Lord Hendy of Richmond Hill (Lab)
It is a pleasure to hear from one of the many former Secretaries of State for Transport on the other side of the House. I confirm that the 75% will remain. There is no intention of setting a lower target. Of course, it has to be achieved over time, which he will know all about since he had a hand in the previous target.
Lord Spellar (Lab)
My Lords, as a mere previous Minister of State for Transport, might I put it to the Minister that 75% extremely challenging, given the very compact nature of England and the relatively short journeys that are entailed compared with many of our competitors?
Lord Hendy of Richmond Hill (Lab)
I agree that 75% is quite challenging for the island of Great Britain. The economics of rail freight work much better over thousands of miles than over hundreds of miles. However, rail freight growing by 5% last year is evidence that it can be done. The market is segmented into a number of areas such as containers, aggregates and so forth, where progress can be made. This Government are determined to allow that to happen.
Tourism Levy
(1 day, 10 hours ago)
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Lord Bassam of Brighton
To ask His Majesty’s Government what evaluation they have made of the potential benefits of a tourism levy to alleviate funding pressures facing seaside and coastal communities.
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
My Lords, the Government have no plans at present to introduce visitor levy powers in England. The spending review allocated place-based funding that aims to benefit many seaside and coastal communities.
Lord Bassam of Brighton (Lab)
My Lords, I thank the Minister for that encouraging reply. Will he ensure that powers which might be required to enable local authorities to develop such a tourist tax will be included in legislation extending devolutionary powers, so that local authorities can work with businesses and other civic institutions to help regenerate our poorer seaside and coastal communities—encouraging them particularly in the hospitality, arts and cultural sectors?
Lord Livermore (Lab)
I am grateful to my noble friend for his question. I pay tribute to his consistent campaigning on this issue and on behalf of these communities in general, and to his expertise in this matter. He has led several reviews into it. We have been engaging with stakeholders to understand their proposals and will continue to do so, but we have no plans to introduce visitor levy powers in England. I hope he will have seen in the recent spending review that the Government announced communities funding for up to 350 places. Of the 75 places that were listed, 17 are on the English coast. We also announced funding for an additional 25 neighbourhoods over the next decade. Of the 20 additional neighbourhoods, eight are coastal. I hope that goes some way towards addressing the issues that my noble friend sets out.
Viscount Thurso (LD)
My Lords, I am sure that the Minister’s words will be greatly reassuring to the hospitality industry. However, in light of the important contribution that is made by the visitor economy to both wealth creation and jobs, can the Minister give the House an assurance that if any proposal were to be brought in, it would be for a fixed amount and not a percentage of room rate, that it would be modest and that it would be fully consulted on through DCMS? Further, given the heavy burden already being borne by the hospitality industry, will he study the example and possible mistakes of the Scottish system? I declare an interest as a former chair of VisitScotland.
Lord Livermore (Lab)
I cannot give the noble Viscount assurances on something we are not actually considering doing, so I am afraid I cannot give him what he wants. As he says, different places in different countries choose to raise revenue from overnight visitors in different ways, depending on whether they are seeking to attract them, accommodate the results of their visit, or deter them from coming—different scheme designs do different things. We have no present plans to introduce such a levy.
The Earl of Clancarty (CB)
My Lords, the tourist levy initiative is not just about seaside towns, important though those are. Manchester has introduced a voluntary charge; others are following. Are the Government at least looking at the recommendations of the Cultural Policy Unit’s report on this levy, which argues that it could provide an additional but potentially significant regional funding stream for arts and culture, but that to maximise impact and revenues, it would need to be legislated for?
Lord Livermore (Lab)
I am grateful to the noble Earl for his question but, at the risk of repeating myself, we have been engaging with stakeholders to understand their proposals, and we will continue to do so, but we have no present plans to introduce visitor levy powers in England. The noble Earl will be aware that councils and local businesses can choose to raise revenue by setting up business improvement districts; for example, Bournemouth has a coastal business improvement district with the objective of attracting visitors, improving and developing the visitor experience, and building prosperity. That levy will raise over £2 million over five years.
Baroness Goldie (Con)
My Lords, I understand that Edinburgh has become the first city within the United Kingdom to impose a city-wide visitor levy, which will come into effect next year. But it appears that HMRC now proposes to impose VAT upon the levy; it seems intrinsically unfair that a tax is imposed upon a tax. The matter appears currently to be shrouded in doubt—can the Minister clarify the position?
Lord Livermore (Lab)
I do not know the position on that. I will happily check and write to the noble Baroness.
Lord Harris of Haringey (Lab)
My Lords, I do not want to trespass on my noble friend’s usual reluctance to comment on anything that might appear in a future Budget, but is it not part of the devolution agenda to allow combined authority mayors—or, for that matter, the Mayor of London and other existing mayors—to make use of this as a tool to help regenerate their various services that tourists use and enjoy, as is commonly the case elsewhere? Could he also perhaps reflect on his earlier answer about business improvement districts? There, if I understand it, the levy is on existing businesses, not on the people who might use the services concerned. Can he say whether this is under active consideration in terms of the Government’s devolution agenda?
Lord Livermore (Lab)
I am grateful to my noble friend for his question. As he says, there are devolved Administrations who have proposals in this regard. We have been engaging with them to understand their proposals. Obviously, we will continue to do so but, as I have said, we have no present plans to introduce such a levy.
Lord Evans of Rainow (Con)
My Lords, talking about business improvement districts, there is no better sector to help improve any town centre or business district than hospitality, which was hit very hard in the recent Budget by national insurance contributions, minimum wages and, indeed, business rates. How will this tourism tax help hospitality businesses continue to grow and invest in our town centres and seaside resorts?
Lord Livermore (Lab)
I do not know what tourism tax the noble Lord is talking about because, as I think I have made clear, we have no plans to introduce what he is describing. He talked about the recent Budget. In the Budget we introduced a number of policies to help this sector, including freezing the business rates small business multiplier, together with a small business rates relief. This will exempt over a third of properties from business rates. We have also taken steps to reverse the decline of high streets, where one in seven shops now lies empty, by empowering local authorities through high street rental auctions to bring empty units back into use, and committing to permanently lowering business rates for retail, hospitality and leisure properties from 2026.
Lord Vaizey of Didcot (Con)
It seems pretty clear that a tourist tax is emerging as a form of generating revenue. Edinburgh, as was said earlier, is imposing one next year, and there are two voluntary levies, in Manchester and Liverpool. It seems to me that the Minister should certainly look at this in a couple of years’ time to see whether it is feasible. But does he agree the key will be that it supports culture, and indeed the hospitality businesses on which it is levied, and does not simply become just another tax that disappears into the council’s coffers?
Lord Livermore (Lab)
The noble Lord is talking about something that, again, we have no present plans to introduce.
Lord Snape (Lab)
Will my noble friend bear in mind that cities as diverse as New York, Paris and Berlin have tourist taxes and that there is no noticeable lack of tourists in any of them? Would this not provide a valuable source of income, particularly for elected mayors, for example? Dynamic pricing—I understand that is what it is called—means that the price of a hotel room can vary by up to £100 a night, depending on the number of potential customers; a fiver or so will not make much difference in those circumstances.
Lord Livermore (Lab)
My noble friend rightly points to different cities that have different systems in place. I think I said that different places in different countries choose to raise revenue from overnight visitors in different ways, depending on whether they are seeking to attract them, to accommodate the results of their visits or to deter them from coming. As I have said a number of times, we have no present plans to introduce visitor levy powers in England.
Baroness Neville-Rolfe (Con)
My Lords, I do not believe that it is desirable to impose further costs on visitors to our seaside and coastal towns; nor will it incentivise them to come in greater numbers. We need to encourage visitors to these areas, not to discourage or tax them—as, happily, the Minister seems to be saying. A far better incentive for our seaside towns would be for the Government to reverse the devastating tax increases that they imposed recently on the hospitality industry, particularly with regard to national insurance. Given the hit to employment in that sector, do the Government have any revised plans to help with this difficult situation?
Lord Livermore (Lab)
The noble Baroness rightly talks about the importance of the visitor economy. The Tourism Minister has set a goal to grow inbound tourism to 50 million visitors annually by 2030. To help achieve this, DCMS has established a new visitor economy advisory council, which is currently helping to co-create a visitor economy growth strategy, due to be published in the autumn. The strategy endeavours to share the benefits of tourism across every nation and region, including coastal and seaside areas.
The noble Baroness speaks about national insurance increases; it is only a few weeks since we stood here and she supported all the spending in the spending review that that national insurance is funding, so she probably needs to make up her mind whether she supports the spending or does not support the tax that pays for it. As I have already said, we introduced a number of the policies in the Budget to help this sector, including freezing the business rates small business multiplier, together with the small business rates relief. This will exempt over a third of properties from business rates.
Lord Lucas (Con)
My Lords, one of the problems that face seaside towns is that homeless people tend to prefer to be there rather than inland. Do the Government have any plans to make sure that the cost of looking after homeless people is shared more fairly and does not fall to such a large extent on seaside towns?
Lord Livermore (Lab)
As I said, the Government announced significant place-based funding in the spending review. Part of that MHCLG funding was targeted specifically at helping homeless people.
Advertising Restrictions on Less Healthy Food
Baroness Walmsley
To ask His Majesty’s Government how many advertisements for less healthy food will be shown on television as a result of their recent delay in implementing planned advertising restrictions; and whether they will publish an impact statement about the effect on children’s health of their plan to exempt brand advertising.
Baroness in Waiting/Government Whip (Baroness Blake of Leeds) (Lab)
My Lords, on 22 May, the Government announced that we will bring in restrictions on junk food advertising in January 2026. We have secured a unique agreement from advertisers and broadcasters to comply voluntarily from 1 October 2025. A new impact assessment is not needed, as brand advertising was always exempted from the policy. We are committed to implementing the restrictions, which we expect to remove up to 7.2 billion calories from UK children’s diets per year.
Baroness Walmsley (LD)
I thank the Minister, but she clearly does not have the answer to my Question. Does she accept that voluntary measures have been shown not to work? What is more, they provide no evidence to inform future policy development, because they are not monitored. Can she reassure the House that the Government will support independent research into the effect of brand advertising for companies that make unhealthy food on children’s health and their consumption of unhealthy food, compared to the specific advertising of unhealthy products themselves?
Baroness Blake of Leeds (Lab)
First, I commend the work done by the noble Baroness, the committee and everyone in this House who is passionate about this agenda. We are not weakening our stance on this. It is absolutely imperative that everyone understands that we are determined to tackle this issue. We felt strongly that there was a need for legal clarity on the existing policy, so that we could bring in the restrictions in January, which we are committed to doing. I repeat that brand advertising was always out of scope for the policy. That was confirmed during parliamentary scrutiny of the Health and Care Act 2022. This is an important area. We have laid out our determination to move forward on it and we intend to do so.
Lord Krebs (CB)
My Lords, I am sure that the Minister and her officials will be familiar with the research carried out by Professor Emma Boyland of Liverpool University, which was presented recently at the European Congress on Obesity. Professor Boyland’s results show that exposure to brand-only advertisements has the same effect as exposure to product adverts. Both brand-only and product adverts increase young children’s subsequent food intake by 130 calories. In the light of this, can the Minister assure us that the Government will consult with Professor Boyland before considering further whether or not to restrict brand advertising?
Baroness Blake of Leeds (Lab)
We all know that the issues in the area of obesity are complex. The professor has laid out a compelling piece of research. We will continually review all the information available in this space. Obesity has a huge personal cost to children and to adults as they grow older, and also to society and the health department. It is essential that we get this right. As things stand, this is our policy and we are moving forward on it.
Baroness Bennett of Manor Castle (GP)
My Lords, the Minister appears to have answered by omission the part of the Question about whether there will be an impact assessment. Does she acknowledge that there are a number of brands for which the whole product range is, in essence, junk food, and that adding the occasional plastic sachet of apple slices or sugar-ladened fruit smoothie does not alter the fact that those brands being advertised will have a negative impact on our children?
Baroness Blake of Leeds (Lab)
As I said in my Answer, that was not in scope, so we cannot have an impact statement. That is the point we are trying to get over. Things are changing, and we know that there will be attempts to bring in other products, and so we have to be vigilant. That is why we are updating our nutrient profile model, making sure that we keep a close eye on exactly what is happening and how we can best protect future generations.
Lord Vaizey of Didcot (Con)
My Lords, will the assessment of the so-called junk food advertising ban include an assessment of the impact on our commercial broadcasters, which are not finding the current world of competing against the streamers that easy and need every source of revenue they can get their hands on?
Baroness Blake of Leeds (Lab)
I thank the noble Lord for that question. The whole impact of this is closely monitored. There are all sorts of complexities that we have to bring in, including the impact on broadcasters and online advertising and how we deal with the fact that so many people watch on catch-up. All these issues are at the forefront of the Government’s mind and we will continue to monitor.
Lord Boateng (Lab)
My Lords, as a child, I was profoundly influenced by an advert designed to encourage me to eat—and my mother to buy—instant mashed potato. I survived that experience, as did many others of my generation, as I can see looking around the House. Of much more profound and benign influence was the impact of domestic science being taught in my school. What proposals do the Government intend to bring forward to encourage the integration of healthy eating practice into our school curriculum?
Baroness Blake of Leeds (Lab)
What absolutely terrifies me is how I can remember the jingles from so many adverts from when I was a child. I am not sure if I did any revision for exams or not—I cannot remember any of that, but I remember that Smash was going to transform our lives. My noble friend will be aware of the curriculum review that is taking place. There is enormous interest in the whole area of domestic sciences, as well as food, and in the introduction and expansion of best start family hubs. It is about educating the whole family to make sure that we can move forward.
Baroness Benjamin (LD)
My Lords, in 2007, foods high in fats and sugar were banned during children’s TV broadcasting. Children are still obese, so that did not work, but it did affect children’s programming. What are the Government doing to promote ways for children to eat healthily that are affordable and environmentally sustainable and to offer food that tastes as good as it looks?
Baroness Blake of Leeds (Lab)
The noble Baroness is right, and I have alluded to this in my previous answers. The issue of tackling obesity is multilayered and complex. We have the evidence based on experience that working with families and creating excitement around healthy food is incredibly important. One of the most important things we have done, just in the last week or so, is announce mandatory healthy food sales reporting, making sure that shops take responsibility. It is heartbreaking walking into big supermarkets and seeing the amount of shelving space dedicated to attracting young people that, quite frankly, does not live up to healthy eating standards.
Lord Kamall (Con)
My Lords, as a number of noble Lords have said during this Question, there have been many top-down efforts over the years to reduce unhealthy eating and obesity, but they have all had variable levels of success. Noble Lords have said that it is important that we work with local families. Some of the best organisations, such as BRITE Box or FEAST With Us, which work with local families to help them eat healthily on a budget, are doing fantastic work in our local communities. Rather than always top-down solutions and bans, what are the Government doing to work with local community organisations to ensure that they get to families to help them to budget and eat healthily?
Baroness Blake of Leeds (Lab)
I completely agree with the noble Lord and I have personal experience from my background. It is empowering when a parent presents at a community organisation with a child who has an eating disorder or who is becoming obese, and they work together through cooking, education and shopping. All those things are fundamental and they need to be reinforced in schools, and I agree with the noble Lord that we need to tackle this on all levels. We obviously have to have the top-down measures that we were talking about earlier, but changing habits is going to be transformational.
Baroness Finlay of Llandaff (CB)
My Lords, given the commercial determinants of ill health that are now clear, what work are the Government doing with local authorities to make sure that shops such as greengrocers are available on high streets across the country, so that children can work through the lessons that they might learn in school and be encouraged to eat healthily and have healthy snacks rather than be tempted by the supermarket shelves, which are certainly peddling foods that are high in fat, salt and sugar?
Baroness Blake of Leeds (Lab)
The different determinants of health are vital. We have laid out the commercial ones, which is why we are discussing today dealing with advertising, in particular, and other issues. On 12 December 2024, the Government published the revised National Planning Policy Framework. It is fundamental that local planning authorities and councillors have an input into healthy shops and food around schools. The noble Baroness touches on the difficult issue of being able to determine which shops open where, which I think is probably the subject for a future debate.
Rare Cancers Bill
Monday 14th July 2025
(1 day, 10 hours ago)
Lords ChamberRare Cancers Bill 2024-26 View all Rare Cancers Bill 2024-26 Debates Read Hansard Text Amendment Paper: Consideration of Bill Amendments as at 11 July 2025 - (11 Jul 2025)
Secure 16 to 19 Academies Bill
Monday 14th July 2025
(1 day, 10 hours ago)
Lords ChamberSecure 16 to 19 Academies Bill 2024-26 View all Secure 16 to 19 Academies Bill 2024-26 Debates Read Hansard Text Amendment Paper: Consideration of Bill Amendments as at 11 July 2025 - (11 Jul 2025)
Unauthorised Entry to Football Matches Bill
Monday 14th July 2025
(1 day, 10 hours ago)
Lords ChamberUnauthorised Entry to Football Matches Bill 2024-26 View all Unauthorised Entry to Football Matches Bill 2024-26 Debates Read Hansard Text Amendment Paper: Consideration of Bill Amendments as at 11 July 2025 - (11 Jul 2025)
Trial by Jury: Proposed Restrictions
(1 day, 10 hours ago)
Lords ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
Lord Keen of Elie (Con)
My Lords, the creation of a Crown Court bench division, as recommended by Sir Brian Leveson, must be seen in light of his related recommendations. One of the most critical to arrest the growing crisis in our criminal justice system is to provide a further 20,000 Crown Court sitting days. Do His Majesty’s Government accept that clear recommendation? If not, why not? If they accept it, what immediate steps are they actively taking to implement it?
The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Ponsonby of Shulbrede) (Lab)
My Lords, the Government already have more sitting days than any previous Government. The central observation of both Sir Brian Leveson’s review and the earlier view of David Gauke is that one cannot sit oneself out of this crisis or build oneself out of it by building more prison places. There needs to be a systemic review encompassing both Sir Brian’s recommendations and the Gauke recommendations to stop the ever-increasing amount of people being sent to our prisons. It is that in that spirit that we will review Sir Brian’s recommendations. We will publish our review some time in the autumn, with a view to legislating on the matter in due course later this year.
Lord Thomas of Gresford (LD)
My Lords, we are not short of jurors; the whole adult population can serve in a jury. We are short of judges, of prosecuting and defence barristers and of courts that are fit for purpose. Leveson suggests that his new bench courts would give rise to a mere 20% savings in time, and he admits there is no evidential basis for what is simply a guess. If the Government are minded to accept that recommendation, will they introduce pilots to test his hypothesis? What are they doing to address the delays for victims, and for defendants on remand in prison, that are staring them in the face now?
Lord Ponsonby of Shulbrede (Lab)
I thank the noble Lord for those questions. He is absolutely right that we are not short of jurors. We are also not short of magistrates and there is no shortage of applicants to become magistrates. Sir Brian’s suite of recommendations included increasing the role of the magistrates’ court, as well as introducing the new bench division within the Crown Court, to which the noble Lord alluded. He said that Sir Brian said there will be a 20% saving in time with the new bench division. That is his estimate. I have to say, I think that is very conservative. We already know that for similar cases magistrates’ courts are two or three times quicker than Crown Courts, so I think it is conservative to estimate that we will see only a 20% saving in time with the new bench division courts.
The noble Lord made the point about delays for victims. Of course, that underpins the concern and the reason we are introducing these systemic changes in the first place. It is my understanding that there are about 100 cases in London booked for 2029. I think they may be mainly sex-related cases; I am not sure. That is unacceptable. It is unacceptable for the victims and the defendants, and it is a systemic problem we are trying to address.
Baroness Chakrabarti (Lab)
My Lords, I pay tribute to my noble friend the Minister for his long public service as a lay magistrate, as I do to Sir Brian for his long public service as a judge and, post-judiciary, on various inquiries for Governments of both persuasions. I know the Government are considering how to respond to this review and the Gauke review. May I ask my noble friend to take into account that we cannot have one class or one group of people permanently sitting in judgment over another? The lay magistracy, for all its commitment to public service, is not as representative as juries and that needs to be taken on board.
Lord Ponsonby of Shulbrede (Lab)
My noble friend makes a fair point. I would say that magistrates are more diverse than judges. Judges already sit in certain types of cases as single judges deciding people’s guilt; they do it in youth courts and family courts, and there are other examples within the civil jurisdiction as well. I think it is also fair to say that in the big conurbations—London and the big cities—there is greater diversity in the magistrate base. I take the point my noble friend makes, but I think that magistrates are respected and we are starting from a strong base if we want to build on the work they are doing.
Lord Clarke of Nottingham (Con)
My Lords, does the Minister accept that it is a scandalous disgrace that in this country some victims and people charged with offences have to wait months and sometimes years before a trial can take place? Does he therefore agree that, in those circumstances, the Government have no choice but to accept as quickly as possible the excellent recommendations made by Sir Brian Leveson, because I hear of no alternatives? Will he undertake that they will not take too long reviewing and considering these matters? This should proceed as rapidly as possible with the full support of everybody who has the interests of the rule of law and justice in this country at heart.
Lord Ponsonby of Shulbrede (Lab)
I thank the noble Lord for his support. I agree with everything he said. Data published last month showed the backlog stood at nearly 77,000 cases. That is an increase of 2,300 cases over the previous quarter. If we were not to take any action, it is projected that the outstanding caseload would be 100,000 in 2028. Clearly, that is unacceptable, and I absolutely take the point he made. As I said in answer to an earlier question, it is the Government’s expectation that we will respond to Sir Brian’s recommendations in the early autumn with a view to legislation.
The Lord Bishop of Manchester
My Lords, it was my privilege this lunchtime to be with a group of young legal students with very diverse backgrounds except that they had all been through the care system—a group of people who are more likely than anybody else to be charged and prosecuted for behaviours that others might be treated more favourably over. The same often applies to people from minority-ethnic backgrounds. Does the Minister agree that dealing with that disproportionality in how people are treated for the same behaviour by the legal system will be a good way to reduce some of the waiting lists of courts?
Lord Ponsonby of Shulbrede (Lab)
I absolutely recognise what the right reverend Prelate has said. As he may know, I sat as a youth magistrate for 17 years and as a family magistrate for a long period as well, and I recognise the general problem of disproportionality. There is not a single way of solving that problem, but a number of agencies within the criminal justice field and the MoJ are looking at the different aspects of disproportionality. He opened by pointing at the care system in particular. Probably well over 50% of all the youths I saw in youth court had come from the care system in one way or another, so I recognise what he is saying, and it is something that we take very seriously.
Lord Pannick (CB)
My Lords, does the Minister agree that, in addressing the very serious problems faced by the criminal justice system, it is important not to romanticise the jury, given that 90% of all criminal trials in this country are heard without a jury and relatively speedily—not as speedily as perhaps they could be, but relatively so—and they are heard effectively and with justice.
Lord Ponsonby of Shulbrede (Lab)
I agree with the noble Lord—of course I would agree because, as a magistrate, I was among those who hear 90% of all criminal cases. There is no right to a jury trial; however, there is a right to a fair trial. For a fair trial, it must be heard in a timely manner. That is where we are failing. We need these systemic changes to address that fundamental problem, so that people—both victims and defendants—can get a fair trial in a timely way.
Lord Faulks (Non-Afl)
My Lords, further to the question from the noble Lord, Lord Pannick, can I ask the Government to take particular note of the recommendation in relation to fraud trials? This is not a new suggestion; it goes back to Lord Roskill about 50 years ago. These are very lengthy, very expensive trials, which are often very difficult for juries to understand—that is not in any way to patronise the jury system. It would save a great deal of time and money, and would help with the backlog, if we moved to a system of trial that does not involve juries.
Lord Ponsonby of Shulbrede (Lab)
The noble Lord makes a very good point. It was a recommendation of Sir Brian’s, and I am sure it is one on which the Government will reflect very carefully.
Employment Rights Bill
(1 day, 10 hours ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
16:27 - Division on Amendment 1 - Ayes: 264 / Noes: 158 - Amendment 1 agreed.
16:57 - Division on Amendment 10 - Ayes: 267 / Noes: 153 - Amendment 10 agreed.
18:44 - Division on Amendment 31 - Ayes: 65 / Noes: 170 - Amendment 31 disagreed.
19:23 - Division on Amendment 42 - Ayes: 232 / Noes: 137 - Amendment 42 agreed.
20:17 - Division on Amendment 43 - Ayes: 161 / Noes: 191 - Amendment 43 disagreed.
Lord Goddard of Stockport
Member’s explanatory statement
This amendment changes the provisions in the Bill from a requirement for an employer to offer guaranteed hours to a right to request guaranteed hours by an employee.
Lord Goddard of Stockport (LD)
My Lords, I welcome the opportunity to open the debate on this group. I intend to be brief, as is appropriate on Report—I have said it, Minister, I cannot do any more. I begin by saying that there is clear cross-party agreement that exploitative zero-hours contracts must come to an end. Indeed, we on these Benches unequivocally believe in the need to address the problems of exploitative zero-hours contracts, which leave too many workers in precarious employment circumstances. That said, our amendment reflects that shared objective, while offering a more practical and balanced view.
The amendment would change the obligation under the legislation to offer guaranteed hours to a right to request them. Further, it maintains that when such a request is made, the employer must grant it. This would allow workers to acquire guaranteed hours if they wish, providing greater security and stability, while enabling them to make a personal choice. At the same time, it would reduce the administrative burden on employers, especially in sectors that rely on flexibility.
Although we recognise that some workers do not want precarious zero-hours contracts, this should not come at the expense of sectors where flexibility is essential and many workers are content with those arrangements. This would balance security for workers with necessary flexibility for employers in sectors that rely on flexibility. These include seasonal, tourism-related and agricultural workers, as well as hospitality, retail, theatre and other industries where work patterns are inherently dynamic and demands fluctuate. The amendment would ensure that the new provisions are adaptable enough to function effectively across all those employment settings.
In Committee, Members raised understandable concerns about what would happen if a request for guaranteed hours were simply denied. Let me be clear: under this amendment, if a worker makes a formal request, the employer must make a guaranteed hours offer. It would not be optional or discretionary; all workers who wanted greater certainty would be empowered to secure it. At the same time, the amendment avoids placing a universal obligation on all employers to offer guaranteed hours in every instance, which could place undue strain on sectors that rely on that flexible staffing model. In doing so, it would deliver a fair and workable solution that respects the rights of workers while acknowledging the operational needs of these industries.
We also recognise the Government’s amendments since Committee. In particular, we welcome the steps taken to clarify how new obligations will apply to agency workers once the legislation is enforced. These changes will help, and the framework is clear, consistent and better understood by all those affected.
That said, the Government are asking industry and business, whose support is vital for this, to prepare ultimately to comply with this provision and with the wider Act without providing any critical detail, such as reference periods for guaranteed hours and other key elements. This lack of clarity, which seems to run throughout the Bill, makes it challenging for employers and workers to understand their rights and obligations. Hindering effective implementation and planning is not acceptable. Such clarification, particularly for reference periods for guaranteed hours, is critical if the industry is expected to prepare. We on these Benches have consistently raised concerns throughout the Bill about the uncertainty caused by leaving key details, such as qualifying periods for guaranteed hours, to be declared by some later regulation. Although we agree that some flexibility is needed, it is a question of how it is implemented. We believe that clearer rules in the Bill itself will help both workers and employers to better prepare for the challenge.
Finally, as I stated at the beginning, we fully recognise the damage that exploitative zero-hours contracts can cause. However, addressing this issue must not come at the expense of sectors where flexibility is essential and many workers are content with arrangements. Our amendment seeks a fair balance, protecting workers from exploitation while preserving the flexibility that is crucial for many industries to function. I look forward to the Minister’s response and I beg to move.
Baroness Carberry of Muswell Hill (Lab)
I will make a brief comment on Amendment 1, which would replace a right to have guaranteed hours with a right to request. I very much fear that it undermines the purpose of the Bill, which is trying to deal with the problem of zero-hours contracts where employees do not have predictability over their hours.
I appreciate that the desire of the amendment is to reduce the burden on employers in working out what the guaranteed hours would be, only to find that an employee declines the offer. However, I do not think that that is likely to happen very often. Obviously, it is impossible to know what proportion of employees would turn down such an offer, but we do know from surveys—and most recently from a poll that the TUC did last year—that the majority of workers on zero-hours contracts consistently say that they would prefer to have guaranteed hours. It is therefore very unlikely that large numbers of them would turn down an offer once it has been made.
Perhaps more seriously, the amendment does not take account of the imbalance of power in workplaces and the characteristics of employees who are working on zero-hours contracts. The latest figures from the ONS tell us that zero-hours contract workers are much more likely to be young and to work in elementary occupations. They are much more likely to be working part-time and in low-paid sectors. These are the least empowered workers in the workforce; they are unlikely to understand their rights, even if the employer has complied with the requirement to find information. They are the least likely to be represented by a union and the least likely to know how to exercise their rights. The right to request guaranteed hours, in those circumstances, is not a real right at all.
How many of those workers, vulnerable as they are, might come under pressure not to press for guaranteed hours? The vast majority of employers do right by their employees, but many do not. The formulation of the amendment leaves open the path for some of the worst employers not to offer guaranteed hours to workers on zero-hours contracts. I do not think that the amendment does the intention to serve those workers any favours at all.
Baroness Fox of Buckley (Non-Afl)
My Lords, I support all the amendments in this group, but especially Amendment 1. As we start Report, and the first of several groups focusing on zero-hours contracts—although I will speak only on this group—I want to emphasise why getting the wording and balance right in this part of the Bill is important for proportionality and to avoid unintended consequences.
Many of us were originally supportive of the Bill’s commitment to tackle the rise of zero-hours contracts, especially in retail and hospitality—and tackling the way in which they have been used exploitatively is certainly welcome. But in Committee the Government acknowledged that there needs to be the offer of some flexibility, which is what certain cohorts of workers want.
On Amendment 1, the TUC briefing on the Bill complains that the vast majority who ask for guaranteed hours are turned down. Surely the point of Amendment 1 is the requirement that they will not be turned down. What is actually happening here is that there is a shift to a right to request guaranteed hours on to the employee, which I would have thought reassures the TUC. It empowers the employee but avoids an overrigid imposition of the Bill’s requirements on businesses, regardless of the situation. These sorts of details matter, now that we are finalising what will be in the Bill. I am not sure how helpful it is that, for example, some in trade union and government circles have briefed recently that getting into the details amounts to being, to quote the Deputy Prime Minister,
“on the side of bad bosses, zero-hours contracts and fire-and-rehire”.
We are here to make law, not to make headlines, and law means accepting that the devil is indeed in the detail. The Government know that there are lots of worries about unresolved aspects of the Bill. Indeed, Jonathan Reynolds, the Business Secretary, quoted in the FT recently, assures us that he is “absolutely certain” of addressing businesses’ concerns over the statutory probation period. Pertinent to this group of amendments, he says there is “more than enough room” to reach an agreement on guaranteed hours. He says:
“I have to have the bill passed first before we go into the implementation”,
but I suggest that is the wrong way around. If there is more than enough room to reach agreement on things such as guaranteed hours, let us put this in the Bill.
In other words, in trying to pin down how a new right to guaranteed hours should be framed in regulations, these amendments bring clarity. They are meant to help the Government. I am worried that too many important details are being kicked down the road, hence avoiding democratic debate and scrutiny and creating a real mood of uncertainty among employers. We have had warnings from business about the Bill harming an already fragile economy and so on, but these kinds of concerns are trickling down to workers too.
I work with a lot of young people at the Academy of Ideas, and the initial warm enthusiasm for the Bill has gone rather cold. I have been talking to one young man who wrote a missive for us on hospitality and how much it has done for him. Omar is concerned that what he thought was going to be in his interests might turn out not to be. He says: “Hospitality is an industry that has been flexible enough to rely on youth employment and allowed many of us a way into work. It has taught me many useful lessons, and has built my confidence as a person. Now I fear that the legislation will reduce the opportunities and misses the mark”. On this amendment, he just wants the right to be able to ask for hours, but he does not want anything that disrupts the flexibility of hospitality in doing so. That echoes the balanced way in which the noble Lord, Lord Goddard of Stockport, moved the first amendment in this group.
Lord Ashcombe (Con)
My Lords, this first group of amendments, in the names of the noble Lord, Lord Goddard of Stockport, and my noble friends Lord Sharpe of Epsom and Lord Hunt of Wirral, is significant and I am pleased to support it. I declare my interest as an employee of Marsh Ltd, a large insurance broker. Noble Lords might think that this will therefore not have much effect on me. They would be right, but I have other views.
Many individuals, for a wide variety of reasons, do not wish to have a permanent contract with guaranteed hours. While the Government might like to think that everyone wants guaranteed work, that is simply not the case. Flexibility for employees who desire zero-hours contracts is surely what everybody wants. In my experience, happy employees inevitably are more productive than those who are not. This goes directly to the heart of what the Government are trying to achieve—growth.
At the same time, many others would welcome the certainty and stability of fixed-hours contracts. It is essential, therefore, that we provide clarity in this legislation where ambiguity might otherwise lead to dispute or, worse still, legal action. That is why I welcome Amendment 2, which introduces a clear definition of a threshold below which it is not reasonable for an employee to request a guaranteed-hours contract. Setting this threshold at eight hours a week—essentially a day’s work—offers helpful clarity. It strikes a sensible balance between flexibility and fairness.
On Amendments 3 to 5, there also needs to be fairness in any arrangement, otherwise it will not stand the test of time. Therefore, it is entirely reasonable to allow a reference period during which both parties can assess the suitability of the arrangement before any request for a fixed-hours contract is made. This period of mutual assessment is not only practical but necessary. Mistakes can be made on both sides, and both employer and employee should have the opportunity to part ways without undue burden if the relationship is not the right fit. The 26-week period proposed in these amendments is an appropriate length of time for such assessments to take place.
As mentioned before, unhappy or mismatched employment arrangements serve no one. They can harm the individual’s well-being and morale and, in time, may undermine the company’s productivity, particularly for smaller businesses, where every member of staff has a significant impact—the smaller the company, the bigger the impact. We must remember, as we were reminded in Committee, that small businesses make up the majority of the companies in this country, unlike those I work for. For these reasons, I support the inclusion of a minimum number of hours’ work per week for a clearly defined reference period before the employee may request a guaranteed contract. I believe these amendments strike a fair and practical balance that will benefit both employers and employees.
Baroness Noakes (Con)
My Lords, in this group I have Amendments 9 and 22, both of which seek to amend government amendments in identical ways. I shall speak to Amendment 9, which seeks to amend government Amendment 8, but my remarks apply equally to Amendment 22, which seeks to amend government Amendment 21. Before doing so, I offer my support to the other non-government amendments in this group; other noble Lords have already spoken well in favour of them.
My Amendment 9 is based on the premise that the Government should be trying to balance employee rights with the need of businesses to be successful and to grow. The Government want to end what they call “one-sided flexibility” but that would not be a good thing if the outcome was to destroy the labour market flexibility which is the hallmark of the UK’s international competitiveness and has been a major contributor to the country’s overall economic resilience.
Government Amendment 8 amends the provisions of Clause 1 which would have allowed the Secretary of State to create exemptions from the duty to offer guaranteed hours on a very broad basis. That power was a glimmer of light in a part of the Bill that was otherwise quite dark, especially for those employers whose businesses could be harmed by the new duty. It is clear that the Government wanted to use that new power very sparingly but it was drafted in a broad way and would therefore have offered the Government an elegant solution if they discovered that certain types of businesses simply could not stay in business if the duty applied to them.
Unfortunately, the Delegated Powers and Regulatory Reform Committee of your Lordships’ House, for which I generally have a high degree of respect, declared that this power was “inappropriately broad”. I suspect that if the DPRRC had attended some of the debates on the Bill earlier in its passage, it would not have been quite so quick to damn this power. Even more unfortunately, the Government have chosen to respond to the DPRRC’s recommendation by making the power virtually useless.
My little glimmer of light has been virtually extinguished by the Government’s Amendment 8. This now requires that when the Government try to use the regulations to create exemptions, they have to take account of two things. The first is the benefits of workers receiving a guaranteed-hours offer. I would have absolutely no problem with that if it were balanced by an equivalent need to avoid having adverse effects on employers, but Amendment 8 goes further and says that the needs of the employers concerned can be taken account of only if they are dealing with “exceptional circumstances”. I do not know what “exceptional circumstances” means but it is probably something like a pandemic; it would not deal with those businesses which face fluctuating demand patterns as part of their natural business model. Unpredictable work demands are therefore difficult to see as exceptional circumstances.
When we debated this clause in Committee, my noble friend Lady Verma, who is not in her place, talked about the need for employers providing domiciliary or home care to be responsive to the actual fact pattern of demand for care. I suspect that would not count as exceptional, even though it is an intrinsic part of the business model of those who provide home care; nor would it, I suspect, apply to any of those businesses that are affected in any way by seasonal demand patterns, as has already been mentioned. Therefore, the ordinary everyday needs of businesses will be ignored if Amendment 8 is accepted without amendment. In practical terms, all the Secretary of State can take account of is the benefits to workers of receiving a guaranteed-hours offer.
Therefore, my Amendment 9 removes the constraint of needing to satisfy the exceptional circumstances limb; the Secretary of State would simply be having regard to, on the one hand, the benefits for employees and, on the other, the adverse effects on employers. I hope in that way a proper balance would be achieved in the Bill and that the Government will be prepared to rethink their Amendments 8 and 21.
Lord Wolfson of Aspley Guise (Con)
My Lords, Amendment 2 stands in my name. I declare my interest as a shareholder and the chief executive of Next plc, a job I have held for 24 years. I should add that Next employs nearly 50,000 people in the UK, of whom around 20,000 are part-time.
I hasten to add that the company I work for does not use, and never has used, zero-hours contracts. I am not in favour of them. As the noble Lord, Lord Barber, said at Second Reading, eliminating bad employment practices serves the interests of good employers. He was right. As I said in Committee, I support the Government’s aim of eliminating the unfair practices associated with zero-hours contracts. The problem with this section of the Bill is not the tight regulation of zero-hours contracts; nor is it the understandable intention to extend those protections to low-hours contracts, preventing employers from circumnavigating zero-hours provisions by offering token contracts. The problem is the failure to define what low-hours contracts are for the purposes of the Bill or give any hint as to what that limit might be.
Amendment 2 aims to address this problem by placing a reasonable cap on the discretion of the Secretary of State to define what low-hours contracts should be at eight hours a week. This is important because it materially changes the nature and scope of the Bill; if this number is set too high, the provision will profoundly change the working arrangements of 8.5 million part-time workers in the UK.
I can assume only, having read through the provisions of the Bill, that the Government have not really understood the near impossibility of managing the process they are proposing if it extends to millions of people. Employers will have to track their low-hours employees’ extra hours every day of the year, and at the end of every employee’s individual reference period, businesses must offer those employees a new permanent contract. These hours will have to be offered in a compliant way, with no hint as to how you comply with the Bill itself. They will have to be offered the hours regardless of whether those hours are actually needed.
This process creates two problems. The first is the problem of complexity of implementation, and the second is that businesses, if they comply with the Bill, risk being chronically overstaffed. To start with complexity, I estimate that in the company I work for, it will take us at least a year and several million pounds of systems development to develop a system to adequately cope with the implementation of the Bill. I work for a company that has more than 1,600 systems and software professionals. Small businesses will find this process almost impossible to manage. I would be very grateful if the Minister could share any details as to the cost and scope of work that will be required to be undertaken by councils, hospital trusts and other public sector employers for the purposes of developing these systems.
The second problem is that, even if an employer successfully implements a system, they will have to offer contracts regardless of whether there is any work for those people going forward. Your Lordships will not be surprised to hear that restaurants, shops and pubs simply cannot afford to have the same number of people working in their establishments in February as they have in December. Nor can we take the risk that the extra hours required to cover many different seasonal peaks and sale events become permanent costs for the rest of the year.
The complexity of implementation, along with the risk that businesses leave themselves overstaffed, will mean only one thing, and it is very important that the Government understand this: businesses simply will not be able to offer additional hours to workers on low-hours contracts. Instead, they will be forced to employ temporary staff to cover those peaks, depriving loyal and skilled employees of income at times when they need it. Whose interest does this serve? Neither business nor employees, and certainly not a Government that I believe are genuinely interested in promoting growth.
Lord Sharpe of Epsom (Con)
My Lords, it is a genuine pleasure to follow my noble friend Lord Wolfson, who speaks with genuine authority and deep experience on this important subject.
Amendments 2, 3, 4 and 5 stand in my name and that of my noble friend Lord Hunt. I shall start with Amendment 2, about which we have just heard, which is also signed by my noble friend Lord Wolfson. Clause 1 requires employers to offer guaranteed-hours contracts to low-hours workers after a reference period, but, as we have heard, the Government still have not defined what low hours actually means. That is not a minor technicality, because at this stage it makes the policy unworkable.
We are hearing that the Government prefer to define low hours as 16 hours per week, but we have also heard that is too high. We saw some different data. According to the British Retail Consortium, only 5.5% of retail workers are on below eight-hour contracts, while nearly 20% work between eight and 16. Raising the threshold to 16 hours would mean that employers are forced to repeatedly make contractual offers to one in five workers, most of whom are in regular, stable, part-time work. It is a dramatic expansion, with, as we have heard, very major consequences. As we have also heard, some of those consequences are higher employment costs, increased complexity, particularly for small businesses, and, inevitably, job losses.
Retail, hospitality and leisure businesses will respond rationally to risk. That means fewer short shift roles, fewer flexible contracts and less tolerance for marginal labour hours. Some will restructure and some will reduce headcount, but others—especially small businesses—will just close. If the Government define low hours at 16, they will directly accelerate redundancies and reduce employment opportunities for those with caring responsibilities, students and others who depend on part-time jobs. We have also just heard very powerfully about the effect on entry-level employment, illustrated with some very stark statistics.
This is not speculation; it is how businesses operate. A badly defined threshold forces risk-averse behaviour and the effect will be the opposite of what is intended. An eight-hour threshold would limit the burden to genuinely casual contracts. That is a workable, proportionate and sensible approach. Anything beyond that is unmanageable and would be economically reckless. The Government need to listen.
On Amendments 3, 4 and 5, the Government have indicated that they are considering setting the reference period for guaranteed hours at 12 weeks. During Committee on 29 April, I asked the Minister which businesses support a 12-week reference period; at that time, she was unable to name a single business. It is now nearly two and a half months later, and I am confident that she will still be unable to provide an answer as to how many businesses, particularly small businesses, support a 12-week reference period.
The reality is that no meaningful business sector has endorsed this 12-week period. It is simply out of touch with the realities of running a business, especially in sectors such as retail, hospitality and leisure, where work patterns fluctuate widely with the seasons, weather and customer demand.
A 26-week reference period is far more practical. It would better capture seasonal cycles, provide clarity and stability for employers and employees alike and significantly reduce the administrative burden of constantly reassessing guaranteed hours. Without a longer reference period, employers will simply reduce hiring on 12-week contracts to avoid triggering this costly and complex obligation. That will not protect workers; it will diminish their opportunities and increase their precarious nature. I therefore urge the House to support the amendments put forward by me and my noble friends. We have set the reference period at 26 weeks. This is sensible, it is a workable compromise, and it will protect workers’ rights while respecting the operational realities of businesses.
To turn lastly to Amendment 1 in the name of the noble Lord, Lord Goddard, which my noble friend Lord Hunt of Wirral and I were happy to sign, it makes no sense to require employers to offer guaranteed hours to employees who do not want them. The Government appear to misunderstand or simply disregard the autonomy of the individual worker. Imposing this administrative burden, especially on small employers, to calculate and offer guaranteed hours where they are neither wanted nor needed is an unnecessary and unavoidable cost. We therefore strongly support the right to request amendment proposed by the noble Lord, which better respects worker choice and employer flexibility.
Lord Londesborough (CB)
My Lords, I support all the amendments in this first group, but I shall speak briefly to Amendment 9 in the name of the noble Baroness, Lady Noakes, which, as she explained, is an amendment to the Government’s Amendment 8, and Amendment 22. I want to interrogate the wording of the Government’s Amendment 8. We have a 309-page Bill. There is a lot of concern outside, at the coal face, from businesses about definitions and what the Bill means. This is a good example:
“In exercising the power under subsection (6) the Secretary of State must, in particular, have regard to … the desirability of preventing this Chapter from having a significant adverse effect on employers who are dealing with exceptional circumstances”.
Can the Minister explain how these exceptional circumstances are defined, and how significant does the adverse effect need to be for it to be regarded by the Secretary of State?
I ask that mindful of the latest survey from the Federation of Small Businesses, just a couple of days ago, which surely signals significant adverse effects for the majority of small and micro-businesses. For the first time in its history, the FSB reports that more UK small firms expect to shrink, sell up or shut down over the next 12 months than anticipate growth. The FSB’s Q2 small business index shows that 27% of small businesses expect to contract, close or be sold, outstripping the 25% which are planning for growth, and it marks the first time that the balance has tipped towards pessimism since the index began. As the noble Baroness, Lady Noakes, points out in her amendment, there is no need to layer “exceptional circumstances” on to already significant adverse effects on employers. It would be far neater, of course, to exempt small and micro-businesses from Clause 1, as I and many others argued throughout Committee.
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 first thank your Lordships’ House for the extensive engagement, debate and scrutiny that this Bill received throughout Committee. Indeed, we have held over 50 engagements with noble Lords from across your Lordships’ House since the Bill left the other place. As we progress Report, I need to remind noble Lords that the Government were elected on a manifesto commitment to make work pay. This Bill marks the first phase in delivering that commitment. Once implemented, it will raise the minimum floor of employment rights, provide a level playing field for businesses which are already engaged in good practice and raise living standards across the country. Alongside the new industrial strategy, the Bill will support our mission to increase productivity and create the right conditions for long-term, sustainable, inclusive and secure economic growth.
Turning to the amendments, I have listened carefully to the comments of the noble Lord, Lord Goddard, on Amendment 1. I remind noble Lords that as of March 2025, there are around 1 million people on zero-hours contracts in the UK. About 33% of them have been with their current employer for less than 12 months and 51% for less than two years. These are the most vulnerable individuals in the workforce. The Government are therefore committed to ending exploitative zero-hours contracts, which the noble Lord, Lord Goddard, quite rightly describes as “precarious employment”.
Lord Wolfson of Aspley Guise (Con)
Would the Minister accept that setting a cap on the number of hours still gives the Secretary of State flexibility to determine exactly what the number of hours is, while giving industry the security, comfort and certainty it needs to carry on investing in its shops, pubs, restaurants and care homes?
Baroness Jones of Whitchurch (Lab)
My Lords, we intend to consult on this, and of course we will take the comments and concerns of business into account; it is our absolute intention to do that. What we do not want to do is pre-empt that by setting out the conclusions of the consultation in advance. I hear what the noble Lord says, but I do not think that fits with our model of wishing to take this and consult further on it. But of course we will take business views into account.
I turn to the amendments tabled in my name. We listened to concerns raised by parliamentarians and business stakeholders, and responded promptly by amending the Bill. The Bill allows regulations to specify circumstances in which the duty to offer guaranteed hours does not apply or for a guaranteed offer once made to be treated as withdrawn. We expect that this power will be used narrowly in response to changing circumstances to address situations where the measure would have significant adverse impacts. The Delegated Powers and Regulatory Reform Committee recommended restating this power with greater precision.
In response, we have tabled amendments to constrain the use of this power. Our amendments require that, in exercising this power, the Secretary of State must have regard to both the benefit to workers of receiving a guaranteed-hours offer and the desirability of preventing the provisions having a significant adverse effect on employers who are dealing with exceptional circumstances. Where this power is exercised and the duty to offer guaranteed hours does not apply, a further amendment clarifies that the exception will operate in relation to a single reference period, rather than being open-ended.
Circumstances specified in regulations would need to be specific, factual and narrow enough so that it is crystal clear that the duty then does not apply or no longer applies. There will be no room for discretion from the employer or the worker. The Government will consult on any use of this power. This way of constraining the exercise of the power still allows flexibility to determine the specific circumstances once all interested parties have had a chance to input.
Corresponding amendments are made to the provisions for agency workers. In addition, under the Bill’s current provision, an agency worker who accepts a guaranteed-hours offer from an end hirer becomes directly engaged by the hirer. The worker could then be entitled to another initial reference period as a directly engaged worker. Amendments 6 and 23 clarify that agency workers who accept a guaranteed-hours offer will not benefit from a new initial reference period. This aligns their rights with directly engaged workers and eases employer burdens.
Regarding Amendments 12 to 19, the Bill usually requires a guaranteed-hours offer to be made to a qualifying agency worker on no less favourable terms and conditions taken as a whole than those under which the agency worker was engaged during a relevant reference period. We have heard concerns about instances where agency workers are paid a significant premium in recognition of, for example, the temporary and insecure nature of their work. As the Bill stands, such pay premiums could be carried over into a guaranteed-hours offer, putting those agency workers at an unintentional advantage compared with directly engaged workers in similar roles. This could also cause employers to move away from hiring agency workers in the first place. These amendments will allow less favourable terms and conditions relating to pay to be proposed in guaranteed-hours offers to agency workers, to ensure alignment with comparable directly engaged workers, maintaining flexibility for businesses and supporting consistency in treatment of the workers.
I turn to Amendments 9 and 22, in the name of the noble Baroness, Lady Noakes, which seek to amend the amendments in my name that I have just justified. I listened carefully to the noble Baroness’s points, but accepting her amendments and removing the reference to employers dealing with exceptional circumstances would not address the DPRRC’s criticisms regarding the breadth of the power. It would also not be clear what the Secretary of State would need to consider when setting out the specified circumstances. I reassure the noble Baroness that, once the Secretary of State has considered these matters, he can still decide to make regulations to set out the circumstances in which the duty to make guaranteed-hours offers does not apply, which may not relate to exceptional circumstances.
I therefore ask the noble Lord, Lord Goddard of Stockport, to withdraw his amendment. We very much share his objective to address the imbalance of power, and I hope he has heard our case about why we believe that what is currently in the Bill is the best way to do that. I also commend to the House Amendments 6 to 8, 12 to 21 and 23 in my name.
Lord Goddard of Stockport (LD)
I thank noble Lords who took part in this debate. The number of amendments in this group shows the depth of feeling on zero-hours contracts. I think it was the same story from the noble Baroness, Lady Carberry of Muswell Hill—for whom I have the highest regard—and the Minister. It was not a defence; it seemed to me that they were saying that giving employees this extra power would somehow not help them in asking for those contracts, as the employer might not like it.
That is the point of it. The Bill is supposed to address what employers and employees like. This is not an either/or; it is an “extra for”—an extra protection for workers. As the Minister herself said, 1 million people are on zero-hours contracts, many of which are exploitative. That should not remain after all this debate has taken place. All we are asking for is clarity and detail and all we are getting is consultation and manna tomorrow. That is not acceptable. There are 1 million people looking at this today, wondering what we are going to do. In my mind, what we should do, which I wish to do, is test the will of the House.
The Deputy Speaker (Viscount Colville of Culross) (CB)
I need to warn your Lordships that if Amendment 3 is agreed to, I cannot call Amendments 4 to 6 by reason of pre-emption.
“(6A) See paragraph 5(3A) of Schedule A1 for provision about when the initial reference period is not a reference period in relation to a worker who is a former agency worker and that worker’s employer.”Member's explanatory statement
This amendment is consequential on my amendment to Schedule 1 at page 160, line 33.
Member's explanatory statement
This amendment clarifies that, where the power in new section 27BD(6) of the Employment Rights Act 1996 is exercised so as to make provision for the duty in new section 27BA(1) not to apply, the exception will operate in relation to a reference period.
“(6A) In exercising the power under subsection (6) the Secretary of State must, in particular, have regard to—(a) the benefit to workers of receiving a guaranteed hours offer under this Chapter, and(b) the desirability of preventing this Chapter from having a significant adverse effect on employers who are dealing with exceptional circumstances.” Member's explanatory statement
This amendment sets out a non-exhaustive list of matters that the Secretary of State must have regard to in exercising the power in new section 27BD(6) of the Employment Rights Act 1996.
Lord Goddard of Stockport
“(5A) Where notice of cancellation has been given in advance of the short notice period as defined by subsection (6), the employer is not required to make payment under subsection (1).”Member’s explanatory statement
This amendment and another in the name of Lord Goddard defines “short notice” as at least 48 hours before a shift is due to start, and clarifies that if this notice is given, the employer will not be required to make a payment under section 27BP.
Lord Goddard of Stockport (LD)
My Lords, coincidentally, both the amendments in this group are mine. They seek to address the rights of workers to receive payments following a short-notice shift cancellation and provide clarity. I would like it on record that we recognise what the Government are trying to achieve with these provisions and that workers should be compensated when shifts are cancelled at short notice. In recognition of that provision, I have Amendment 11 in my name. This is especially important, given that such cancellations often disproportionately impact those workers in hospitality, retail and other sectors where shift incomes can be crucial to meeting everyday financial needs.
My amendment seeks to address this by defining “short notice” as at least 48 hours before a shift is due to start. By doing so, they would provide much-needed clarity and certainty, helping people and businesses, particularly smaller businesses, without expensive legal and administrative resources to plan for and effectively implement their requirements.
Importantly, the amendment would maintain the principle that, if a shift is cancelled within 48 hours of that window, the employer is still required to provide compensatory payments to the worker. That would protect workers from a sudden loss of income caused by last-minute cancellations, which can be devastating for those relying on shift work to support themselves and their families. The amendments would strike a fair balance, ensuring that workers are compensated fairly for genuinely short-notice cancellations while supporting practical and manageable implementation by employers across the sector with fluctuating and dynamic working patterns.
This amendment is important because a persistent problem with the Bill is a lack of clarity in key provisions such as short-notice cancellations. The Bill does not define what constitutes “short notice” and instead leaves this Government to determine that through future regulation. This creates uncertainty for businesses and workers alike. It appears that the Government wish to maintain flexibility on this provision by leaving the definition of regulation, but for businesses of this kind that causes limbo, leaving them uncertain and unable to adapt for practical efficiency.
Without clear rules, employers, especially small businesses, face real difficulties in preparing for their legal obligations, which could lead to inconsistent application and confusion in the workplace. I sincerely ask the Minister why this important detail has yet to be clarified. We are on Report in this House and the Bill has already completed its Commons stages. Given that we have numerous government amendments here, just as we had in Committee, I hope the Minister will be able to provide some clarity and answers on these important questions. I beg to move.
Lord Ashcombe (Con)
My Lords, I support Amendments 10 and 11 in the name of the noble Lord, Lord Goddard. We all understand that in shift-based work there is an expectation that, if someone is on the rota, the shift will go ahead, but life is not always so predictable. In my experience, unexpected changes happen, often without warning or obvious reason. So the question we must ask is: should an employer still be obliged to pay a worker when there is no work available? I can already hear the instinctive response “Yes”, and I understand why, but we must also ensure that the rules we put in place are fair and reasonable for all parties.
The amendments propose a balanced solution. If an employer needs to cancel a shift, they should provide notice. I entirely agree with noble Lords opposite that, if notice is given only an hour before the shift begins, that is clearly unreasonable. By that time, the worker will likely have made arrangements, be they childcare, travel or even turning down other opportunities to be available for work. In such cases, they deserve to be paid as if they had worked the shift.
As it stands, the Bill does not seem to specify a minimum notice period before a shift is cancelled. That gap needs addressing. The proposed 48-hour period in the amendments would strike a reasonable balance. It would give workers enough time to make other plans and give employers and, particularly importantly, the small business community some flexibility, while avoiding the unfairness of telling someone at the last minute, “You’re not needed today”, and leaving them unpaid. With that in mind, I am happy to support the amendments.
Lord Hunt of Wirral (Con)
My Lords, I thank the noble Lord, Lord Goddard of Stockport, for his amendments. I agree very much with the approach my noble friend Lord Ashcombe has taken. We are fully in agreement that workers deserve reasonable notice of shifts. That is a fair and modern expectation. What we cannot accept or support is the way the Government have approached this issue. It is, in effect, vague in definition, burdensome in practice and, yet again, deeply disconnected from the operational realities faced by employers.
The term “reasonable notice” has been left entirely undefined in the legislation. That is not just an oversight; it creates legal uncertainty and leaves both workers and employers unclear about their rights and responsibilities. The result is a framework where expectations are high but there is no guidance; guidance is absent. I hope of course that the Minister will reassure us on this. It would be a very good move on the part of the Government to accept Amendments 10 and 11.
The real concern is how all of this interacts with other government-imposed obligations, especially, as the noble Lord, Lord Goddard of Stockport, pointed out, for small businesses, which form the backbone of our economy. The Minister knows this well as he has unrivalled experience in that sector. Let me just spell it out. The current proposals amount to what is virtually a threefold financial cost to the employer in the event of an unavoidable change, such as an employee calling in sick on the day of their shift. First, the employer will be required to pay statutory sick pay from day one—a new obligation introduced without sufficient support or transition for small businesses. Secondly, under these proposed rules, the original shift could not simply be cancelled without consequence. The employer would be expected to pay the sick worker for the shift they can no longer cover, even though it is not worked. Thirdly, and most significant of all, the employer would then need to pay another employee to come in and cover the shift. In effect, the employer is paying twice for the same shift, on top of sick pay. That is not just inconvenient; it is, for many small businesses, financially unviable.
Let us take a common example of a pub with a garden space, with staffing that depends very much on the weather forecast. If rain is expected, the manager may need to scale back staffing. Under these rules, they may be required to pay the original shift, notify the worker within a fixed timeframe and compensate them if notice is too short. These decisions are often necessarily made on the morning of a shift, based on changing conditions. The flexibility that currently exists, therefore, is lost and replaced with what amounts to bureaucratic process and financial risks.
These are not hypothetical scenarios. In hospitality and retail, rotas are often agreed through informal co-operation: workers swapping shifts with each other, or managers responding to customer demand or staff illness in real time. What the Government now propose would stifle that practical environment, replacing it with a rigid system that suits neither party. Yes, we of course support the principle of fair notice, but fairness must apply to both sides. Businesses need clarity, practicality and financial sustainability; workers need predictability and respect. These goals, surely, should not be mutually exclusive. They will be undermined, not advanced, by unclear obligations and rules that are unworkable. That is why we support a clearer, more defined approach to notice periods: one that will give employers confidence, support workers’ rights and reflect the real dynamics of modern shift work.
Lord in Waiting/Government Whip (Lord Leong) (Lab)
My Lords, I am grateful to the noble Lords, Lord Ashcombe and Lord Hunt of Wirral, for their contributions and I thank the noble Lord, Lord Goddard of Stockport, for tabling Amendments 10 and 11.
The Bill currently sets out that eligible workers will be entitled to a payment when their shifts are cancelled, moved or curtailed at short notice. Setting the short notice period for cancellation at 48 hours, as stated in the amendment, would mean that only workers whose shifts are cancelled less than 48 hours prior to starting will receive payments for short notice. Our analysis showed that 2.4 million workers could be eligible for zero-hours contract rights. Furthermore, analysis from the CIPD—the Chartered Institute of Personnel and Development—suggests that approximately 48% of the UK’s employers do not provide compensation to a worker if they cancel their shift with less than 24 hours’ notice. The Government remain concerned about the impact that this may have on an individual’s ability to plan their life—as we all do—and knowing what money they will have for fundamental things such as housing costs, travel and paying for childcare and commuting.
We intend to set up the period of short notice in regulations following consultation. I recommend that all noble Lords read our road map for implementing this Bill, which sets out exactly what we intend to do. However, we have said in the Bill that “short notice” will not be more than seven days. The Government are committed to continuing to work closely with businesses and trade unions in carefully considering the right approach to this matter. It is right to consult on this in order to fully establish the impact of different proposals. For example, a 48-hour requirement could have the effect of a worker not being entitled to a payment if they found out late on a Friday evening that their Monday morning shift was cancelled. The impact and fairness of different options must be assessed.
We believe that seeking views on this and setting out the position in regulations is the right approach. This will allow the Government to minimise the amount of administrative detail in the Bill, while retaining the flexibility to respond to changing circumstances, in the light of the novel nature of this measure, without the need for further primary legislation. This approach also allows the Government to account for other important provisions in the Bill, such as a potential super-short notice period, without pre-empting consultations, so decisions can be taken together.
It is worth emphasising that a short notice cancellation period will only be due when the employer cancels a shift. A payment would not be due if a worker called in sick. Noble Lords should also be aware that there is a power in the Bill to make exceptions under new Section 27BR so, in some circumstances, an employer would not be required to make any payment.
The Government cannot promise to cover all the circumstances that have been raised by noble Lords, as we are keen to further engage with stakeholders before making the final call, but we hope this provides some reassurance. Further, Amendment 10 is not needed, as the Bill already provides that payment is due only where short notice is given, and therefore payment is not due when longer notice is given.
In response to the question from the noble Lord, Lord Goddard, about business uncertainty, I can safely say to him that we are in regular contact with business representative organisations. Businesses know about our implementation road map, so they know when certain provisions in the Bill will come into force. This particular section of the Bill does not come in until 2027.
I turn to reasonable notice, asked about by the noble Lords, Lord Ashcombe and Lord Hunt. After consultation, we will set in regulations what period of notice should be presumed unreasonable. We will also set out factors for tribunals to take into account when considering whether a notice is reasonable. On this basis, I ask the noble Lord, Lord Goddard, to withdraw his amendment.
Lord Goddard of Stockport (LD)
I thank the Minister for making another manly fist of that defence from the Government. I genuinely think that they are doing their best. I have met Ministers in this House many times, and I get the feeling that they are dealing with one hand tied behind their back. There are people in the other place who have a different agenda than this revising Chamber, which has tried to make something more fair, honest and transparent than perhaps what has come from the other place. I feel for the Minister in trying to pass that to us. However, there are far wiser minds than mine in this Chamber today, and they can see the blindingly obvious: the number of people looking to us to ensure that the Bill is treated with respect and clarity.
As we say up north, what is in the tin is what it says on the front of the tin, and that has to be that people are protected. With this 48-hour short notice, we are dancing on the head of a pin. Why do the Government not just accept this as a starting point and move forward? This would remove doubt and worry, not for the big companies—the Nexts of this world—but for the small companies employing five, 10, 15, 20 or 25 people, which are now are in limbo again because it is all about legislation coming in 2026, 2027 and 2028. They need to know and plan now. They cannot afford an HR department or lawyers; they just want to run companies, make modest profits and employ people. I thought that was the name of the Bill: it is an employment law working in partnership to deliver benefits for all. On that basis, I wish to test the will of the House.
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
I understand that it has been agreed that Amendment 11 is consequential on Amendment 10.
Amendment 11
Lord Goddard of Stockport
Member’s explanatory statement
This amendment and another in the name of Lord Goddard defines “short notice” as at least 48 hours before a shift is due to start, and clarifies that if this notice is given, the employer will not be required to make a payment under section 27BP.
“(b) must propose terms and conditions of employment relating to pay that comply with paragraph 2A, and(c) must propose terms and conditions of employment relating to additional matters—(i) that, taken as a whole, are no less favourable than the terms and conditions relating to additional matters that the qualifying agency worker had when working for and under the supervision and direction of the hirer during the relevant reference period,”Member’s explanatory statement
This amendment is consequential on my amendment to Schedule 1 that inserts a new paragraph 2A into new Schedule A1 to the Employment Rights Act 1996.
“(7A) For the purposes of sub-paragraphs (6)(b)and (7B), terms and conditions of employment relate to “pay” if they relate to any sums payable to a worker in connection with the worker’s employment, including any fee, bonus, commission, holiday pay or other emolument referable to the employment, whether payable under contract or otherwise.(7B) For the purposes of sub-paragraph (6)(c), terms and conditions of employment relate to “additional matters” if—(a) they are not terms and conditions that are required by or under sub-paragraphs (1) and (2) or sub-paragraphs (1) and (4);(b) they do not relate to length of employment;(c) they do not relate to pay.”Member’s explanatory statement
This amendment is consequential on my amendment to Schedule 1 that inserts a new paragraph 2A into new Schedule A1 to the Employment Rights Act 1996.
“Requirements relating to a guaranteed hours offer: terms and conditions relating to pay
2A (1) Terms and conditions of employment relating to pay that are proposed by a guaranteed hours offer made by a hirer to a qualifying agency worker in respect of a relevant reference period comply with this paragraph if any of conditions A to D is met in relation to those terms and conditions.(2) Condition A is that the terms and conditions of employment relating to pay are no less favourable than the most favourable terms and conditions relating to pay that the qualifying agency worker had when working for and under the supervision and direction of the hirer during the relevant reference period.(3) Condition B is that—(a) the terms and conditions of employment relating to pay do not meet condition A but are no less favourable than the least favourable terms and conditions relating to pay that the qualifying agency worker had when working for and under the supervision and direction of the hirer during the relevant reference period, and(b) the proposal of those terms by the hirer constitutes a proportionate means of achieving a legitimate aim. (4) Condition C is that the terms and conditions of employment relating to pay are no less favourable than—(a) where there was only one comparable worker in relation to the qualifying agency worker at the end of the relevant reference period, the terms and conditions of employment relating to pay that the comparable worker had at the end of that period, or(b) where there was more than one such comparable worker, the most favourable terms and conditions of employment relating to pay that a comparable worker had at the end of the relevant reference period.(5) Condition D is that, where there was more than one comparable worker in relation to the qualifying agency worker at the end of the relevant reference period—(a) the terms and conditions of employment relating to pay do not meet condition C but are no less favourable than the terms and conditions of employment relating to pay that at least one comparable worker had at the end of the relevant reference period, and(b) the proposal of those terms by the hirer constitutes a proportionate means of achieving a legitimate aim.(6) If a hirer relies on any of sub-paragraphs (3) to (5) when making a guaranteed hours offer to a qualifying agency worker, the hirer must give a notice to the qualifying agency worker that—(a) states that the hirer has done so, and(b) where sub-paragraph (3)(b) or (5)(b) applies, explains how the proposed terms and conditions constitute a proportionate means of achieving a legitimate aim.(7) A notice under sub-paragraph (6) must be given by no later than the same day, and in the same form and manner, as the guaranteed hours offer (see paragraph 2(8)).(8) For the purposes of this paragraph a worker is a “comparable worker”, in relation to an agency worker who works for and under the supervision and direction of a hirer, if—(a) the worker is employed by the hirer to do the same or broadly similar work as the agency worker, having regard, where relevant, to whether the worker and the agency worker have a similar level of qualification and skills, and(b) the worker is employed by the hirer to work at the same place as the agency worker or, where there is no worker employed by the hirer at that place who does the same or broadly similar work as the agency worker, at any other place.(9) Paragraph 2(7A) (when terms and conditions of employment relate to pay) applies for the purposes of this paragraph as it applies for the purposes of paragraph 2(6)(b) and (7B).(10) References in this paragraph to terms and conditions relating to pay that an agency worker had when working for and under the supervision and direction of a hirer are references to any sums payable to the agency worker in connection with that work, including any fee, bonus, commission, holiday pay or other emolument referable to the work, whether payable under contract or otherwise.”Member’s explanatory statement
This amendment inserts a new paragraph into new Schedule A1 to the Employment Rights Act 1996. It sets out requirements for the terms and conditions of employment relating to pay that are proposed by a guaranteed hours offer made by a hirer to a qualifying agency worker.
Member’s explanatory statement
This amendment is consequential on my amendment to Schedule 1 that inserts a new paragraph 2A into new Schedule A1 to the Employment Rights Act 1996.
Member’s explanatory statement
This amendment is consequential on my amendment to Schedule 1 that inserts a new paragraph 2A into new Schedule A1 to the Employment Rights Act 1996.
Member’s explanatory statement
This amendment is consequential on my amendment to Schedule 1 that inserts a new paragraph 2A into new Schedule A1 to the Employment Rights Act 1996.
Member’s explanatory statement
This amendment is consequential on my amendment to Schedule 1 that inserts a new paragraph 2A into new Schedule A1 to the Employment Rights Act 1996.
“(5) Paragraph 2(7B) (when terms and conditions of employment relate to additional matters) applies for the purposes of this paragraph as it applies for the purposes of paragraph 2(6)(c).”Member’s explanatory statement
This amendment is consequential on my amendment to Schedule 1 that inserts a new paragraph 2A into new Schedule A1 to the Employment Rights Act 1996.
Member’s explanatory statement
This amendment clarifies that, where the power in paragraph 4(6) of new Schedule A1 to the Employment Rights Act 1996 is exercised so as to make provision for the duty in paragraph 1(1) not to apply, the exception will operate in relation to a reference period. It is equivalent to my amendment to clause 1, page 9, line 34.
“(6A) In exercising the power under sub-paragraph (6) the Secretary of State must, in particular, have regard to—(a) the benefit to agency workers of receiving a guaranteed hours offer under this Part of this Schedule, and(b) the desirability of preventing this Part of this Schedule from having a significant adverse effect on hirers who are dealing with exceptional circumstances.”Member’s explanatory statement
This amendment sets out a non-exhaustive list of matters that the Secretary of State must have regard to in exercising the power in paragraph 4(6) of new Schedule A1 to the Employment Rights Act 1996. It is equivalent to my amendment to clause 1, page 9, line 36.
“(3A) Where, by virtue of sub-paragraphs (2) and (3), a qualifying agency worker and a hirer are treated as entering into a worker’s contract on a day, and accordingly from that day the qualifying agency worker becomes a worker and the hirer becomes that worker’s employer, Chapter 2 of Part 2A applies in relation to that worker and that employer as if in section 27BA (employer’s duty to make a guaranteed hours offer) subsections (4)(a) and (5) (which provide for the initial reference period to be a reference period and define the initial reference period) were omitted.”Member’s explanatory statement
This amendment produces the effect that where a qualifying agency worker accepts a guaranteed hours offer from a hirer under Part 1 of new Schedule A1 to the Employment Rights Act 1996, so that (respectively) they become a worker and an employer for the purposes of new Chapter 2 of Part 2A of that Act, there will not be a new initial reference period in relation to the former agency worker.
Lord Sharpe of Epsom
“(3A) For the purposes of this Chapter, references to a “relevant collective agreement” shall be treated as including an agreement in writing between an employer and an employee representative body or staff association that—(a) has been formally established for the purposes of consultation or negotiation with the employer,(b) represents either a defined group of the employer’s workers or the workforce generally, and(c) operates independently of the employer in its decision-making.”Member’s explanatory statement
This amendment ensures that, for the purposes of this Chapter, agreements made with independent employee representative bodies or staff associations — where formally constituted and independent — may be treated as equivalent to collective agreements.
Lord Sharpe of Epsom (Con)
My Lords, I will speak to Amendments 24 and 25 standing in my name and that of my noble friend Lord Hunt of Wirral. As we highlighted in Committee, the Government appear to hold an implicit bias in favour of the trade unions, as though they are the only legitimate bodies capable of making rational decisions on behalf of workers. That is clearly not the case. One needs only to look at the chaos of the Birmingham bin strikes to see that unions are not always acting in the best interests of employees, and nor are they always representative of them.
In Committee, during the debate on Clause 5, the noble Baroness, Lady O’Grady, remarked that
“the whole point of a trade union is that it is a democratic organisation of working people”.—[Official Report, 8/5/25; col. 1744.]
If that is so, surely workers should be free to choose whether to be represented by a union or by another independent body—choice is the essence of workplace democracy. If the noble Baroness and the Government are so committed to democratic representation, I wonder whether she also supports the Government’s proposal to remove the 50% ballot threshold for strike action—a move that clearly undermines democratic standards rather than upholding them.
On Amendment 25, the law must have no gaps, no shadows and no hiding places where the old habits of industrial bullying can take root and flourish. Every loophole we leave open becomes a wound in the body politic of free employment. Every ambiguity we permit becomes a tool for those who would turn the noble art of collective bargaining into a weapon of exclusion. That is why I speak in support of this amendment and why I urge the Government not to dismiss it on the tired ground that closed shops are already unlawful.
Yes, closed shops are illegal on paper, but we are not here to legislate for the perfect world of statutory textbooks; we are here to legislate for the real world and, in the real world, pressure to join a union can exist. This amendment simply states what most of us would regard as common sense: that no worker should be treated differently under a collective agreement based solely on their union membership status. It would prohibit making membership a condition for the agreement’s terms to apply. It would ban imposing any disadvantage on non-members and prevent contract terms being automatically imported purely because someone happens to hold a union card. In other words, it restores balance. It would ensure that collective agreements function as they ought to—as negotiated protections for the workforce—not as a gatekeeping tool for union organisers. It does not therefore weaken unions; it strengthens fairness. I beg to move.
Lord Jackson of Peterborough (Con)
My Lords, I will speak very briefly to Amendment 25 in the name of my noble friend Lord Sharpe of Epsom. I reiterate his key point that the imperative is to make it clear that the closed shop is not coming back and that the Government are committed to free but fair bargaining.
Let us remember that the closed shop has never actually been that popular. In the United States, the Taft-Hartley Act of 1947 outlawed the closed shop, and in the UK—even before I was born—in 1964 Rookes v Barnard involving the British Overseas Airways Corporation began the fightback against the closed shop when that organisation sacked a worker who refused to join a trade union. As noble Lords will know, in effect the closed shop was made illegal by the Employment Act 1990 and the Trade Union and Labour Relations (Consolidation) Act 1992.
The fact that we accept that the closed shop is damaging and an anachronism is, as much as anything, a reflection of the different working regimes in which the 40-odd million working people, or potentially working people, in this country exist. The closed shop was very much of a time when heavy manufacturing, manual labour and a heavily unionised workforce were prevalent, and that is now different. The working environment of young people particularly is a much more modern, diverse, dynamic and disaggregated labour market where the closed shop is a throwback and an anachronism.
There are good reasons why it is important to put in primary legislation that even this Government—who are legislating in a very negative way, which will cost jobs and opportunities and force people not to hire workers—will not go back to the bad old days of the 1970s and institute a closed shop. Labour market flexibility is reduced by the closed shop because the capacity of employers to employ the best-qualified candidates—regardless of union membership—is reduced. That inevitably leads to a misallocation of labour resources, higher business costs, higher prices and, ipso facto, a lower number of jobs.
Baroness Lawlor (Con)
My Lords, I support Amendment 25 in particular, although I also support Amendment 24. This is about the freedom to be represented by people who represent you and your stance. Only 22% of employees in this country belong to a trade union, so surely it is right, as my noble friends Lord Sharpe of Epsom and Lord Hunt propose, that a relevant collective agreement for the purposes of Clause 5 will be invalid unless it is open to being struck with a body which is independent of a trade union and which is not just a trade union. Given that many workplaces, particularly small businesses, do not have trade union representatives and some 80% of employees do not belong to a trade union, there really is not a case, in terms of freedom, for restricting who should conduct the collective bargaining. It is important to send a signal that we believe in a free workforce and respect the freedom of working people to join, or not to join, a trade union.
Baroness Jones of Whitchurch (Lab)
My Lords, I have listened to the noble Lord, Lord Sharpe, and his explanation for Amendments 24 and 25, and note that these are similar to the amendments he tabled in Committee, but with some of the safeguards and requirements removed. While I respect the noble Lord’s views in this area, I feel this is going in the wrong direction. Staff associations and employee representative bodies can of course be a very positive way for staff and employers to engage. However, we are not convinced they are the suitable vehicle for deciding whether to modify or opt out of statutory employment rights. While many maintain a good balance between positive engagement and constructive challenge, we are not persuaded that they will, in all cases, argue as robustly as a trade union on behalf of workers. In addition, without a trade union representing them, workers will not have as many protections if their employer does not deliver promised benefits.
This is nothing to do with a closed shop or industrial bullying. Under our proposals, employees will continue to have the right to be, or not to be, a member of a trade union. The issue here is the right to be represented by a body that is truly independent. We remain of the view that agreements of this type are best made by trade unions which have been through all the steps to become listed and certified as independent. I would encourage any staff association or employee representative body that wants to negotiate on behalf of its members to register as a trade union and go through the steps to obtain a certificate of independence from the certification officer.
The second part of the noble Lord’s amendment sets out that a relevant collective agreement shall not be treated as valid if it meets conditions such as imposing detriment or disadvantage on a worker who is not a member of a trade union and terms being incorporated into a worker’s contract solely by reason of union membership status. We believe that these provisions are unnecessary. The Trade Union and Labour Relations (Consolidation) Act 1992 already provides sufficient protection by ensuring that workers cannot be subject to detriment for the purpose of compelling them to join a trade union. Furthermore, the application of the terms of collective agreements to workers generally depends on incorporation of them into their contracts, either expressly or by implication, in line with well-established contract law, rather than on the basis of a trade union membership.
I turn to Amendments 26 and 27 in my name. Currently, when the terms of a collective agreement cease to be incorporated, the worker’s initial reference period and initial information period recommence the next day. However, in some cases, there could be quite a gap between these terms ceasing to be in force and the worker next being employed by the employer to work. We heard the strength of feeling around business burden in Committee and, where it is possible to make tweaks, we will do so. In this case, we believe it makes more sense for the reference period to start the next time the worker is employed by the employer. This avoids businesses having to consider making a guaranteed-hours offer before it is sensible and necessary to do so.
We are also tabling a minor and technical amendment to new Section 27BY(8) to reflect that the duty relating to the information right in the existing provisions will be on agencies to inform potential eligible agency workers about the right to guaranteed hours in any relevant information period.
Finally, Amendment 27 ensures that the zero-hours measures in the Bill apply as appropriate to special categories of workers. This follows a long-standing precedent that these categories of workers should be treated as distinct, as they do not have a typical employment relationship or undertake a unique type of work. In line with this precedent, the amendment ensures that House of Commons and House of Lords staff, Crown employees and mariners benefit from the crucial protections the Bill provides on zero hours. It also ensures that duties made under provisions in the Bill do not apply where this would not be appropriate; namely, in relation to service personnel in the Armed Forces and police officers. I therefore ask the noble Lord to withdraw Amendment 24 and commend Amendments 26 and 27.
Lord Sharpe of Epsom (Con)
I first thank my noble friends Lord Jackson of Peterborough and Lady Lawlor for their comments. Employee representation must be plural and not monopolised by trade unions. There are many workplaces across the country where independent staff associations or employee bodies are trusted, respected and effective. These organisations are not lesser simply because they are not unions. In fact, they are often more in tune with their colleagues’ needs, less politicised and more flexible in resolving workplace issues—yet disappointingly, the Minister says they are not “suitable”.
The idea that only a union can be trusted to negotiate terms is a fiction—we just have to look at Birmingham to see the results of that belief. This amendment simply recognises reality: that employee voices come in many forms and the law should not shut out legitimate and independent associations.
Secondly and just as crucially, we cannot allow this legislation to leave space for any form of closed shop, not in name or in practice. It is true of course that compulsory union membership is already unlawful, as the Minister pointed out, but this amendment would ensure that there were no back doors. We do not think the law should have any ambiguity on this. No agreement should ever impose a detriment on a worker simply because they choose not to join a union, and as my noble friend Lady Lawlor pointed out, the majority choose not to—in fact, in the private sector, I think that the proportion who choose not to join a union is 87.7%. No terms should be granted only by virtue of membership. That is not freedom; that is coercion.
We therefore say again that collective bargaining should not become collective exclusion. These amendments would uphold freedom of association in both directions: the right to join and the right not to, but for now, I beg leave to withdraw the amendment.
“(b) in relation to a worker and the worker’s employer—(i) section 27BA(5)(a) has effect as if for sub-paragraphs (i) and (ii) there were substituted—“(i) where the worker is employed by the employer on the day (“the effective day”) after the day on which terms cease to be incorporated as mentioned in section 27BY(7)(b), the effective day, or(ii) where the worker is not so employed, the first day after the effective day on which the worker is employed by the employer, and”, and(ii) section 27BF(3) has effect as if for paragraphs (a) and (b) there were substituted—“(a) where the worker is employed by the employer on the day (“the effective day”) after the day on which terms cease to be incorporated as mentioned in section 27BY(7)(b), the effective day, or(b) where the worker is not so employed, the first day after the effective day on which the worker is employed by the employer.”,(c) in relation to an agency worker and a hirer for and under the supervision and direction of whom the agency worker works, paragraph 1(5)(a) of Schedule A1 has effect as if for sub-paragraphs (i) and (ii) there were substituted—“(i) where the agency worker is working for and under the supervision and direction of the hirer on the day (“the effective day”) after the day on which terms cease to be incorporated as mentioned in section 27BY(7)(b), the effective day, or(ii) where the agency worker is not so working, the first day after the effective day on which the agency worker is working for and under the supervision and direction of the hirer, and”, and(d) in relation to an agency worker and the work-finding agency with which the agency worker has a worker’s contract or an arrangement by virtue of which the agency worker is (or is to be) supplied to work for and under the supervision and direction of a hirer, paragraph 6(3) of Schedule A1 has effect as if for paragraphs (a) and (b) there were substituted—“(a) where the worker’s contract or arrangement is in force on the day (“the effective day”) after the day on which terms cease to be incorporated as mentioned in section 27BY(7)(b), the effective day, or(b) where it is not in force on the effective day, the first day after the effective day on which it is in force.””Member's explanatory statement
This amendment ensures that the gloss in new section 27BY(8) of the Employment Rights Act 1996 operates effectively.
“18A In section 192 (armed forces), in subsection (2)(e), after “103” insert “, 104BA, 104BB”.18B (1) Section 194 (House of Lords staff) is amended as follows.(2) After subsection (2)(a) insert—“(aza) Part 2A, apart from Chapter 1 of that Part,”.(3) In subsection (2)(c), for “and 47E” substitute “, 47E and 47H”.18C (1) Section 195 (House of Commons staff) is amended as follows.(2) After subsection (2)(a) insert—“(aza) Part 2A, apart from Chapter 1 of that Part,”.(3) In subsection (2)(c), for “and 47E” substitute “, 47E and 47H”.18D (1) Section 199 (mariners) is amended as follows.(2) In subsection (8), for paragraph (b) substitute—“(b) Part 2,(bza) Part 2A, apart from Chapter 1 of that Part,(bzb) Parts 2B, 3 and 5,”.(3) After subsection (8) insert—“(9) In the application of subsection (7) to the provisions mentioned in subsection (8)(bza), the reference in subsection (7)(b) to a contract of employment is to be read as a reference to a worker’s contract.”18E In section 200 (police officers), in subsection (1)—(a) after “8 to 10,” insert “Chapters 2 to 4 of Part 2A,”;(b) after “47C,” insert “47H,”.”Member's explanatory statement
The paragraphs inserted into Schedule 2 by this amendment make amendments of Chapter 1 of Part 13 of the Employment Rights Act 1996 (particular types of employment) that are consequential on clauses 1 to 5.
Lord Hunt of Wirral
“(b) in subsection (2), for “four” substitute “two”.”Member's explanatory statement
This amendment preserves a minimum one-day waiting period for statutory sick pay, by reducing the qualifying threshold from four days to two, rather than introducing a day-one entitlement.
Lord Hunt of Wirral (Con)
My Lords, Amendment 28 simply asks for a degree of common sense. It would preserve a minimum one-day waiting period for statutory sick pay by lowering the qualifying threshold from four days to two, rather than removing the threshold entirely, as the Government now propose.
We have heard a great deal from the Benches opposite about bad employers, and indeed there are some, but the Government must also acknowledge the other side of the coin. Just as some employers abuse the system, so, too, do some employees. To pretend otherwise is disingenuous and undermines the credibility of the entire framework.
In fact, before the Government’s recent and embarrassing U-turn on benefits reform, Ministers rightly spoke about the perverse incentives created by aspects of the welfare system. The logic there was sound, and the same logic applies here. If we remove all barriers to claiming statutory sick pay, even for a single day, and do so without checks or balances, we create a system that is not only vulnerable to abuse but risks becoming a disincentive to return to work.
Let me be absolutely clear. This is not about denying support to people who are genuinely unwell. It is about preserving the integrity of statutory sick pay so that it remains sustainable, trusted and workable for businesses, particularly small ones. A one-day waiting period is a modest safeguard, not a punishment. It would discourage spurious claims, uphold personal responsibility and give smaller employers a fighting chance in a tight and unpredictable labour market.
Baroness Noakes (Con)
My Lords, I support Amendment 28, which has been so well moved by my noble friend Lord Hunt of Wirral. My main problem with the statutory sick pay clauses in this Bill is that the Government are proceeding without a reliable evidence base. The Government do not collect data on sick leave taken by employees. Instead, they have relied on some modelling by the Department for Work and Pensions, and that modelling in turn rests on some surveys that are carried out by the DWP. Those surveys have some problems, which the DWP itself owns up to, in terms of statistical quality. The Office for National Statistics also published some data on sickness absence. These data are labelled “statistics in the course of development”, and we all know that the ONS currently has major problems with its labour market statistics.
Nevertheless, the Government have used these data and made some challengeable assumptions of their own, such as that there will be no increase in sickness days taken off if the changes in Clauses 10 to 14 go ahead. They have come up with an additional cost to business of £420 million, which they then calculate as £15 per employee. I do not think that £15 passes the common-sense test. It implies that employers will bear the cost of not much more than an extra half a day of statutory sick pay at the rate that is specified in the Bill.
Part of the problem is that the Government’s calculations average those costs over 24 million employees, which is roughly the size of the whole private sector workforce. Within that, nearly a half of employees are employed in large businesses, many of which have their own sick pay arrangements and do not rely on the statutory sick pay arrangements that my local friend Lord Hunt outlined. I tried to find the complete set of costs for small and micro businesses. It looks as if the costs for the smaller end of the scale of businesses are roughly double the amount per employee, but it is very difficult to tie it down, because the dataset is incomplete—certainly the one that is available in public. As my noble friend has already pointed out, the Government’s own assessment has owned up to the fact that these costs will disproportionately bear on small and micro businesses.
Even if we double the £15 per employee to £30, I am not sure that even that is a realistic estimate of the costs that will fall on individual businesses, because it amounts to just a bit over a day of statutory sick pay at the new rate in the Bill. That does not seem to me to make any sense at all. The Government should have done proper studies of current sickness patterns and costs for the various businesses that are affected by these clauses before going ahead. In particular, I believe that the costs to small and micro businesses should have been evaluated before the clauses were proceeded with. The only thing that we know for sure about these clauses is that the impact on small and micro businesses will be disproportionately large.
However, I recognise that the Government would probably have gone ahead with these provisions even if they had gold-standard data and analysis, and even if that analysis showed that the cost was 10 times the amount that the Government currently estimate. That is the reason I support my noble friend’s Amendment 28, with a one-day waiting period and a qualifying threshold of two days, which would go some way towards reducing the impact on smaller firms. Survey data shows that nearly 60% of sickness absences are for one or two days. The small change that my noble friend’s amendment seeks could have a major impact on businesses and the bureaucratic burdens that they would have to bear.
I support Amendment 30, which would reintroduce a statutory sick pay scheme. I would have confined it to small and micro businesses, because that is where the greatest harm is, but, in this uncertain economic environment, with costs being piled on businesses in all directions, businesses deserve protection from the Government’s policies. For that reason, I support Amendment 30.
Baroness Coffey (Con)
My Lords, I have added my name to Amendment 30, tabled by the noble Lord, Lord Goddard of Stockport, which builds on something that I raised in Committee. I have been asked to do a statement for the Covid inquiry regarding the economic response and so have been going through a variety of notes from five years ago. One of the most successful things that we did then was to support employers in the deployment of statutory sick pay by ensuring that people could stay at home and not be spreading coronavirus at work.
For me, that reinforced something that made sense for the country as a whole and its public health and was fair. It was fair to businesses that, while the country was being asked to do something and they were being asked to do something as employers, the Government helped with the cost.
Part of this entire debate is the fair work agency and it being fairer for employees—and apparently it will be fairer for employers, around productivity. I do not want to repeat all that I have said on this but I recall that, when there used to be a rebate, it was recognised that this was the bare minimum, with many employers paying a lot more than the statutory sick pay rate. It was about co-working and recognising that, as a mature country, we believe that people should continue to be paid when they are off ill, and that the Government have an interest in that too. That is why I was particularly keen to sign Amendment 30, although I am conscious that some of its finer details could be worked out further.
Amendment 28 was tabled by my noble friends on the Front Bench. Of the variety of changes that are happening through this Bill—many of which, I remind the House, could have been done through statutory instruments—statutory sick pay from day 1 has come up time and again with most of the employers that I have met or heard from. The impact is genuinely worrying, particularly for people in the hospitality sector, the retail sector and so on. Going straight to day 1 is a step too far backwards. That is why I am supporting my friends on the Front Bench.
Baroness Fox of Buckley (Non-Afl)
My Lords, in the evidence and analysis document that the Government very helpfully gave us last week, it notes that up to 1.3 million employees will get a new entitlement to statutory sick pay and that that will increase the amount of sick pay that workers receive by around £400 million a year. At face value, this is in many ways a very positive step forward. However, that same document brought up some cultural issues. I would like the Minister to reflect on whether day 1 statutory sick pay will help to tackle those issues.
The document notes that
“stress, depression or anxiety accounted for 17.1 million working days lost in 2022/23, equivalent to a loss of £5.2bn in output per year”.
Is there a danger that an unintended consequence of day 1 sickness pay would be people being encouraged to too easily see themselves as not fit for work? Can the Minister answer that? The same document says that:
“Measures to improve worker wellbeing will result in happier, healthier and more productive workers, which could be worth billions of pounds a year”.
That seems rather far-fetched. It might mean that people will more easily go on the sick, not because they are shirkers but because we are creating a culture where that is the norm.
Lord Goddard of Stockport (LD)
My Lords, I will speak on the important topic of statutory sick pay, particularly in relation to amendments in this group. I thank the noble Baroness, Lady Coffey, for signing the amendment. I listened to her very closely in Committee; she may have got a flavour of what I am about to say, because she has an excellent overview of these matters, and I think the House does listen. I also thank the noble Baroness, Lady Noakes, for her forensic examination of the financial cost, which should never be underestimated—these things are emotional, but there are costs to anything that anybody does. It is important that we understand where the balance lies.
I will speak predominantly to my Amendment 30, which is a probing amendment. We recognise that there are challenges in creating a two-tier employment system with different obligations depending on business size. For that reason, we will not press for a Division on this amendment. However, this amendment highlights the importance of recognising the potential impact that this might have on small and medium-sized enterprises due to the costs that they incur from statutory sick pay. SMEs form the backbone of our economy. It is essential that government policy takes full account of the financial pressures that businesses face.
Expanding statutory sick pay is an important and welcome goal, but it must be done with careful consideration of how the additional costs affect the viability and growth prospects of SMEs. That is why meaningful consultation with these businesses throughout the implementation process is critical. The Government should actively engage with SMEs to ensure that their concerns are understood and addressed, so that any changes to statutory sick pay are substantial and do not inadvertently place undue burdens on the very common businesses and people who are trying to drive the economy.
I will ask the Minister to confirm that, as the Government continue their thorough consultation as part of the implementation of the Bill, they do so directly and in close alignment with small and medium-sized businesses, not during the passage of the Bill but throughout its full implementation. Can the Minister provide reassurance that SMEs’ voices will be heard, and their concerns addressed, as the policy is rolled out? Because it is only through partnership with the SME community that we can ensure the statutory sick pay system is both fair for workers and sustainable for business. I look forward to the Minister’s response.
Baroness Jones of Whitchurch (Lab)
My Lords, I thank all noble Lords who have contributed. I will start with Amendment 28, which looks at retaining the waiting period for one day. The Government believe that removing the waiting period is essential in ensuring that all eligible employees can take the time off work they need to recover when sick. That is why we committed to it in the manifesto. This is particularly true for employees with long-term or fluctuating conditions, who should feel able to take a day of sickness absence to manage their condition or prevent it worsening. The noble Lord, Lord Hunt, said that the one-day waiting period that he was proposing should not be a punishment, but that is exactly what it would be under the proposals before us.
It is also worth saying that 25% of all employees receive only statutory sick pay, and many are forced to choose between their health and the genuine financial hardship during the first three days of sickness absence when they are not paid. Removing the waiting period will make a tangible difference to ensuring that the safety net for sick pay is available to those who need it most.
I understand that the noble Lord is concerned about the wider impacts on businesses of these changes, but, without the removal of the waiting period, many employees will be forced to continue to come into the workplace when they are sick. The pandemic exposed how damaging this can be for businesses and individuals, with WPI economic modelling telling us that presenteeism can lead to up to 12% of the workforce becoming sick from the illness of a single employee. By reducing such presenteeism, businesses may benefit from the overall productivity increase, which can also contribute to a positive work culture that better helps recruit and retain staff.
Of course, as we have debated before, employers will need to manage sickness absence, as they do at the moment. I listened to the noble Baroness, Lady Fox, on the cultural issues, and, yes, some of the things she identifies are real issues. We are addressing them across government, and she will have heard many of my ministerial colleagues set out how they plan to do that. But that does not alter the fact that, in this Bill, what we are proposing makes good sense for the lowest paid.
I also remind noble Lords that the additional cost to business of the statutory sick pay reforms is about £450 million annually—a relatively modest £15 per employee. It was quite rightly pointed out that these figures were modelled by the DWP, but it does have a reasonable track record of doing such modelling, and I do not think that the figures should be dismissed.
Amendment 29 seeks to exempt employers from having to pay the rate of statutory sick pay outlined in Clause 11 if they already provide a contractual scheme that pays at least 80% of normal weekly earnings. The rate of statutory sick pay is set out in the Bill as the lower of 80% of an employee’s weekly earnings, or £118.75. This already means that no employer will have to pay more than 80% of an employee’s normal weekly earnings. Therefore, an employer already paying 80% of an employee’s weekly earnings would be compliant with the statutory minimum set out in the Bill. As such, I am unclear on the intended impact of this amendment on employees or employers, as it does not appear to change the statutory sick pay entitlement.
I turn to Amendment 30 in the name of the noble Lord, Lord Goddard, and I appreciate what he said about it being a probing amendment. As I have mentioned, the changes we are making to statutory sick pay will cost businesses around £15 per employee. This relatively modest amount compares with projected costs of up to £600 million a year to government of a rebate for the full amount of statutory sick pay for SMEs. I accept the arguments made by the noble Lord that this cost will of course depend on the size, scope and complexity of a rebate scheme. However, we have experience of administering such schemes. We previously delivered statutory sick pay rebate schemes such as the percentage threshold scheme. A review found that the employers underused it and found it was complex and time-consuming to administer. Any rebate system that maximises opportunity for business take-up, which I envisage would be the noble Lord’s intent in this amendment, would collectively be costly for the taxpayer as well, whereas the cost saving for individual employers would be small and a new administrative burden would be placed on them.
Previous statutory sick pay rebate schemes also did not incentivise employers to support their employees back to work or invest in their health and well-being. This, in turn, can affect overall productivity and staff retention. We know that employers have responsibility for paying sick pay, and that helps maintain a strong link between the workplace and the employee, with employers encouraged to support employees to return to work when they are able. I would also like to add that the Government have asked Sir Charlie Mayfield to lead the Keep Britain Working review, which will consider recommendations on how employers and the Government can work together to promote healthy and inclusive workplaces. A final report with recommendations is expected in the autumn.
I therefore do not believe that a rebate scheme is the best way to support our SMEs at this time, but, in response to the noble Lord, Lord Goddard, I say that of course we are continuing to have a dialogue with SMEs, and we take their concerns very seriously. I therefore ask the noble Lords, Lord Sharpe and Lord Goddard, not to press their amendments.
Lord Hunt of Wirral (Con)
My Lords, I would like to thank all noble Lords for their contributions to this important debate. I am particularly grateful to my noble friend Lady Noakes for reminding us all that one of the great difficulties we have in debating a subject such as this is the lack of a reliable evidence base, and that is particularly relevant to the debates on these amendments. The noble Baroness, Lady Fox of Buckley, quite rightly drew our attention to the unintended cultural issues, which worry us all so much and to which the Minister has just referred.
I remain wholly unconvinced by the Minister’s response when debating the removal of the waiting period for statutory sick pay. To remove any waiting period at all, and to introduce a day one entitlement without qualification, is not just a step too far but an unnecessary one. Having at least one waiting day does not undermine the Government’s stated intention to support those who are genuinely unwell. It is a modest safeguard that reflects the balance they claim to seek, and its removal creates perverse incentives at a time when we should be doing all we can to encourage people back into work.
On the issue of agency work and statutory sick pay, the Minister’s response is equally unconvincing. I did try to outline a scenario where individuals go off sick, claim SSP and then begin new assignments, while continuing to receive sick pay from another employer. I do not believe that the Minister adequately addressed that point. I suggest that perhaps we ought to put our heads together and try to find another solution. Having listened carefully to the debate, a system-wide mechanism, possibly administered by HMRC, to cross-check SSP claims across employers could serve as a much-needed safeguard. Perhaps she might reflect further on that on that idea, because I believe that such a mechanism would not target those with legitimate dual employment. We recognise that some workers genuinely hold more than one job in a given week, but it would introduce a basic layer of validation—a simple tool to distinguish between valid and dishonest claims. Without it, businesses, particularly small and agency employers, would remain exposed to fraudulent or inadvertent overclaims that could cost them thousands of pounds, all in the name of a policy that currently lacks real oversight.
I thank my noble friend Lady Coffey and the noble Lord, Lord Goddard of Stockport, for their important probing amendment. It has been a useful and interesting debate, but we still search for the solutions that will meet the problem. I urge the Government, in their phased consultation, to listen to businesses from across the board as they highlight their concerns. In the meantime, I beg leave to withdraw the amendment.
Lord Palmer of Childs Hill
“Kinship care leave(1) The Employment Rights Act 1996 is amended as follows.(2) After section 80EI insert—“Chapter 5AKinship care leave80EJ Kinship care leave(1) The Secretary of State must make regulations entitling an employee to be absent from work on leave under this section if the employee satisfies conditions specified in the regulations as to an eligible kinship care arrangement with a child.(2) The regulations must include provision for determining—(a) the extent of an employee’s entitlement to leave under this section in respect of a child;(b) when leave under this section may be taken. (3) Provision under subsection (2)(a) must secure that—(a) where only one employee is entitled to leave under this section in respect of a given child, the employee is entitled to at least 52 weeks’ leave;(b) where more than one employee is entitled to leave under this section in respect of the same child, those employees are entitled to share at least 52 weeks’ leave between them.(4) An employee is entitled to leave under this section only if the eligible kinship care arrangement is intended to last—(a) at least one year, and(b) until the child being cared for attains the age of 18.(5) For the purposes of this Chapter, “eligible kinship care arrangement” means—(a) special guardianship,(b) a kinship child arrangement,(c) a private fostering arrangement, or(d) a private family arrangement,within the meaning given by section (Meaning of “kinship care”) of the Employment Rights Act 2025.(6) The regulations may make provision about how leave under this section is to be taken.(7) In this section—(a) “special guardianship”, “kinship child arrangement”, “private fostering arrangement” and “private family arrangement” have the same meanings as in section (Meaning of “kinship care”) of the Employment Rights Act 2025.(b) “week” means any period of seven days.80EK Rights during and after kinship care leave(1) Regulations under section 80EJ must provide—(a) that an employee who is absent on leave under that section is entitled, for such purposes and to such extent as the regulations may prescribe, to the benefit of the terms and conditions of employment which would have applied but for the absence,(b) that an employee who is absent on leave under that section is bound, for such purposes and to such extent as the regulations may prescribe, by obligations arising under those terms and conditions (except in so far as they are inconsistent with subsection (1) of that section), and(c) that an employee who is absent on leave under that section is entitled to return from leave to a job of a kind prescribed by regulations, subject to section 80EL.(2) The reference in subsection (1)(c) to absence on leave under section 80EJ includes, where appropriate, a reference to a continuous period of absence attributable partly to leave under that section and partly to any one or more of the following—(a) maternity leave;(b) paternity leave;(c) adoption leave;(d) shared parental leave;(e) parental leave;(f) parental bereavement leave.(3) In subsection (1)(a), “terms and conditions of employment”—(a) includes matters connected with an employee’s employment whether or not they arise under the contract of employment, but(b) does not include terms and conditions about remuneration. (4) Regulations under section 80EJ may specify matters which are, or are not, to be treated as remuneration for the purposes of this section.(5) Regulations under section 80EJ may make provision, in relation to the right to return mentioned in subsection (1)(c), about—(a) seniority, pension rights and similar rights;(b) terms and conditions of employment on return.80EL Special cases(1) Regulations under section 80EJ may make provision about—(a) redundancy during or after a period of leave under that section, or(b) dismissal (other than by reason of redundancy) during a period of leave under that section.(2) Provision by virtue of subsection (1) may include—(a) provision requiring an employer to offer alternative employment;(b) provision for the consequences of failure to comply with the regulations (which may include provision for a dismissal to be treated as unfair for the purposes of Part 10).80EM Chapter 5A: supplemental(1) Regulations under section 80EJ may—(a) make provision about notices to be given, evidence to be produced and other procedures to be followed by employees and employers;(b) make provision requiring employers or employees to keep records;(c) make provision for the consequences of failure to give notices, to produce evidence, to keep records or to comply with other procedural requirements;(d) make provision for the consequences of failure to act in accordance with a notice given by virtue of paragraph (a);(e) make special provision for cases where an employee has a right which corresponds to a right under section 80EJ and which arises under the person’s contract of employment or otherwise;(f) make provision modifying the effect of Chapter 2 of Part 14 (calculation of a week’s pay) in relation to an employee who is or has been absent from work on leave under section 80EJ;(g) make provision applying, modifying or excluding an enactment, in such circumstances as may be specified and subject to any conditions which may be specified, in relation to a person entitled to take leave under section 80EJ;(h) make different provision for different cases or circumstances;(i) make consequential provision.(2) The cases or circumstances mentioned in subsection (1)(h) include—(a) more than one child being subject to the same eligible kinship care arrangement, and(b) a child being subject to an eligible kinship care arrangement on two or more separate occasions,and regulations may, in particular, make special provision regarding the applicability and extent of the entitlement to leave in such circumstances.(3) The Secretary of State may by regulations make provision for some or all of a period of kinship care leave to be paid.””Member’s explanatory statement
This amendment inserts provision which sets out an entitlement to kinship care leave.
Lord Palmer of Childs Hill (LD)
My Lords, Amendments 31 and 32 in my name relate to the often-ignored subject of kinship care. The amendments seek to introduce—at last—kinship care leave as a paid entitlement and to establish a legal definition of kinship care, which is something many people do not even think about. It is time to address the current lack of formal employment rights and protections for kinship carers.
It is long overdue that we legally recognise and reward the grandparents, aunts, uncles and other relatives who step in as carers. More than 130,000 children in the UK are in kinship care, which is, amazingly, three times the number who are in foster care. When family crises occur—and they do occur—it is often kinship carers who step up to the plate, preventing children from being swept up into the formal care system.
Amendments 31 and 32 would allow families breathing space in order to adjust and, most importantly, support the well-being of the child. Support of kinship care is cost effective, as it reduces pressure on an overtasked care system. It is time to be compassionate for everyone’s long-term benefits—and I may well ask your Lordships to vote on this at the end of the group.
The Government’s Amendment 34 extends bereavement leave to include pregnancy loss. I commend this amendment to the House.
We are not debating or voting on Amendment 97 now, because it has been degrouped. It is in the name of the noble Baroness, Lady Grey-Thompson, and gives a statutory right to paid leave for working parents who are forced to stop working to care for a critically ill child over 28 days old. This is described as Hugh’s law, after one who suffered in this way. I commend this amendment, which we will get to when we get to its degrouped place; it was originally in this group.
The other amendment in my name, Amendment 104, is on statutory carer’s leave. We owe a great deal to unpaid carers, who are the backbone of our society. Their support is worth a staggering £184 billion a year to older, ill or disabled relatives or friends—support without which society would collapse. The reality, however, is that this comes at a cost to them. Around 600 people a day give up work to care, and 1.2 million face poverty and financial hardship. Research shows that the majority do not have a choice about caring, because there are no care alternatives available. Employers are losing skilled labour every day because of caring, at a cost to their productivity. For some small employers, which we have spent a lot of time talking about, losing skilled workers can have an even bigger impact.
This amendment in my name would provide for the Government to publish regulations that would recompense employers, particularly small employers. There is insufficient social care and health services to plug the gap. Supporting carers to stay in employment is cost effective, and many carers have told Carers UK that they want to stay in work. Polling carried out by Carers UK found that 88% of unpaid carers of working age said that they needed paid carer’s leave.
The amendment that we brought forward in Committee has been refined, I hope for the better, having received comments from the Minister that the original drafting would have been different to that for other entitlements. We have therefore aligned the entitlements to pay for statutory carer’s leave with other similar statutory entitlements. This is very modest and yet would reflect a critical step forward for unpaid carers. The modest entitlement would normally be up to only five days of paid leave. It is described as a week, and a week is—amazingly—described as up to five days. This is how it is set out in the Carer’s Leave Act.
The Government could set the rate of statutory pay. The cost of statutory carer’s leave, based on estimates from Carers UK, is between £5 million and £32 million per annum. That is based on actual take-up rates of carer’s leave with employers. Centrica has two weeks of paid carer’s leave at full pay, with a further two weeks of matched leave. The Carers UK report says that just 3.4 days, on average, are taken by employees as carer’s leave. The Government’s estimate of the cost of carers’ inability to work is £37 billion. The personal cost is even greater if carers have to give up work, as they do, in order to care.
In advance of the Bill, Carers UK has been talking to carers about what paid carer’s leave would mean. One carer, who is a bus driver, has not had a holiday in seven years because of caring. He takes annual leave first, because it is paid, then unpaid leave if he has to. Work is extremely important to him, as he said that it “keeps him going” but that it is hard caring for two people without a break. He has been to his council, but does not get much support. He is still waiting, because the more trained care workers who his son needs are not available.
Another carer, who works in the NHS, is struggling to work and care, but she does not have paid carer’s leave. This leaves her burned out and exhausted, and she has to take her annual leave. We cannot afford to lose valuable NHS staff as a result of providing unpaid care. Paid carer’s leave is vital for those who cannot afford to take unpaid leave. What hope can the Government give to people like this who juggle every day and who need support such as paid carer’s leave, so that they can keep caring and working?
Will the Government go one step further and commit to building on the Carer’s Leave Act 2023 in introducing paid carer’s leave? Given that a parental leave review has been published for consultation and engagement, can the Minister tell the House what the Government’s message to unpaid carers and the review of carer’s leave are? Will the objectives, timetable, report and engagement be published? Carers are a valuable resource, but they are not appreciated. It is time that we in this House started appreciating them. I beg to move.
Baroness Coffey (Con)
My Lords, I speak to the two amendments that I have tabled. The loss of any foetus or potential child is a massive grief, and I entirely understand why this provision has been brought forward. My right honourable friend Jeremy Hunt commissioned the independent review into pregnancy loss several years ago, and a variety of actions have taken place, particularly in thinking of people with miscarriages. By law, a stillbirth is anything from 24 weeks onwards, but being able to register a birth such that, in effect, people who lose their foetus after 24 weeks can have a birth certificate in the same way was a good thing to do.
I am speaking today to try to get clarity on what the Government are proposing. If the Bill specifically mentioned miscarriage or ectopic pregnancy or molar pregnancy, I would not be speaking, although I would still want to get some understanding through Amendment 35. Perhaps I will start with that first.
I would be very grateful if the Minister could explain the new Section 80EA(3A)(b) of the Employment Rights Act 1996, to be inserted by Amendment 34. It says that a person is bereaved if
“the employee satisfies specified conditions as to relationship with … a person who has suffered a pregnancy loss … or … a child who had been expected to be born had a pregnancy loss of a specified kind not occurred”.
It would be useful to understand why it is not being put in the Bill who it is expected that this will extend to—I do not know whether it is the father, a donor, a sibling, a grandmother, a grandfather and so on. I completely understand why, at such a difficult moment, we might want to extend bereavement leave, and not just for the mother, but it would be useful to get a further sense of that from the Government.
The main reason I am speaking today is my Amendment 41. It is an amendment to Amendment 40, which inserts a new paragraph into Clause 18 that defines “pregnancy loss” as
“the ending of a pregnancy after less than twenty-four weeks of pregnancy in any way other than a live birth, or (b) the failure of an embryo to become implanted following a transfer carried out in the course of providing treatment services within the meaning of the Human Fertilisation and Embryology Act 1990”.
I am conscious that these recommendations were made by a Women and Equalities Select Committee report, but I want to understand what is in the Government’s mind today. It is quite a moment to choose to, in effect, use the Employment Rights Bill to define what a pregnancy is, particularly with regard to IVF. I know many people who have been through IVF, who of course have disappointment if it does not work that month or that year, and will try again. The fact that roughly 30% of IVF treatments are successful—I have shared those statistics previously—leaves a whole range of situations where a transplant has not happened. As I said, I am somewhat concerned at what is almost the redefinition of “pregnancy” when we are considering the body of a woman.
Furthermore, when it comes to
“the ending of a pregnancy … in any way other than by a live birth”,
the latest statistics published by the Department of Health and Social Care stated that there were around 250,000 abortions in this country in 2022. That was up 17% from the year before. Meanwhile, although I can entirely understand aspects of foetal anomaly or risks to the health of the mother, according to Department of Health and Social Care statistics that were published and referenced in the Commons Select Committee report, there were around 3,300 abortions for those reasons. There is a very significant difference between 3,300 and 250,000 but, as it stands, anyone who had a legal abortion will be counted in that statistic. I am not aware that the Department of Health and Social Care has yet decided how it will count in its statistics the number of abortions from pills through the post. At the moment, it does not even count the number of pills issued.
I am trying to get clarity from the Government. Is it really their intention that a person who has an abortion—up to 250,000 people a year—will be entitled to bereavement leave? That is what this primary legislation is saying.
On other issues in the Bill, all sorts of things are put into Henry VIII powers or regulations or other conditions. I seek to understand why the Government feel that this should be in the Bill. Obviously, every loss undoubtedly brings horrific grief. I know that, having had had to care for people in that situation and similar, and I understand why this is going ahead. Despite the potential for sickness leave being open, I recognise that under the Equality Act any discrimination would be against the law. I understand the steps the Government are taking, but I would be grateful for a genuine and huge level of detail on what they are setting out today in primary legislation. I commend my amendments to the House.
Baroness Lister of Burtersett (Lab)
My Lords, I will speak to Amendment 104, to which I have added my name. I do not intend to repeat the case I made in Committee for paid carer’s leave, and which was put very fully by the noble Lord, Lord Palmer of Childs Hill, but I am still unclear as to why the Government now, in effect, question that case, having made a commitment to paid leave on a number of previous occasions, as was demonstrated by the various quotes from Front-Bench spokespeople that I and the noble Lord, Lord Young of Cookham, presented in Committee.
My noble friend Lord Katz rejected an earlier amendment in Committee, as we have heard, on the grounds of the costs to business, especially small business, and that it would create a situation of differential treatment. The present amendment, although detailed, simply commits the Government, as I understand it, to the principle of paid carer’s leave—a principle that had previously been accepted. It leaves to regulations the details of how paid leave would be designed. As regards the costs to business, as I said in Committee, many employers are very supportive and a CIPD consultation of its members found that support among SMEs was not much lower than among large employers.
Although it is welcomed that the Government are reviewing carer’s leave to see whether further support is needed, surely there is already more than enough evidence that, to be effective in supporting carers, the leave needs to be paid, and thus any review needs to focus on how that is best done rather than on whether it is needed. That said, can my noble friend the Minister tell us more about the review? To echo in particular the noble Lord, Lord Palmer, what are its terms of reference and objectives? What is the timeline? Will the outcome be published and debated in Parliament? The paucity of information about the review contrasts poorly with the recent Statement about the parental leave review.
In conclusion, if my noble friend the Minister is unable to accept the amendment, will he—I am not quite sure which Minister will reply—at least put on the record the Government’s commitment to paid carer’s leave as set out in Labour’s New Deal For Working People? Will he provide us with the requested information about the review of the Carer’s Leave Act?
Baroness Tyler of Enfield (LD)
My Lords, in speaking to Amendment 104, in the name of my noble friend Lord Palmer, to which I too have added my name, I must apologise that I have been unable to speak at earlier stages of the Bill. I also strongly support Amendments 31 and 32 regarding kinship carers. I have spent a lot of time on the Children’s Wellbeing and Schools Bill, where we have spent a lot of time talking about the importance of kinship care. We need to see join-up between that Bill and this Bill, so that kinship carers, who play such a critical role, get the support they need.
On Amendment 104 and the proposal for paid carer’s leave, which was set out admirably by my noble friend Lord Palmer, it is clear that it is both a modest proposition and incredibly important to unpaid carers trying to juggle work and caring. As we have heard, it would, in effect, turn the current provision—normally up to five days leave within 12 months, as set out in the Carer’s Leave Act and so already a clearly defined right—into a statutory pay entitlement. If you have supported a relative who needs care and worked at the same time, which many of us have, including me, you will know how time poor you are, that it is an incredible juggling act, and that paid carer’s leave can make a real difference.
I have spoken directly to carers who do not have paid carer’s leave in the workplace. They say that taking annual leave is exhausting and they never get a proper holiday. Unpaid leave was a useful step forward and it is right and important, but the unpaid nature of the leave can be challenging. As we have heard, a number of employers have already voluntarily embraced paid carer’s leave because they understand the beneficial impact it has, particularly on productivity and staff retention.
There are all sorts of examples of good employer practice. We have already heard about Centrica. The Phoenix Group offers two weeks of paid carer’s leave and recently added five days of unpaid leave. Some 6% of colleagues took up the offer, with an average rate of 2.64 days. We are not talking about an open cheque here. The employer said: “We have had extremely positive feedback from our colleagues and there have only been benefits to the business as a whole”. Paid carer’s leave would support workers of all ages, from young carers to adult carers and older workers. It would be a positive all-age and all-gender policy, but the reality is that women are more likely to be carers and at risk of working part-time with lower incomes in retirement, so paid carer’s leave is a positive equalities policy.
The final point I want to make is about what is happening internationally. There is a move to deliver more paid carer’s leave support, recognising ageing societies, a greater proportion of retired population to workers and the imperative for people to work for longer. Australia and Germany have 10 days of paid carer’s leave, and Germany has longer-term provisions as well. It is seen in those countries as an important strand of reducing economic inactivity, something we badly need to do here, as the Treasury quite rightly reminds us. With a shortage of social care and carers taking on more hours of care, there is a huge need to ensure that unpaid carers are supported to juggle work and caring responsibilities. It is not a “nice to have”; it is essential.
I will finish with the real-life example of Michelle White from the TSB, who was happy to have her name quoted. She said, “Paid carer’s leave provides a vital lifeline in my ability to care for my sister, often at short notice, and we would both struggle without it. This important measure allows me to provide support during an emergency. I can be there when it matters, with peace of mind that my career will not be jeopardised simply because I am a carer. I cannot speak highly enough about paid carer’s leave and the need for all carers to be supported in this way. Working for a business like TSB that recognises carers and offers this type of support is priceless”.
Lord Sharpe of Epsom (Con)
My Lords, I thank all noble Lords for their contributions in this debate, in particular the noble Lord, Lord Palmer of Childs Hill, for his thoughtful introduction. These amendments raise an issue of deep humanity, that of kinship carers—family members, friends or relatives who step up, often at short notice and with immense personal sacrifice, to care for a child who cannot remain with their parents. There is no doubt in anyone’s mind that kinship carers perform a vital role, and often without the financial or legal support that accompanies formal fostering or adoption. These proposals seek to address that gap through the creation of a statutory kinship care leave entitlement, mirroring in some respects existing entitlements such as maternity or adoption leave. It is a serious and thoughtful contribution to the long-standing challenge of how we support informal family networks caring for vulnerable children and this is a cause worthy of respect and policy consideration. However, although the underlying issue is important, we must also take account of practicality and timing. We have similar concerns to those expressed by others about the cumulative burdens placed on businesses by this Government, particularly small and medium-sized enterprises.
We are debating these amendments in a broader context in which the Government have already imposed or are proposing to impose a series of costly new obligations on employers. We were talking in the last group about day-one rights to statutory sick pay and compensated cancelled shifts with undefined notice periods, and now we are talking about potentially a new category of leave which may extend up to 52 weeks with full employment protections and return-to-work guarantees. Each of these measures in isolation may be defensible and even commendable, but taken together, they represent a heavy financial and administrative load, particularly for small businesses in the retail, hospitality and service sectors, many of which are still struggling in the wake of the pandemic with ongoing and increasing cost pressures. In the case of kinship care leave, the details are vague and defer to regulation, leaving employers in the dark about how it will work in practice. What counts as evidence of an eligible arrangement? Will the leave be paid and, if so, by whom? What safeguards exist to prevent abuse? These questions must be answered before we can impose another legal obligation on employers.
We also have to be honest about timing. The economic climate remains fragile. Many small businesses operate on margins of just a few per cent. For a family-run corner shop or a café with six staff, the unexpected loss of one employee for several months could be devastating, particularly if there is no clear mechanism for support or to backfill that position. We respect and admire the intent behind these amendments, but we must weigh them against the real-world pressures facing employers. This is not the right time to impose new, poorly defined and potentially costly statutory entitlements, especially without clarity on how they will be funded or implemented. We need to support kinship carers, but let us do so in a way that is targeted, workable and fair to employers as well as families.
On government Amendment 34, my noble friend Lady Coffey has raised some important questions and I am looking forward to the answers. Does this amendment cover just termination on grounds of foetal anomaly or for medical reasons? Or is the rest of the subject taken in by that rather catch-all phrase,
“pregnancy loss of a specified kind”?
Can the Minister give us some information as to what he thinks the meaning of “a specified kind” is?
Finally, I note that the noble Baroness, Lady Lister, has asked for details about the review, citing a paucity of information. Having been present throughout all these debates, I know that “paucity of information” is a recurring theme with regard to this Bill. I am also keen to hear what the Minister has to say in due course.
Lord Leong (Lab)
I am grateful to all noble Lords who have spoken: the noble Baronesses, Lady Coffey, Lady Lister, and Lady Tyler, and the noble Lord, Lord Sharpe of Epsom. Turning first to Amendments 31 and 32, tabled by the noble Lord, Lord Palmer of Childs Hill, on the important topic of kinship care leave, I begin by giving my thanks to the right honourable Sir Ed Davey MP, leader of the Liberal Democrats, who has powerfully shared his personal experiences of kinship care and of being a carer himself. This has brought much-needed attention to the importance of kinship care and of supporting caregivers across the United Kingdom. It is important for me to address that.
The Government greatly appreciate the role that kinship carers play by offering loving homes for children who cannot live with their parents. I am sure your Lordships’ House shares these sentiments. We also know the current system needs improvement, because it does not support working families as well as it could. This is why we have already begun work to improve the system of kinship carers, starting with the Children’s Wellbeing and Schools Bill, as alluded to by the noble Baroness, Lady Tyler of Enfield, which will create a legal definition of kinship care to ensure consistency in how local authorities identify and support kinship families. That is why we have to work across government in this area.
I am pleased to say that the Government have announced a £40 million package to pilot a new kinship allowance, which is due to commence later this year. This is the single biggest investment made by government in kinship care to date. The Government’s recently launched parental leave review also presents a much-needed opportunity to consider our approach to the whole system of parental leave and pay. The noble Baronesses, Lady Lister and Lady Tyler, also asked about the terms of reference and how long this review will be. The terms of reference are published online, and the review is expected to last 18 months so that we can speak to stakeholders and various charities and come to some form of decision at a much later stage.
All current and upcoming parental care and pay entitlements will be within scope of the review. It will also consider the needs of other working families who do not qualify for existing leave and pay entitlements, such as kinship carers. Creating an entitlement for kinship carers would pre-empt the review before it had had a chance to consider support for kinship carers in the context of wider parental leave and the pay landscape.
Baroness Lister of Burtersett (Lab)
Before my noble friend sits down, I very much welcome what he said about the review now being more transparent. Did he say that clear terms of reference would be set out, and did he give a commitment to publish the outcome of that review and allow us to debate it in Parliament?
Lord Leong (Lab)
I thank my noble friend for that point. As I said, the terms of reference are available. The review will last for 18 months and anyone who wants to contribute to it may do so. We hope to publish that review in due course.
Baroness Lister of Burtersett (Lab)
Sorry, I think that is the parental leave review. I am talking about the carer’s leave review, which my noble friend just said, at the end of his speech, would be more transparent. Could he say a bit more about that?
Lord Leong (Lab)
Sorry. We will address that as and when this legislation has Royal Assent. We will formalise the terms of reference soon and we will ensure that that information is made public so that everyone can have a look at the review. However, the amendment poses a number of challenges and presupposes the conclusion of the ongoing review.
I turn to the exceptionally important topic of bereavement leave for the loss of a pregnancy. The amendments that this Government have made extend bereavement leave to provide a day-one right to protected time off to grieve a loss before 24 weeks of pregnancy. I am grateful to the Women and Equalities Committee for its important work highlighting the gap in support for those who experience a pregnancy loss before 24 weeks. I pay tribute to my friend and colleague Sarah Owen MP for her work campaigning on this issue and for sharing her personal experiences in impassioned debates in the other place.
The loss of a baby at any stage is incredibly difficult and tragic. The Government recognise that pregnancy loss is a bereavement for many families and fully accept the principle of bereavement leave for pregnancy loss. The amendments will ensure that all employees can have time away from work to grieve and recover when they need it most. In line with bereavement leave, the amendments provide for a minimum of one week’s leave, a minimum of a 56-day window to take the leave and protections around redundancy and dismissal. The Government’s amendments allow for the types of pregnancy loss that will be in scope of the entitlement to be explored in consultation and specified in regulations. IVF embryo transfer loss is specifically referenced in the definition of pregnancy loss to ensure that there is the power to include that in secondary legislation if decided after consultation.
On Amendment 104 in the name of the noble Baroness, Lady Coffey, removing the definition of pregnancy loss entirely would mean that we would not be able to consider providing for certain scenarios such as IVF embryo transfer loss or to consult properly with all affected. No definition in the Bill would lead to uncertainty about what could possibly be captured in regulations—that includes abortion—and limit our ability to consult on a full range of scenarios. We know that all types of pregnancy loss can be experienced as a bereavement.
The Government can therefore not accept the amendment as it is vital that we consider the full range of scenarios that could be in scope in partnership with those impacted. Other details of entitlement, including eligibility, total duration of leave and the types of pregnancy loss in scope, will be defined in secondary legislation. Due to the sensitive and personal nature of bereavement for pregnancy loss, it is important to consult stakeholders on the specifics of the entitlement to ensure that the policy properly reflects and is sensitive to the needs of employers and employees.
Regarding eligibility, the Government’s amendments include provisions to ensure that there is the ability for entitlement to apply also to partners or surrogacy arrangements, if found to be appropriate after consultation. The noble Baroness’s amendment would remove this definition, which would significantly narrow possible eligibility to only those who have directly suffered the pregnancy loss. We know from testimony to the Women and Equalities Committee the devastating effect that pregnancy loss can have on fathers, partners and families. Grief in these situations is not confined to the woman carrying the baby. We therefore cannot accept the amendment as it is only right that it is considered in consultation and conversation with those affected.
By defining details such as eligibility in secondary legislation following consultation rather than in the Bill, we can ensure that the entitlement considers those impacted and a wide range of views in its development and has the flexibility to be updated over time as the legislative landscape and society evolve.
The Government’s amendments recognise the profound impact and heartbreak that can accompany pregnancy loss, while also acting to address the stigma that often accompanies it. The Government are setting a floor for businesses that will ensure all employees have a right to bereavement leave. Bereavement is not an illness or a holiday, and it needs its own special category of treatment. With that, I must ask the noble Lord, Lord Palmer of Childs Hill, to withdraw Amendment 31.
Baroness Coffey (Con)
The Minister was very helpful in saying who he felt would be in the scope of other people to be specified—the partner or somebody involved in surrogacy. He has not talked about what he thinks would be the scope of the abortions. Is he looking to make this the 250,000 or are we talking more about the 3,300 where there is a foetal anomaly? If the Minister has already made an indication on one, hopefully he will have considered the other.
Lord Leong (Lab)
I thank the noble Baroness for that. I did say that the review will look at that, and hopefully it will cover what noble Lords are asking for. I will be moving Amendments 33, 34 and 36 to 40 shortly.
Lord Palmer of Childs Hill (LD)
My Lords, I thank the Minister and the Government Benches, particularly for the kind and very true words about the activities of Sir Ed Davey in highlighting carers’ value to society. I thank my noble friend Lady Tyler, who explained—better than I did—about kinship carers and paid carer’s leave. I thank the noble Baroness, Lady Coffey, for asking for clarity from the Government because I do not think there is clarity. As usual, I thank the noble Baroness, Lady Lister, for stressing that we need the principles of carer’s leave and being very practical and asking for the terms of reference, which I think are not clear.
The noble Lord, Lord Sharpe, focused on the cost of these amendments. On paid carer’s leave, the amendment provides for employers to pay, but then they can be recompensed via HMRC by the Government. It would be a cost to the Government in the end, but it could lead to a happier workforce and people can gain more from it.
When we talk about kinship care or paid carer’s leave, it is not in isolation. The NHS is under considerable stress. If you do not have the input of carers, and give them some recompense for that care, the NHS will collapse even more than it is collapsing now. This is not just something that is being generous. It is practical to make the NHS better, make caring better and make the work of grandparents, uncles, aunts and others appreciated in some way. I thank the Minister for saying that there is a review and things will change. I hope this debate will focus the Government’s mind on it. On that basis, I wish to test the feelings of the House.
Member’s explanatory statement
This amendment is consequential on my amendment of clause 18 at page 41, line 39.
“(ca) after subsection (3) insert—“(3A) For the purposes of subsection (1) an employee is also a “bereaved person” if—(a) the employee has suffered a pregnancy loss of a specified kind, or(b) the employee satisfies specified conditions as to relationship with—(i) a person who has suffered a pregnancy loss of a specified kind, or(ii) a child who had been expected to be born had a pregnancy loss of a specified kind not occurred.”;”Member’s explanatory statement
This amendment and my other amendments of clause 18 would enable the entitlement to bereavement leave conferred by section 80EA of the Employment Rights Act 1996 to be extended to cases involving pregnancy loss.
Member’s explanatory statement
See the explanatory statement for my amendment of clause 18 at page 41, line 27.
“(da) in subsection (5), before “a child” insert “the death of”;”Member’s explanatory statement
See the explanatory statement for my amendment of clause 18 at page 41, line 27.
Member’s explanatory statement
See the explanatory statement for my amendment of clause 18 at page 41, line 27.
Member’s explanatory statement
See the explanatory statement for my amendment of clause 18 at page 41, line 27.
“(ga) in subsection (9)—(i) in the definition of “child”, after “stillbirths” insert “after twenty-four weeks of pregnancy”;(ii) after the definition of “child” insert— ““live birth” means the birth of a child born alive;“pregnancy loss” means—(a) the ending of a pregnancy after less than twenty-four weeks of pregnancy in any way other than by a live birth, or(b) the failure of an embryo to become implanted following a transfer carried out in the course of providing treatment services within the meaning of the Human Fertilisation and Embryology Act 1990;“specified” means specified in the regulations;”;”Member’s explanatory statement
See the explanatory statement for my amendment of clause 18 at page 41, line 27.
Lord Hogan-Howe (CB)
“Special constables: right to time off for public duties(1) The Employment Rights Act 1996 is amended is follows.(2) In section 50 (Right to time off for public duties), after subsection (1) insert—“(1A) An employer shall permit an employee who is a special constable, appointed in accordance with section 27 of the Police Act 1996, section 9 of the Police and Fire Reform (Scotland) Act 2012 or section 25 of the Railways and Transport Safety Act 2003, to take time off during the employee’s working hours for the purpose of performing their duties.(1B) In section (1A), “duties” means any activity under the direction of a chief officer of police.”.”Member’s explanatory statement
This new clause gives employees who are special constables the right to time off to carry out their police duties.
Lord Hogan-Howe
I thank noble Lords for the opportunity to speak to this amendment in my name and that of the noble Lord, Lord Evans of Rainow, whose support I appreciate. This amendment seeks to extend the group of people in the criminal justice system who have the right to time off to fulfil their duties as a special constable.
In 2018, Section 50 of the Employment Rights Act 1996 was amended to include lay observers in prisons, and immigration visiting committees for immigration centres and short-term holding facilities. This added to the right of magistrates and justices of the peace to take time off from their employment. Each of these volunteering groups is of course essential to the effective functioning of the criminal justice system, but so are the special constables who have existed since being created by the Special Constables Act 1831—although today’s version was created by the Police Act 1964.
In my view, special constables are special by name and special by nature. They are unpaid volunteers. They have all the powers of regular constables: to arrest, to search and many more things a constable has the power to do. They also take all the risks that their colleagues take, including being stabbed or assaulted and people abusing them. Basically, they put their lives on the line in the same way that people such as those in the RNLI do on our behalf too. They are not paid, except for expenses, but this of course covers their outgoings—they make no profit.
After being trained, they are usually expected to be on duty for at least four hours a month, but most do very much more than this. Some work every weekend and some during breaks in employment; at such times, they work almost full-time hours. They were designed to be a contingency for war, backfilling for the police officers who would be expected to join the Armed Forces. We might think that particularly apposite at the moment, given the situation in Ukraine and the general threat from Russia. Only last week, the Government published a resilience plan to prepare our emergency and civil defence response for a higher level of threat from the multiple risks that exist. Specials are part of that national contingency when we deploy our Armed Forces.
Special constables are a visible representation of community policing, giving of themselves without payment to stop crime and keep order. For me, they have always been a way to have the community in the police station, holding their regular colleagues to account and not captured by the prevalent police culture—almost a pre-body-worn video. The Government have a commitment to neighbourhood policing, with a promise to deliver 13,000 more neighbourhood officers in the next few years. This comprises regulars, community support officers and special constabulary. If they cannot recruit or retain “free” special constables, they will need larger funding for police officers and police community support officers.
Yet presently their numbers are dropping dramatically. In September 2023, there were 6,330 and, by September the following year, they had gone down to 5,818. But, 10 years ago, there were around 15,000, and in the Met at that time there were around 5,000. So there has been a very significant drop in their numbers.
As far as I can determine, no other police force in the world has this sort of arrangement. If you talk to Americans or New Zealanders, they think it is amazing that people will be police officers, taking all the risks, without being paid. So this is a remarkable thing that we have. They have achieved an awful lot as they have done all the things that we need them to do over the years. In this context, on the grounds of equity with the other volunteers in the criminal justice system, surely we need to enhance the volunteer offer to encourage the recruitment, retention and diversity of the people in the special constabulary.
Lord Evans of Rainow (Con)
My Lords, I rise to support the amendment from the noble Lord, Lord Hogan-Howe. This gives me an opportunity to pay tribute to him and his public service as police commissioner and in the Merseyside Police. It also gives me the opportunity to mention the service of my colleague, my noble friend Lord Sharpe, in the Hong Kong police back in the day.
I declare that I was a special constable in the 1980s. In those days we had a number one uniform and that was it, so it was rather hot on a hot sunny day. We also used to have capes, which we used to put around us and which were quite handy. Nobody quite knew what we had our hands on: it could be a torch, it could be a truncheon or it could be fish and chips. We used to run towards danger with nothing more than a truncheon down our trouser legs. So I pay tribute to special constables, past and present.
As the noble Lord said, it was as a contingency of war that special constables came into being, in the First World War, as many police officers joined the Army to fight over in France and elsewhere. But they have all the legal powers. I remember the Police and Criminal Evidence Act 1984—the old salts were really quite upset with that new Act, because it meant that they could not carry on doing what they had been doing previously. But, for us new boys and girls, it was quite interesting, and I thought we embraced the change in the spirit that it was meant.
We were all unpaid volunteers serving local communities, including our local community in Macclesfield, serving in the Cheshire Constabulary. I worked at an aircraft factory, working on the nuclear deterrent at the time. I used to work during the day and go out at night to do a full shift, from 6 pm until 10 pm, and perhaps even later: if there was a road traffic accident or if somebody went missing, it could end up going into the early hours. I got up the next day to go to work, and I was proud to do that—I was a very young man and was fit and healthy enough to do it.
The strategic defence review Making Britain Safer: Secure at Home, Strong Abroad mentions the importance of:
“Home defence and resilience: a whole-of-society approach”.
My noble friend made the excellent point that now is the time to consider the threats to our country and the role of civil defence, and indeed of special constables. A “whole-of-society approach” includes “protecting critical national infrastructure”. But the wider point is that we are reliant on reservists more than ever. If you are in the Army, the Navy or the Royal Air Force, there is provision, from your employer, for you to go and serve the nation, but that does not apply to special constables. So I agree with the noble Lord: this is the right place and the right time to give the same treatment to special constables that we give to our Armed Forces reservists.
Lord Harris of Haringey (Lab)
My Lords, I say briefly that the principle in the amendment from the noble Lord, Lord Hogan-Howe, is absolutely right. He has made a cogent case for why special constables are indeed special, and for their contribution. Some 25 years ago, when I chaired the Metropolitan Police Authority in London, we reversed a situation in which the number of special constables was declining, and we started to increase the number—both because of the ability to put more people on the street but also in terms of public engagement with the process.
I will pick up the point made by the noble Lord, Lord Evans of Rainow, although I will probably use it in a slightly different direction. He referred to the strategic defence review. That document, the national security strategy and the resilience action plan published last week all talk about a new mechanism of homeland defence and security, and the importance of using more people—more civil resources—to protect the community.
It is quite clear that we are facing a world in which we are confronted with more and more perils—some of them organised by hostile states and others simply the result of the nature of the world in which we live. Therefore, although the principle that the noble Lord, Lord Hogan-Howe, sets out here is extremely laudable—people should be encouraged and given the opportunity for time off if they are doing this sort of public service—I would like to understand the context in which this will happen. Will we be able to say, in a year or two, that we have identified how we will use volunteers and the public in the defence of our nation, in terms of supporting the police and our armed services, in a much more proactive way? I suspect that that should be done holistically, rather than simply in terms of this single amendment to the Bill. Having said that, the principle is absolutely right: those people who give that service should be encouraged to do so and should be given the opportunity of time off.
Lord Paddick (Non-Afl)
My Lords, I draw noble Lords’ attention to my registered interest as a paid non-executive director of the Metropolitan Police Service. I fully support the amendment from the noble Lord, Lord Hogan-Howe. Special constables have all the powers of regular officers, and some are even trained in public order, able to engage in policing marches and demonstrations where violence is feared, reducing abstractions of regular community officers from their beats, to give one example.
In answer to the comment of the noble Lord, Lord Harris of Haringey, about whether this should be part of a broader look at the issues, I say that, at a time when there is cross-party consensus that there should be more visible community policing—and cross-party consensus that there is not enough money to fund the number of police officers we should ideally have—placing special constables’ time off from their employment on a statutory footing, at a cost of only expenses, deserves cross-party support.
Lord Remnant (Con)
My Lords, I support this amendment in the name of the noble Lord, Lord Hogan-Howe, and my noble friend Lord Evans. In doing so, I feel that I am following modestly in a family tradition. I suspect that the noble Lord is not aware that my great-grandfather in the other place introduced successfully, but against much opposition, a Bill guaranteeing members of the police force one day of rest, off duty, in every week. Until that date some 115 years ago, the police had no such entitlement. This amendment is less momentous than that Bill, but it is a proportionate suggestion that gives suitable recognition to voluntary service and strengthens policing. It should also find ready acceptance with employers, who would be able to fulfil their civic duties while suffering minimal disruption.
Lord Bailey of Paddington (Con)
My Lords, I support this amendment from the noble Lord, Lord Hogan-Howe. I want to come at it from a slightly different angle. This could be a vital piece to help the police with one of their weakest areas—representation in the community. I have been a youth worker for over 38 years now, and most of the most committed and professional people from my community already have employment so cannot join the police force, but they would love to be involved in representing our community in said police force to help the relationship between our community and the police force. This kind of initiative could be deeply helpful in allowing that to happen.
Lord Goddard of Stockport (LD)
We will support the noble Lord, Lord Hogan-Howe, if he pushes this to a vote, for a number of reasons, eloquently given by a number of speakers. It comes back to how we value people, whether they are volunteers, kinship people or carers, and where they sit in society. I listened to a couple of the speeches about the days of yore, when the policemen just wandered around the streets, cuffed young boys around the ear and sent them back to school. Those days are gone now, and these special constables are just as much at risk as any other police officer on duty. The people who are coming out and causing trouble, whether they are on drugs or whatever, have no idea, conception or care whether it is a real policeman or a special constable.
Why we are debating the right to time off and reasonable expense is beyond me. Certain things should be blindingly obvious, and this is one of them. Way back in the mid-1990s when I was vice-chair of the Greater Manchester Police Authority, some of the things I saw and heard about what happened to police officers did not always make the press. Special constables and community officers bring the cohesion and bring communities together, and the more that we can get that togetherness without vast expense to the police budget that the Government are trying to control, the better and more settled our society will be. It is a small price to pay for a lot of benefits for a lot of people.
Lord Sharpe of Epsom (Con)
My Lords, I thank the noble Lord, Lord Hogan-Howe, for bringing forward this amendment. I particularly thank my noble friend Lord Evans of Rainow for his very kind words. I strongly support the amendment, which would provide a clear statutory right for special constables to take time off from their regular employment to fulfil their duties under the direction of a chief officer of police.
This amendment would provide a modest but crucial right, protected time off to serve. It would bring special constables in line with other categories of public service, recognised under Section 50 of the Employment Rights Act 1996, such as magistrates and school governors. At a time when police forces are under sustained pressure and when public trust in law enforcement depends on a strong and visible local presence, supporting the contribution of special constables is not just the right thing to do but essential. We rely on these volunteers to keep our communities safe; the least we can do is to ensure that they are not penalised in their day jobs for answering that call.
I hope that the Government have heard the strength of feeling around the House on this issue. I think all speakers spoke favourably about this amendment and, in particular, the noble Lord, Lord Paddick, and my noble friends Lord Remnant and Lord Bailey made some excellent points, albeit slightly different. The noble Lord, Lord Harris, asked an incredibly good question, and I am very keen to hear the answer, although, as the noble Lord, Lord Paddick, pointed out, I am not sure that context is particularly necessary in the case of the specials, because of course they already exist, so they operate in their own context already. However, I am interested in the homeland security dimension, not least because I might even volunteer.
Lord in Waiting/Government Whip (Lord Katz) (Lab)
My Lords, I thank the noble Lord, Lord Hogan-Howe, for tabling Amendment 42, which seeks to permit a special constable to request reasonable unpaid time off from their employer to perform their public duty. In so doing, I pay tribute to the noble Lord for his service, as well as to many other noble Lords, whose service we were either aware of or not so aware of—not just the noble Lord, Lord Paddick, but the noble Lord, Lord Evans of Rainow, who had some interesting tales of his truncheon, and from across the Dispatch Box the noble Lord, Lord Sharpe of Epsom, himself.
The Government recognise and value the role that special constables play in keeping our communities safe, as very ably described by a number of noble Lords in the debate, not just the noble Lord, Lord Hogan-Howe, but the noble Lords, Lord Remnant, Lord Goddard and Lord Bailey of Paddington.
Lord Hogan-Howe (CB)
My Lords, I thank all noble Lords who have spoken, particularly the Ministers, the noble Baroness, Lady Jones, and the noble Lord, Lord Katz, for all the time they have given us on this very long Bill with many amendments. I and others involved in this appreciate their time, as we know it is not straightforward.
The noble Lord, Lord Evans, mentioned the cape; I thought only I remembered that in this Chamber, but clearly not. More importantly, he made a good point about equivalence with the Armed Forces. Reservists are in a slightly different position, but it is one that we should be drawn back to as a matter of conscience as we consider this.
The noble Lord, Lord Harris, made a very good point about the strategic defence review. He accepted the principle in this case but wanted the role to be fleshed out. I agree, but that should not stop us making progress on this point. The noble Lord, Lord Paddick, drew attention to the fact that it is not just general patrol. Some become very specialist; we have traffic officers, public order specialists and some very good forensic accountants who do their job professionally every day and then come in at the weekend to help the police recover criminal assets—a great public service for which the police probably could not afford to pay.
The noble Lord, Lord Bailey, mentioned diversity and community. About one in four specialists in London is from a visible minority community, which is far better representation than the Met has. The Met is hidebound by the fact that two-thirds of the people it recruits are from outside London, so there is always the challenge of getting that representation, but specialists live and work in the community they serve. Frankly, when the police are not paying them, they cannot afford to travel to an adjacent county, so a specialist constabulary always better represents the community it serves.
The noble Lord, Lord Remnant, mentioned his father. I did not know that, but it was a good thing; I was grateful for that day off—and a few more. Many officers go through their careers with extended periods of working during large numbers of public protests, to the point where they cannot get their days off, so that would be very much appreciated.
The noble Lord, Lord Goddard, said one of the things I like best to hear, which is that this is blindingly obvious. Of course, I agree with that. I also appreciate that the noble Lord, Lord Sharpe, with his professional background, supported it, particularly today.
The Minister was kind enough to offer a review. All of us in this place know that reviews can be a bit vague and go on a while—I think this is the second one offered in the last hour. I have lost count in my short time in this place of the number of reviews of which someone has said, “Where did that get to? Has it been delivered? Has anything happened?” It is not a personal matter with the Minister, but I am not entirely convinced by reviews. I go back to the spirit of what the noble Lord, Lord Goddard, said. You can sometimes spend a thousand words trying to change something, or you can just do something. The “doing” here would be that the regulation could be changed and special constables could be brought into a group that already exists. For that reason, I would like to divide the House.
Lord Young of Acton
“(1D) Subsection (1A) does not apply to indirect harassment, so employers only have to protect their employees from non-sexual harassment by third parties that is directed at them.” Member’s explanatory statement
This amendment means employers only have to protect their employees from non-sexual third-party harassment if it is directed at the employee, meaning employers would not have to take all reasonable steps to protect their employees from overheard conversations, remarks or jokes.
Lord Young of Acton (Con)
My Lords, I refer noble Lords to my register of interests. I ask noble Lords, when considering my amendments, to spare a thought for the great British pub. A year ago, the Chancellor promised to “turn the page” for British pubs. As she pulled a pint in the Humble Plumb in Southampton in June 2024, Rachel Reeves said that Labour would revive this “important institution”—I think we can all agree that pubs are important institutions.
Yet no sooner had she said this than she raised national insurance contributions for employers and lowered the threshold at which they are paid from £9,000 a year to £5,000. At the same time, she announced that business rates relief for hospitality brought in during Covid would be cut, while the minimum wage would rise by 6.7%. UKHospitality, which represents pubs, bars and restaurants, has estimated that the total extra cost for its members from the Budget measures announced last autumn will be £3.4 billion a year. This impact has already been felt, with 69,000 hospitality jobs lost since last autumn. According to the British Beer and Pub Association, roughly one pub is set to close every day this year—the Campaign For Real Ale is even more gloomy. If BPPA’s forecast comes to pass, it would take the number of pubs in Britain to its lowest level in a century.
What are the Government doing to save what they call an important institution? Gareth Thomas, the Business Minister, has said:
“We are determined to make the UK the best place in the world for businesses to start and succeed, and that includes our great British pubs”.
He went on:
“We’re working with industry to slash red tape … to ease the pressure on pubs and help them grow as part of our Plan for Change”.
Yet, far from slashing red tape, Clause 20 will add a whole new ream of it. As I am sure noble Lords are aware, Clause 20 amends the Equality Act to make employers liable for the harassment of their employees by third parties, for example, customers and members of the public. It does not cover third-party sexual harassment, mind you—employers are already liable for third-party sexual harassment thanks to the worker protection Act—but non-sexual third-party harassment. I have called this the “banter ban” because I believe it will mean employers will be liable for jokes, remarks and expostulations overheard by their employees—banter—that they find offensive or upsetting by virtue of their protected characteristics.
Why do I say this? We know from the way that the definition of harassment has constantly been expanded by the employment tribunal that it now encompasses overheard conversations—you can now sue your employer for failing to protect you from overhearing something uttered by another employee. The Minister will argue that Clause 20 requires employers only to take “all reasonable steps” to protect their employees from harassment, and expecting employers to protect their employees from overhearing remarks made by customers or members of the public is not reasonable. In short, the Government will argue, the tribunal will not hold employers liable for indirect, non-sexual harassment of their employees by third parties. This is a false alarm, faux outrage.
I wish I shared the Minister’s confidence about that, and note that UKHospitality is not so sanguine, which is why it supports Amendment 43, which would absolve employers of liability for indirect third-party harassment. If the Minister really believes that indirect third-party harassment—overheard remarks, banter—would be out of scope, why not accept my amendment? This would be a huge relief to beleaguered publicans who will not have to worry about employing “banter bouncers” to eavesdrop on customer conversations and will help reduce the increased insurance premiums which Clause 20 will inevitably mean.
The Minister will say that plenty of service providers and businesses already ask customers to treat their employees with respect and to not say or do anything that could be construed as harassment. The vast majority of customers follow this advice, I agree, but the fact that these guidelines are being voluntarily observed is a reason to not make them mandatory, not a reason to make them mandatory. Is it not preferable that customers should observe good manners out of consideration for workers, rather than fear of being penalised for non-compliance?
If noble Lords cannot bring themselves to support my amendment, or at the very least abstain on indirect harassment, I hope that they will consider seriously Amendment 44, which would create a carve out for
“conversation or speech involving the expression of an opinion on a political, moral, religious or social matter, provided the opinion is not indecent or grossly offensive”.
How could any noble Lord possibly object to that? Do we want people in pubs to be constantly looking over their shoulders and lowering their voices if they express an unfashionable or contentious point of view, or do we want them to enjoy the same right to speak openly and freely on political, moral, religious or social matters that we enjoy in this House?
Every pub is a parliament; let us not turn every pub into a library and accelerate the disappearance of this beloved institution. Let us remember what Samuel Johnson said about the Great British pub:
“As soon as I enter the door of a tavern, I experience oblivion of care, and a freedom from solicitude. There is nothing which has yet been contrived by man, by which so much happiness is produced as by a good tavern or inn”.
I beg to move.
Baroness Fox of Buckley (Non-Afl)
In the Mirror newspaper last week, Clause 20 hit the headlines. Deputy Prime Minister Angela Rayner claimed that reforms protecting employees from third party harassment would not chill free speech, and she rubbished claims that innocent workplace banter is the target. She said:
“Nobody should be abused while doing their job, but we’ve seen a horrific rise in violent abuse and harassment of shop workers and other public facing staff”.
She went on to describe those of us worried about the unintended consequences of this clause as resorting to
“spreading made-up nonsense”.
I feel the need to counter this misinformation because I fear Angela Rayner may herself be influenced by misinformation about what is in her own Bill.
I was especially alarmed when the TUC general secretary Paul Nowak told the newspaper that those of us opposing Clause 20 are
“insulting people’s intelligence by pretending that protecting workers from harassment is the same as banning banter”.
But actually, it is—and that is not my decision. It is present in the way equality law has been interpreted in employment tribunals, as has just been described, associating harassment with banter. Whatever the Government, Angela Rayner or the TUC think is in the Bill, it does not set out what constitutes harassment or, rather, what does not.
Therefore, in Committee, the Minister directed us to the definitions of harassment used in equality legislation, which is then interpreted in employment tribunals. It is important to note that under the Equality Act, as interpreted, harassment includes indirect harassment, which, as the EHRC guidance states, can include the following: spoken words, jokes, written words and posts on social media, physical expressions and gestures and, yes, banter.
As we have heard, employment tribunals hear many cases relating to workplace banter, with 57 cases in 2024. If we look at human resources literature, we see that it is full of advice to employers on managing banter in the workplace between their employees. One horrendous suggestion put out to employers was to monitor conversations and attempt to pick up or pre-empt any problems. Another suggestion was to send people on—wait for it—appropriate conversation training sessions. I have just been sent the details of a consultant—there is always a consultant behind all this—who is an inclusive language and banter specialist and runs workshops at £495 a shot. One of his first workshops is “What does the term transgender mean to you?”—I will not say what it means to me out loud or I might get done by the banter police. Anyway, cisgender is a term that I do not think we want to be put into the hands of the banter police.
We are not raising this issue to cause a fuss. The problem is that it is in the Bill. I have always argued against this broad and elastic definition of harassment; it is problematic because it undermines free speech, as I have made the case for many times in this House and in Committee. I also want to emphasise that it risks trivialising genuine cases of harassment and diluting the impact of genuine anti-harassment policies that require serious attention.
Lord Moynihan of Chelsea (Con)
My Lords, I support this very important amendment moved by the noble Lord, Lord Young of Acton, and endorse everything that the noble Baroness, Lady Fox of Buckley, said. Noble Lords will be pleased to hear that they covered so much of the ground that needs to be covered that I will not have to speak for too long.
To tease out some of the truly important aspects of what the noble Lord and noble Baroness said, key to this clause is the word “harassment” and the phrase
“to take all reasonable steps”.
Words can have various meanings and people can interpret them differently. For example, “I banter” but “He harasses”; “He, she or it is a social predator and should be prosecuted to the full extent of the law”. To make a truism, that is what we are doing here: making laws. Laws get interpreted and used to prosecute. People who see an advantage in using the law can take their employer to court, and we will have yet more things being banned, and more opportunities for lawfare, as the noble Baroness said, and to shut down our national life.
In the Economist, which is not a particularly dry magazine, as your Lordships know—it supports all sorts of liberal ideas—an article about two weeks ago said that all these people who talk about how civilisations die have got it wrong. There is one thing that is common to civilisations that die, whether it is the Song Dynasty in 1200, the Venetians at a not dissimilar time, the Romans or whoever. Why did they have a tremendously successful society that collapsed over a number of years? The Economist said that they banned things; they said, “We won’t have this. You won’t be allowed to do that. You won’t be allowed to import these things. We will put tariffs on goods imported and, above all, we will ban various types of speech”. That is what the Economist said leads to the decline of societies.
We are British; we have things like banter. For centuries, we have been able to live at ease with each other and say amusing things. I have had people say things to me that I did not particularly like, but it was banter and I went along with it—we can all go along with it. If we insist on shutting down the most harmless kinds of remarks, which courts will interpret as being justiciable within the framework of this clause, we risk going further down the path that the Economist warned against.
I plead with noble Lords, in a most kind way, to think very hard about this amendment. Please vote for it, because it is not trivial—it is very important.
Lord Ashcombe (Con)
My Lords, I support this group of amendments in the name of my noble friend Lord Young. If these amendments are not accepted, I worry that we will see a sharp increase in cases going to employment tribunals, adding more pressure to a system that is already stretched. It is not hard to imagine how these disputes may play out. We will likely see countless cases built around the old “Yes, you did”, “No, I didn’t” argument, disagreements over who said what to whom, and in what context—not only the genuine cases mentioned by the noble Baroness, Lady Fox. It is messy, time-consuming and, frankly, avoidable by agreeing to these amendments.
Much of the debate on this issue so far has rightly focused on the hospitality, retail and entertainment sectors, where these challenges are particularly acute. However, it is not only these sectors that have an issue coming to them; it goes much wider than that. By way of example, I work for a large insurance broker, Marsh Ltd. We regularly host clients from around the world at our offices in the City of London. These visitors often come from countries and cultures very different from our own. Now imagine a scenario in which an employee overhears a private conversation between two overseas clients in our lobby—perhaps just in passing—and takes offence. That could lead to a complaint and, potentially, even to legal action, despite my employer having no direct involvement. Why should any business, large or small, be held liable for that kind of situation?
We need to remain an attractive destination for global business, whether in insurance or any other sector. Welcoming international clients to the UK supports jobs, drives growth and benefits us all, but if businesses feel they are constantly at risk of ending up in tribunal—or are under the threat thereof—over things beyond their control, that creates a real disincentive to continue. For smaller companies, the stakes are even higher. The financial and reputational cost of defending against such claims could be devastating.
This is a matter of common sense and balance. These amendments do not take rights away from workers; they simply provide clarity and fairness for everyone involved.
Lord Lucas (Con)
My Lords, has the Minister consulted the Clerk of the Parliaments about how he would apply this clause to this House, should it be passed? What would be the rules in, for instance, the Peers’ Dining Room about discussing politics and religion? The fact that we might think it unreasonable that we should not be allowed to discuss that does not make it unreasonable. What makes it unreasonable, under the words of the Bill, is that it would be something it would not be reasonable to do. It is clearly within the scope of the organisation of this House to say that no potentially offensive conversations should be held in spaces where employees are likely to be present. This is what the Bill says at the moment. I can see that noble Lords opposite find it ridiculous, but this is the legislation that their Government have drafted.
Lord Goddard of Stockport (LD)
My Lords, I wish to state clearly that we on the Liberal Democrat Benches do not agree with Amendments 43, 44, 45 and 193 or their intentions. Throughout Committee, the noble Lord, Lord Young, consistently framed his amendments on this subject around the defence of what he terms banter, suggesting it as a justification for remarks that can be harmful in the workplace.
To us on these Benches, it is clear that the debate on this issue has been shaped by a somewhat misleading portrayal of the Bill’s aims. The amendment rests on a narrow and simplistic view of harassment that risks undermining protection for workers by focusing on policing private conversations rather than addressing the real problems of bullying and harassment.
I must also express concern over the repeated invocation of banter as a shield for inappropriate behaviour. Too often, the phrase has been used to excuse sexist, racist or otherwise discriminatory conduct. To say otherwise is discourteous.
If we undermine the protections the Bill offers, especially through amendments that narrow employers’ duties, we risk signalling that the experiences and well-being of their workers are of little consequence. We cannot and must not dismiss their right to a safe and respectful working environment.
Lord Sharpe of Epsom (Con)
My Lords, I thank my noble friends Lord Young of Acton and Lord Holmes of Richmond for their amendments in this group. I join the noble Lord, Lord Goddard, in his remarks about the amendment of the noble Lord, Lord Holmes, in particular, which addresses an important point about the employment opportunities for blind and sight-impaired people. Unfortunately, the measures in the Bill make it significantly more costly to hire all individuals, and this will hit those on the margins of the labour market the hardest.
My noble friend Lord Young has made some very compelling points in Committee and now on Report on Clause 20, and this is where the noble Lord, Lord Goddard, and I differ. If the Government do not accept my noble friend’s amendments, we must consider the logical—and potentially absurd—consequences of allowing unqualified liability for indirect harassment.
Imagine for a moment that the same principle was applied here in this House, as the noble Lord, Lord Lucas, just did, while making some very good points. Suppose for example a guest in the Public Gallery was to lean over and whisper something mildly controversial—perhaps a pointed remark about constitutional reform. A doorkeeper standing nearby happens to overhear it and finds it offensive. Under the logic of indirect third-party harassment liability, would the Lord Speaker be expected to issue a formal apology? Would Black Rod be required to eject the offender and impose mandatory sensitivity training on all future guests? What would the “banter consultant” mentioned by the noble Baroness, Lady Fox, say about that?
This illustrates the unworkability and overreach of the current drafting. No one would expect Members of this House to be held responsible for the spontaneous and overheard utterances of strangers in the Gallery, and nor should we expect publicans, shopkeepers or venue managers to be so, either.
As to Amendment 193 standing in my name, the Government have already decided to delay many of the measures in the Bill. Originally, we were told that these measures would come into effect by 2026, but the Government’s decision to postpone parts of the Bill is, I believe, an implicit admission that their consultation process was inadequate.
The Government have now begun to recognise the very real and unintended consequences that could follow from some of these provisions. Clause 20, which seeks to impose liability on employers for third-party harassment, is one such provision that warrants further scrutiny and, at the very least, a longer lead-in time. This clause, while we accept it is well-intentioned in its aim to protect employees, risks, as we have discussed, casting too wide a net. It opens the door to legal uncertainty and potentially frivolous claims based on subjective interpretations of overheard remarks or perceived offence. Therefore, the Government must reconsider how such a broad definition of harassment could be interpreted in real-world settings, particularly in the hospitality and retail sectors, where employees regularly interact with members of the public.
As my noble friend Lord Young of Acton pointed out, recent warnings from the British Beer and Pub Association, which has announced that Britain is now losing a pub every day, should be heeded. This is not simply a matter of economics; it is a cultural and social loss, as my noble friend pointed out. Pubs are part of the lifeblood of our national identity. They are centres of community, debate and tradition, yet now, in addition to facing tax increases, rising costs and staff shortages, pub landlords are being told they may be held legally responsible for comments made by their patrons, even if those comments are not directed at staff. To quote again from the noble Baroness, Lady Fox, this is not made-up nonsense; this is factual.
I urge the Government to take this opportunity to reflect, to consult more widely and to ensure that they do not impose a law which may undermine business, stifle free expression and expose employers to unfair liability.
Baroness Jones of Whitchurch (Lab)
My Lords, this Government have provided assurances to your Lordships’ House throughout these debates, time and again, that Clause 20 will not have the chilling effect on free speech that is being claimed today. Therefore, we will resist Amendments 43, 44 and 45, tabled by the noble Lord, Lord Young of Acton, in relation to third-party harassment.
I make it absolutely clear at the outset that this clause is about addressing harassment, not about banter. We have overarching legislation in the Human Rights Act 1998 which guarantees freedom of expression in a way that is legally and constitutionally stronger than any amendment the noble Lord could make to the current Employment Rights Bill. Therefore, we do not accept the argument that carve-outs are required or that new concepts should be introduced that would complicate the law unnecessarily.
Employers are already obliged under the Equality Act 2010 to protect employees from harassment in the workplace. That has obviously not led to “banter bouncers” in the workplace. Therefore, employers already have an understanding of how to apply these protections in practice. Our aim is not to burden employers or prevent free speech; it is to deliver on our commitment to create and maintain workplaces and working conditions free from harassment, including by third parties.
The question was raised as to whether cases would go to a tribunal for people being oversensitive. It is important to note that in an employment tribunal claim for harassment, if certain conduct has a humiliating or degrading effect on the recipient but that was not its intended purpose, the tribunal must consider whether it was reasonable for the conduct to have that effect. The reasonableness and the facts of the individual’s situation must always be considered. It is not a purely subjective test based on the view of the recipient. In addition, there is a seriousness threshold. Conduct that is trivial or causes minor offence will not be sufficiently serious to meet that definition of harassment.
The protection we have proposed is welcomed by a recent nationally representative survey of 5,000 people by the TUC, which found that eight out of 10 people—
Baroness Jones of Whitchurch (Lab)
I do not know what is funny about that, because I do not know that I have heard any polls from the opposite side. The TUC poll found that eight out of 10 people—79%—support the plan to protect workers from harassment.
I remind noble Lords that the Government will be publishing guidance so that employers are supported with these changes. We will make it clear that they are not required to take unreasonable steps and we will set out how they can continue to effectively prevent harassment and protect free speech. No business will be required to hire staff to monitor speech or diversity under this provision.
Many public-facing businesses, such as pubs, universities, sports venues and public transport, already have posters that signal a zero-tolerance approach to any form of harassment at their venue or site, including harassment of their staff. We would consider this a reasonable step.
The noble Lord, Lord Lucas, raised the issue of this building, and this very building has notices detailing the behavioural code, making it clear that everyone on the estate should treat one another with respect and that unacceptable behaviour will be dealt with seriously. This has not had a chilling effect on free speech in this place.
Harassment is taking place in many workplaces that is not banter and, in some cases, employers are simply not doing enough to protect or support their employees. In a poll of 16 to 35 year-olds in 2018, the TUC explored the experiences and the impact of third-party harassment. For example, a young woman complained of
“customers sexually harassing staff members and myself whilst drunk. It also occurs when they are sober. It happens every time I work. My managers think it’s funny”.
Another customer, a sales assistant aged 18 to 21, said that they were constantly being sworn up by customers for no reason and called racial slurs, and had witnessed people being hit. I do not know what the answer of the noble Lord, Lord Young, is to all of that, but we have an answer, which is to take steps against third-party harassment.
My noble friend Lord Leong shared a very personal story about when he worked in a pub in his student days and was harassed constantly, being called all manner of racist names. He complained to the manager, who dismissed it as banter, but it was not banter, and he still finds it very difficult to talk about it to this day. He left the pub after two weeks because he could not take it any more. We do not want people to have to do that in future. It is very important to us that future employees do not feel this way.
Diversity in businesses can be linked to benefits, including improved recruitment, employee engagement, more effective teams and improved understanding of customer wants and needs. We also know that companies with the most diverse leadership teams are more likely than ever to outperform less diverse peers on profitability. A customer service survey by Hospitality UK and CGA found that almost two-thirds of customers think that a venue’s equality, diversity and inclusion policy is important, and a third said that they would be more likely to visit a venue if it had policies to promote equality. We are, therefore, convinced that very few businesses, if they want to keep their customers, would support the amendments from the noble Lord, Lord Young.
I now turn to Amendment 193, tabled by the noble Lord, Lord Sharpe of Epsom. As set out in our road map for delivering Labour’s Plan to Make Work Pay, we intend to commence the Bill’s protections against third-party harassment in October 2026. It is important that we get implementation and the details right to ensure that employers and employees understand the new law, and that it can be as effective as possible in ending third-party harassment. The approach we have taken and the timeline set out allow the time required to deliver effective implementation.
I assure the noble Lord that there is no need to delay commencement of Clause 20 until October 2027 due to concerns relating to free speech or burdens on business. Over the coming months, we will be engaging with stakeholders to ensure that guidance is fit for purpose. This will build on the consultation held in 2019 on introducing protections against third-party workplace sexual harassment, as well as on responses to the recently closed call for evidence on equality law. This timeline therefore accounts for the need for stakeholders to prepare for changes, and we will ensure that they are supported in their preparations. I remind your Lordships that, if a woman is sexually harassed by a customer at work today, she cannot seek individual redress, and if an employee experiences racial or homophobic harassment from a third party at work today, they have no protections under the Equality Act 2010.
I hope that we can all agree that employees should feel safe at work and be free of harassment. Therefore, we should not delay introducing these important protections any longer, and I urge the noble Lord, Lord Young, to withdraw his amendment.
Lord Young of Acton (Con)
I would just like to clarify that, when I referred noble Lords to my entry in the register of interests, I was referring them specifically to my job as the general-secretary of the Free Speech Union, which has been campaigning on this issue. I thank noble Lords for all their excellent contributions to this debate, particularly the noble Baroness, Lady Fox of Buckley.
I will quickly respond to a couple of points made by the Minister. I do not think she can justifiably claim that Clause 20 will be for the first time protecting workers from being racially abused by customers or members of the public. If someone racially abuses another person, as I understand it, that would be a racially aggravated offence under Section 5 of the Public Order Act 1986. So it is not as if there are currently no legal protections for workers who are abused in that unacceptable way.
The Minister said that the Government intended to publish guidance. on what “all reasonable steps” employers would be expected to take to protect their employees from third-party harassment. But, as I understand it from my reading of the Bill, the Government are obliged to provide guidance when it comes to protecting workers from third-party sexual harassment. They will set out what all reasonable steps are with respect to that, but there is no comparable clause in which the Government commit to providing guidance on what all reasonable steps are when it comes to protecting employees from third-party non-sexual harassment.
The Minister said that it would introduce an element of confusion into Clause 20 to accept either Amendment 43 or 44, because the things these amendments are trying to rule out of scope are already out of scope. If that is the case, and if the Minister genuinely believes that indirect harassment is not within scope, that banter is not within scope and that this is an exaggeration, a faux outrage, and if she genuinely believes that good-faith conversations about moral, political, religious or social matters, provided that they are not obscene, are out of scope, why not accept Amendments 43 and 44?
Doing so would provide the hospitality sector, and publicans in particular, with some clarity about what reasonable steps they can be expected to take to comply with this new clause. As it stands, there is a great deal of confusion. They will feel that they must err on the side of caution to prevent the possibility of being taken to the employment tribunal by aggrieved workers.
Pubs are on their knees. I ask the House not to impose these additional burdens on publicans who are already struggling to survive and keep their businesses afloat. If the Government genuinely believe in growth, and if they genuinely believe that pubs are an important British institution and want to take steps to preserve them, at the very least they should give publicans the clarity that accepting Amendments 43 and 44 would provide.
I am afraid that I am not satisfied by the Minister’s answer and so would like to test the opinion of the House.
Road and Rail Projects
(1 day, 10 hours ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
Lord Moylan (Con)
My Lords, in the light of that last vote on the Bill, I will have to be very careful about what I say to ensure that it does not offend staff.
It must be tough being the Secretary of State for Transport, because every time the Government are in difficulty with their Back-Benchers she is sent out to make another announcement about some great, distant spending plans. Of course, all the rail announcements made in this Statement were in fact announced by the previous Government. Before the Minister says, “Where was the money?”—and when he does say that, it displays a certain frailty of constitutional grasp—the fact is that, had the previous Government been re-elected, there would have been a spending review, just as this Government have had a spending review, and the schemes that this Government have announced would be in that spending review. That was the pledge; that is how our constitution works.
Part of this Statement is not about announcing new rail schemes but about cancelling road schemes. We are not going to get the widening of the A12 or the A47 scheme from Wansford to Sutton. They are gone for the foreseeable future. However, I will turn back to the rail schemes, as my few remaining remarks will be about them.
We find ourselves in the extraordinary position of being asked to celebrate rail expansion when the Government have still failed to lay the Great British Railways Bill before Parliament. Great British Railways, optimistically suggested for late 2026 at the earliest, now appears increasingly likely to slip to 2027 or beyond, with the legislation yet to appear before either House of Parliament. Perhaps the Government have finally realised that centralising control of our railways is not the simple solution that they once claimed it would be. The complexities of their grand nationalisation project appear to have caught them rather off guard.
So my first question to the Minister is: where is the Bill? Where is Great British Railways? More pertinently, where is shadow Great British Railways—which already has a remunerated chair—in these announcements? The relevance of that is that, under the Government’s scheme and their plans for rail, proposals such as this—the expansion of the rail network—are meant to be proposed, worked up and delivered by Great British Railways, subject to government funding, not the other way round. We are not even sure that all these schemes will necessarily be carried out, because what guarantee is there that they will be a priority for Great British Railways when that body comes into existence? Is it, in fact, merely a puppet for the department after all, as we suspect might be the case?
When we were debating the Passenger Railway Services (Public Ownership) Bill, which began the process of nationalising the train operating companies, I warned that the Government were moving not from one state to another but from one state to a huge transition period. That is what we are in at the moment: a transition period where we have no idea who is in charge of the railways and no real accountability. It is a governance mess. The Department for Transport continues its iron grip on the rail operators, which it now owns through subsidiary companies, with civil servants in effect running train services while the promised arm’s-length body remains a distant aspiration. This raises fundamental questions about whether their calls for rail growth are genuine or merely a smokescreen for increased state control.
The Government’s actions speak louder than their words. The Office of Rail and Road, under instruction from the Secretary of State, has already rejected eight open access operator contracts, despite compelling evidence that competition drives service improvements and passenger growth. That ideological opposition to open access operations flies in the face of economic evidence and passenger benefits. Consider the transformative impact of operators such as Grand Central and Hull Trains, which have brought direct services to previously underserved communities in Sunderland, Scarborough, Bradford and Hull. These are not abstract policy successes but tangible improvements to people’s lives, connecting communities that had previously lacked such direct rail links.
Independent research by Arup and Frontier Economics provides unequivocal evidence of competition’s benefits. On corridors with open access competition, service frequency rose by up to 60% and total passenger numbers increased by approximately 40%. Those are not marginal gains; they represent the kind of transformational improvements the Government claim to seek through their infrastructure spending. Yet instead of embracing this proven model for growth, they actively suppress it.
If this Government were truly committed to rail growth, they would be encouraging, not stifling, the competition that demonstrably delivers increased services and passenger numbers. The fact that they do the opposite suggests that their rail policy is driven more by ideology than economic efficiencies.
The delays to Great British Railways reveal a Government who perhaps underestimated the complexity of their grand nationalisation project. What was once promised as a streamlined solution now appears mired in the very bureaucratic inefficiencies they claimed to oppose. The latest date we have for the Great British Railways Bill to appear is the autumn. Will the Minister confirm that date or will he have to say, as is now widely believed in the industry, that he will not make that deadline and that the Bill will be coming much closer to Christmas at the earliest?
This House has a duty to scrutinise not just the Government’s spending commitments but the coherence of their overall transport strategy. We cannot properly fulfil that duty when key legislation remains unpublished and when policy appears to contradict evidence. The Government must explain why they continue to reject open access applications when the evidence so clearly demonstrates their value. They must clarify when Parliament will finally see the Great British Railways Bill and they must reconcile their rhetoric about rail growth with their actions that constrain it. Until then, I fear we are being asked to applaud announcements while the fundamental questions about rail policy direction remain unanswered. The British public deserve better than this policy vacuum masquerading as progress.
Baroness Pidgeon (LD)
My Lords, I will focus on the Statement and the rail and road projects contained within it and, perhaps, those not within it. Across the country, communities have been let down by a transport system that is creaking, crying out for investment and improvement, and was neglected by the last Conservative Government. Constant announcements and reannouncements of transport projects were made, with what appeared to be fictional budgets that never materialised, while our roads and railways deteriorated. The public have been let down.
A safe and reliable transport system is vital for economic growth, and therefore this capital investment is welcome news for the communities that will benefit. In particular, I welcome the Midlands rail hub, the east coast main line being upgraded with digital signalling, new stations at Wellington in Somerset and at Cullompton in Devon, the east-west railway line to Cambridge, and over £2 billion for Transport for London to continue with the purchase of new Piccadilly, Bakerloo and Docklands Light Railway trains. We await the detail of Northern Powerhouse Rail—the Statement says “soon”, whatever that might mean.
It would be helpful, given the hopes raised in the past, for the Government to provide details of the timescale and how the money will be spent to deliver the projects outlined in the Statement. The Statement also confirms that many other schemes will now need to be reviewed. These are projects that are paused or effectively scrapped. I am particularly concerned about the pause to the electrification of the Midland main line from London to Sheffield. Given the removal of the High Speed 2 leg to Sheffield, it feels as if Labour is letting down Sheffield and South Yorkshire by once again cutting major investment in its railway, leaving Sheffield as the largest city in Britain without an electrified railway. When can we see this important project back on track?
I am also deeply concerned that stage 5 of the resilience programme in Dawlish has not been funded. It would take only one large storm to close the railway to the south-west once again. Monitoring is not enough, and I hope the Minister, as the former chair of Network Rail, will assure the House about the future of this project. Then there is the busiest interchange station in the entire country, without step-free access to platforms or accessible facilities for passengers. Its platforms and corridors are far too narrow for a station with around 6 million entries and exits a year. Planning permission has been granted and it is ready to start construction next year, but the project has been put on hold. What am I talking about? Peckham Rye in south-east London. This is such a busy and important interchange. When can we expect funding for this vital project?
Finally, away from the specific projects that I have outlined, can the Minister give a firm assurance that the Government have learned from the overruns of High Speed 2 and Crossrail, and that all these projects will be delivered on time, on budget and using technology such as digital twins, where appropriate, to ensure value for money for the taxpayer?
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
My Lords, I am pleased that the noble Lord, Lord Moylan, said so much about other things. He did not have much to say about the list of funded schemes, so I am concluding that, by and large, he is happy with what he has read in the Secretary of State’s Statement in the other place. He makes a lot of noise about the fact that they would have been in some spending review had his Government been re-elected. They were not. Before that, however, they had published documents with endless numbers of schemes that were, frankly, never likely to be funded. There were promises everywhere but funding nowhere. The best example of that is the notorious Network North document. Incidentally, it included Tavistock and a number of other places not in the north of England at all, but the characteristic of all the entries in that document was that none of them was ever funded.
He does not have to listen to me about this, although it is a pleasure to speak to the House now. My predecessor, Huw Merriman, was in front of the Transport Select Committee a few days ago and said:
“A lot of promises were made to MPs and others as to the ambition, but it did not match the amount that was actually being set down. By the time I came into post I ended up with a list that was much longer than could be funded”.
That is true: around the country, all sorts of communities were promised transport schemes by the previous Government that were never likely to be funded and were not funded. Somebody has to sort that out and announce a programme that will bring long-term economic prosperity around Britain, get schemes built and stop a lot of money being spent on endless scheme development without the schemes being delivered. This is such a list, and this list will be delivered. The funding is in place through the spending review to do it, even though there is less than we would like because of the lamentable state of the economy at the time this Government took over.
The noble Lord, Lord Moylan, has a lot to say pejoratively about the Government’s rail reform and he continues to ask where the Bill is, but he knows perfectly well that progress can be made without the Bill. Indeed, the purpose of the Passenger Railway Services (Public Ownership) Act 2024 was to start the process of bringing passenger operations back into public ownership. The consequence is that we already have two parts of the railway controlled by one person, both the infrastructure and operations. That will allow better reliability, increased revenue and reduced costs. Things are happening today that were not going to happen under the previous regime, and which will produce a better railway. That is important.
The noble Lord says that civil servants are running train services. Actually, I note that Steve White at Southeastern Railway and Lawrence Bowman at South Western Railway are good railway people. They are not civil servants; they are public servants, and they intend to run those businesses for the benefit of the travelling public and the British economy.
The noble Lord talked a bit about open access. What he failed to say about the applications that the Office of Rail and Road recently rejected is that it did not reject them on any competitive grounds; it simply rejected them, most recently, because of a lack of capacity in the railway system. Those train services could not run, and if they had then they would have disturbed further—or, rather, reduced—the reliability of the system.
One point about the list of schemes—lamentably, he did not go into it in detail, but I could—is that many of those schemes will help the railway to run by improving its capacity, such as the digital signalling on the southern end of the east coast main line, which the noble Baroness referred to. The list is starting to look at improving railway capacity and reliability, which was not a feature of many of the Network North schemes—even though they were not funded—but is a feature of these schemes. This is part of the Government’s intention for a long-term investment strategy, and the schemes announced by the Secretary of State last week are an important part of that. I absolutely contend that the Government are on track to deliver what the economy needs in terms of local transport, particularly in the Midlands and the north; to deliver on road schemes without having a horrifically long list of schemes that were encouraged but never likely to be funded; and to start to do things on the railway that will make a real difference.
The noble Baroness, Lady Pidgeon, was much more focused on the announcement itself, for which I am sure both I and the House are grateful. She enumerated a number of the schemes in the announcement; I am pleased that she welcomes those, as the rest of us will. There will be an announcement on Northern Powerhouse Rail shortly. I will not define “shortly” today; it needs to be worked out with the combined authority mayors in the north of England, which is the reason for some delay. On the road schemes, details of the timescales will emerge as road investment scheme 3 is put together and announced in the early part of next year. On the railway, we will now move forward with the schemes that have been announced.
The noble Baroness is of course right that there are well-known projects and schemes that have not made this list, particularly railway schemes, principally because the other thing that the Government did, as the Chancellor announced as part of the spending review, was to fund HS2 to continue to be delivered alongside the wholesale revision of its governance and management, which will make spending that money more successful.
That does not mean that everything that one would have wanted to have been done is capable of being done for the moment. In particular, the noble Baroness referred to the electrification of the Midland main line, which has got to Syston, near Leicester, but will not go forward, at least in this spending review programme. What will go forward, however, are the bi-mode trains that take advantage of the wires, where they are up, as well as the improvement of the power supply and resilience of the existing wiring south of Bedford, which is quite old. Sheffield, Derby, Nottingham, Leicester and other major places on the Midland main line will see a betterment of service due to the introduction of the new trains in the autumn. I think we all want to regard future electrification as a deferral rather than an abandonment.
The noble Baroness referred to phase 5 of the scheme at Dawlish in Devon on the resilience of the Great Western main line. Phases 1 to 4 were principally about repairing the sea wall and the damage created 10 years ago by an exceptional storm, whereas phase 5 is looking at the stability of the cliffs behind the railway, which indeed should be the subject of future work. The remediation, and indeed the speed of movement, of those cliffs is worth monitoring now, whereas the work that has been done up to now has been on the basic resilience of the sea wall in order to keep the railway running.
The noble Baroness is right about Peckham Rye; it is the largest interchange station, but the scheme is, at least at present, unaffordable. Although, again, I would expect that to form part of a longer-term enhancement pipeline. It is regrettable that there are things across the railway that everybody would have wanted to see, but there is simply not enough money for them.
The noble Baroness is right about the lessons from recent projects. We have talked in this Chamber about HS2 and the need for new management, governance and a focus on understanding what is being delivered at the time the money is spent. The Government, frankly, should be commended for their commitment to continue HS2, which will produce large-scale economic benefit in the Midlands while that process takes place. Not everything is bad in the railway project firmament. Indeed, the trans-Pennine upgrade and east-west rail are so far on time and on budget. Learning from those is as important as learning from HS2, which, sadly, is neither.
Finally, the noble Baroness referred to digital twins. My noble friend Lord Vallance has a lot to say about digital twins for the whole of the Oxford to Cambridge arc, of which east-west rail will form part. Its use in project management is only in the foothills but it needs to be increased. I agree with her on that, too.
Baroness Bennett of Manor Castle (GP)
My Lords, my question is about the accuracy of the Statement. I hope the Minister will be able to reassure me that it is accurate. I refer to the third page, under the headline “Major road network”, and the Government explaining
“why we extended the temporary cut in fuel duty at the last Budget”.
That temporary cut has been going on since 2011, since when the fuel duty level has been frozen at or below 2010 rates. This has cost the public purse £130 billion thus far and, if it is not temporary and is to continue until 2030, will cost £200 billion. Of the beneficiaries of that, the top quintile by income gets 24% of the benefit—that is all those Chelsea tractors—while the poorest quintile gets only 10% of the benefit. Some of this money might, for example, be spent on at least keeping the £3 bus fare or going back to £2 bus fares. Can the Minister assure me that this is only, in the Government’s mind, a temporary cut in fuel duty?
Lord Hendy of Richmond Hill (Lab)
I am sure the noble Baroness will know the answer to that. As I said at Questions, taxation is a matter for His Majesty’s Treasury. The Chancellor will determine taxation policy from time to time.
Lord Berkeley (Lab)
My Lords, I congratulate the Secretary of State and my noble friend on producing a comprehensive list of railway and road schemes they intend to go ahead with. This is the first time that we have seen such a list for years. In her introduction, the Secretary of State says that she is green-lighting over 50 rail and road projects. I am not sure whether green-lighting is all right, because occasionally greens go to orange and red, but I hope that is wrong. Within the text, there is quite a lot of uncertainty about which schemes are going ahead and which are what Ministers call “paused”. Pausing could happen for just a week or for a year. It would be useful, the next time Ministers do this, to spell out what pausing means.
One of the schemes paused is the Dawlish scheme mentioned by the noble Baroness, Lady Pidgeon. I have an interest as I live down the other end. I am not suggesting the work should start now but, as my noble friend said, monitoring should continue because, if the cliff does come down—it could happen quite quickly if it does—it will put the south-west in a very difficult position.
Could my noble friend, over the next week or two, publish a short paper giving the criteria used for going ahead with or pausing different schemes? It can apply to roads as well as to rail. We have had so much stop-start over the last few years, for reasons we need not go into. It would be nice to know what the reasons are. What are the criteria? Is it that there is a good business case, is it because the local MP knows the Minister very well, or is there some other good reason? I am sure there are good reasons for the decisions, but it would be helpful if Ministers could come up with that in the next few weeks. Otherwise, I congratulate the Minister on a good, comprehensive document.
Lord Hendy of Richmond Hill (Lab)
I am grateful to my noble friend for his compliments. Of course, the real significance of this list is that it is a funded list, rather than one that is not funded—a list of aspiration and hope. I am not too sure about the phrase “green-lighting”; I am not too that it is in the dictionary and, if it is, it is a shame. What it means is that these are funded schemes to go ahead. One or two still need development consent orders, which is a process that has to be taken to a conclusion. Therefore, the start dates will be different across the huge list, but many are ready and have been waiting for funding for quite a long time.
On the pausing at Dawlish that I referred to in the discussion with the noble Baroness, Lady Pidgeon, monitoring will take place. It is not that it “should” take place. The monitoring of those cliffs needs to continue. My understanding of the situation, which I have to say is from the last job I did rather than this one, is that monitoring those cliffs is essential. The work needed to remedy all this is, at least partially, about what we see in the monitoring process, so it is sensible to look now and do something when agreed.
Will we publish a paper on the criteria that have been used? There are two things here. One is that the Government have decided to do these schemes and have taken a view, from the wreckage they inherited, to prioritise things that need to be done that will contribute to a better local economy. We will get on with doing that first. In the longer term, there is an intention to have both a 10-year infrastructure strategy and a long-term railway plan. In conjunction with the revision of the Green Book that the Chancellor talked about in the spending review—to look at aspects that allow projects in parts of the country with lower rates of economic activity to benefit—I think there will be a case to publish a long-term railway plan and talk about the criteria used. For now, we will get on with what has been announced.
Lord Wigley (PC)
My Lords, the Minister is familiar with the intricacies of the Barnett formula. I know that because he has quoted it to me in the past. Will he therefore confirm that the Barnett formula, as far as rail is concerned, will indeed generate money for Wales from those projects that are England-only, such as the Oxford to Cambridge line? Will he also confirm what the First Minister of Wales has called for—for Wales to get the Barnett consequential of that expenditure?
Lord Hendy of Richmond Hill (Lab)
The noble Lord is right: this subject has come up before. There is a real difference in the current circumstances. Rail projects are all classified as England and Wales in the way that this is done. The real difference in this list is that, for the first time, there is a significant commitment to funding rail enhancements in Wales: £300 million or so in the spending review period, and a total of over £450 million in 10 years.
The current Welsh Government, particularly Ken Skates—whom I happened to meet this morning on the subject—and the Secretary of State for Wales, agree that the schemes that have been announced for development and implementation are the right ones. There are schemes for the south Wales main line arising from the Burns report, and there are schemes for the north Wales main line to improve train frequency and connectivity. There is a scheme for Wrexham to Bidston—curiously, in these documents it is referred to as Padeswood sidings, about the most obscure title that you could imagine—which is designed to make some freight improvements to double the frequency from Wrexham to Bidston. There are also a number of other things. The significance of this announcement is that it commits money to Welsh railway schemes— schemes that the Welsh Government agree need to be taken forward as the most urgent—and I hope that the noble Lord welcomes that.
Lord Teverson (LD)
My Lords, like my noble friend, I was rather surprised by the tone of the Official Opposition, given the billions of pounds wasted on HS2 just to provide a shuttle—a high-speed shuttle, admittedly—between a north London suburb and Birmingham. What a waste of time and national resource that was.
I very much welcome a number of initiatives in the Statement. Like the noble Lord, Lord Berkeley, I travel up from Cornwall normally, and I welcome the stations at Wellington and Cullompton, and the opening of the line to Portishead, for which we have waited for some time. The Minister mentioned the Tavistock line, and I rather regret that it looks like that will not happen in my lifetime, but we will see.
As someone who is not a rail expert, I will ask the Minister two things. I do not understand why we do not have a regular electrification programme in this country for the whole of the rest of our network, because of both running cost—the cost of rails and the weight of the machines—and our carbon footprint. Why do we not just have the skills and ability to roll out electrification each year in a standard way that makes that work at minimum cost?
On signalling, I notice that there is one signalling exercise—on Newcastle metro—but a number of schemes are needed for signalling. I do not understand why, in these days of advanced technical expertise, AI and the rest, we do not just have in-cab signalling, rather than having to continually replace—very expensively—the physical signalling resources across our network.
Lord Hendy of Richmond Hill (Lab)
I am pleased that the noble Lord welcomes Wellington, Cullompton and Portishead. The answer with Tavistock is that there were so many schemes in what the previous Government promoted as Restoring Your Railway, which on the face of it looked to be an invitation to any community in the country to wish back the railway that was taken away 50, 60 or 70 years ago because, frankly, it did not have many people or goods using it. The answer to the noble Lord is for Tavistock and Plymouth to put forward a sound business case for that investment that would reflect the actual costs of building that railway. I have some experience of that scheme at a much earlier stage, when somebody rather optimistically claimed that it would cost £30 million to extend from Bere Alston to Tavistock. The reality is that it would be not reopening a railway but building a new one, and to do that you need very substantial economic activity there.
The regular electrification programme would of course reduce costs, but we have significant electrification going on in this country. The trans-Pennine upgrade is a very significant electrification project from York to Manchester, and that is in the course of delivery at the moment. When Mark Wild has sorted out HS2 in management and governance terms, as he will, it will be a very significant piece of electrification to be carried out by those people.
In the medium term, one of the answers is for us to have a strategy that embraces both rolling stock and electrification, because it is clear that modern technology allows battery trains and that battery trains could replace diesel trains on quite a lot of the network; they would not need total electrification, but they would need some wires. The noble Lord may have seen that the proposals for East West Rail do precisely that—there will be wires up where it is cheap and convenient to put them up to charge the train in order to charge the batteries for when it would need to go through other places.
The noble Lord raises an interesting point about signalling, but I think the noble Baroness, Lady Pidgeon, had it right about the European train control system on the south end of the east coast main line. We need to move away from like-for-like replacement of existing signalling. Still more difficult, the cost of those schemes means that, almost inevitably, while the aspiration to replace 1950s and 1960s signalling always starts with more flexibility and more capacity, that flexibility and capacity have always been deleted out of those schemes because they cost too much, and what you actually get is a like-for-like replacement at really quite significant cost.
The opportunity with the ETCS on the south end of the east coast main line is to embed a system that has in-cab signalling and does not require fixed assets on the railway but can run more trains on the same railway, because the trains are intelligent and know where each other are. The advantage of doing it on the south end of the east coast main line is that many classes of locomotive and multiple unit will be fitted with equipment, which will mean extending it. Therefore, using it to replace conventional resignalling will be far more possible in future than it is now. It is a thoroughly good thing, and the noble Lord is right that that is the way forward.
Viscount Stansgate (Lab)
My Lords, I welcome the Statement. Reference has been made to applications by open access operators. Will my noble friend the Minister take this opportunity to update the House on the Government’s current view of capacity and capacity constraints on the east coast and west coast main lines?
Lord Hendy of Richmond Hill (Lab)
I thank my noble friend for that question. The truth is that we knew at the time of the cancellation of HS2 phase 2a that the original purpose of a new railway, originally all the way to Manchester, was to enhance capacity. We knew at the time that phase 2a was cancelled that there were no alternatives and, therefore, that the railway would be constrained north of Birmingham, as it currently is. The Government are thinking about what might be done about that, but until HS2 is built to Birmingham, the Office of Rail and Road has told applicants for open access on the west coast main line that there is simply no space left—and there is no space left. The ORR has had to consider its duty to promote reliability on the railway and encourage Network Rail to improve reliability, and it would be pretty hard to do so if at the same time it approved applications that did not have appropriately guarded train paths to achieve it.
We will see what happens on the east coast main line, where several applications are currently being considered by the ORR as an independent adjudicator. The truth is that one reason for ETCS on the south end of the east coast main line is that the east coast main line is largely full too. I draw the House’s attention to earlier discussions that we have had about the new east coast main line timetable, which has been long in coming and in the end had to be decided by me as the Rail Minister because it was so difficult to get agreement between the parties that had train paths and rights to train paths in order to produce a satisfactory timetable. The truth is that my noble friend is right: on both main lines there is a shortage of capacity, the solution to which can be achieved only through further investment.
Lord Cryer (Lab)
My Lords, it is widely recognised that rail privatisation has been a spectacular disaster, which is possibly why around 80% of British people, according to most polls, support rail renationalisation—including millions of Conservative voters, who the noble Lord, Lord Moylan, clearly thinks are closet Marxists planning the state takeover of everything. I have my doubts.
My noble friend has touched repeatedly on the fundamental problem with the rail network—a lack of capacity, in which we have not seen any real expansion for decades. At the same time, road congestion is costing billions to the economy, not just in passengers but more in freight. If there was some movement from road to rail for freight, it would have an enormous economic impact. An average freight train can take around 70 to 80 HGV journeys away from the road network, easing that congestion. This document is a step in the right direction but, in the longer term, a major expansion of the rail network will serve the country well into the distant future.
Lord Hendy of Richmond Hill (Lab)
I thank my noble friend for those observations. He is right that the Government would encourage more freight on railways—there was a Question on that very subject at Oral Questions this afternoon—which is why they are committed to a long-term rail freight increase target. He will be pleased to know that rail freight grew by 5% last year. It is important when determining timetables for the railways to leave capacity in the right places and at the right times for freight traffic to increase while not constraining the desire to operate a better passenger service. That is one of the reasons why Great British Railways, when it is established, will have control of the timetable to make those best possible judgments, which are not currently made for the railway as a whole despite the fact that it is so obviously a whole network. That is why the public support the Government’s position on managing the railway as a whole network.
Employment Rights Bill
(1 day, 10 hours ago)
Lords ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
“Contractual duties of confidentiality relating to harassment and discrimination(1) The Employment Rights Act 1996 is amended as follows.(2) After section 202 insert—“Harassment and discrimination: contractual duties of confidentiality
202A Contractual duties of confidentiality relating to harassment and discrimination(1) Any provision in an agreement between an employer and a worker of the employer (whether a worker’s contract or not) is void in so far as it purports to preclude the worker from making—(a) an allegation of, or a disclosure of information relating to, relevant harassment or discrimination, or(b) an allegation, or a disclosure of information, relating to the response of an employer of the worker to—(i) relevant harassment or discrimination, or(ii) the making of an allegation or disclosure within paragraph (a).(2) Harassment or discrimination is “relevant” for the purposes of subsection (1) if—(a) the harassment or discrimination consists of, or is alleged to consist of, conduct engaged in by—(i) an employer of the worker, or(ii) another worker of such an employer, or(b) the person who is, or is alleged to be, the victim of the harassment or discrimination is—(i) the worker, or(ii) another worker of an employer of the worker.(3) Subsection (1) does not apply to provision in an agreement (an “excepted agreement”) that satisfies such conditions as the Secretary of State may specify by regulations.(4) But the Secretary of State may by regulations provide that any provision in an excepted agreement is void in so far as it purports to preclude the worker from making an allegation or disclosure within subsection (1)(a) or (b)—(a) to a specified description of person;(b) for a specified purpose;(c) in specified circumstances.(5) The Secretary of State may by regulations—(a) provide for this section to have effect as if references to a worker included a specified description of individual who is not a worker as defined by section 230(3) but who—(i) works or worked, or is or was provided with work experience or training, in specified circumstances, or(ii) has entered into, or works or worked under, a relevant contract of a specified description;(b) make provision as to who is to be regarded as an employer of such an individual for the purposes of this section.(6) In subsection (5), “relevant contract” means any contract, other than a contract of employment, whether express or implied and (if express) whether oral or in writing, by which an individual undertakes to do or perform (whether personally or otherwise) any work or services for another party to the contract whose status is by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual.(7) Regulations under this section may—(a) make different provision for different purposes;(b) make consequential provision. (8) For the purposes of this section, the holding, otherwise than under a contract of employment, of the office of constable or an appointment as a police cadet is to be treated as employment by the relevant officer under a contract of employment.“The relevant officer” has the meaning given by section 43KA(2).(9) Nothing in this section affects the operation of any other enactment or rule of law by virtue of which provision in an agreement may be void.(10) In this section—“discrimination” means discrimination within section 13, or any of sections 15 to 19A, of the Equality Act 2010;“harassment” means harassment of the kind described in subsection (1), (2) or (3) of section 26 of that Act;“specified” means specified in the regulations.”(3) In section 192(2) (provisions of Act which have effect in relation to armed forces)—(a) omit the “and” at the end of paragraph (e);(b) for paragraph (f) substitute—“(f) this Part, apart from section 202A, and(g) Parts 14 and 15.”(4) In section 193 (provisions of Act which do not apply in relation to the security services), for “section 47B” substitute “sections 47B and 202A”.(5) In section 194(2) (provisions of Act which have effect in relation to House of Lords staff)—(a) omit the “and” at the end of paragraph (g);(b) for paragraph (h) substitute—“(h) this Part, apart from section 202A, and(i) Parts 14 and 15.”(6) In section 195(2) (provisions of Act which have effect in relation to House of Commons staff)—(a) omit the “and” at the end of paragraph (g);(b) for paragraph (h) substitute—“(h) this Part, apart from section 202A, and(i) Parts 14 and 15.”(7) In section 236(3) (regulations subject to affirmative procedure), after “125(7)” insert “, 202A”.”Member's explanatory statement
This new clause provides that provision in an agreement between an employer and a worker is void in so far as it purports to prevent the worker making an allegation or disclosure of information relating to certain work-related harassment and discrimination.
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, this amendment is on the important issue of non-disclosure agreements. NDAs have their legitimate purposes, but they should never be used to take unfair advantage of workers and to cover up workplace misconduct. Evidence has emerged in recent years that some employers have been doing just that.
I praise the work of campaigners who have brought this evidence to light—notably Can’t Buy My Silence, spearheaded by Zelda Perkins, who has been an impassioned campaigner for change for many years and is one of many brave victims who have spoken up. This evidence shows that some employers exploit the inherent imbalance of power they have with their workers and get NDAs signed, fostering a culture of silence and impunity.
I acknowledge the strength of feeling expressed across the House in Committee and thank noble Lords —as well as those in the other place—for raising the evidence for change in Parliament and for their powerful interventions on this issue. I thank in particular the noble Baronesses, Lady O’Grady, Lady Chakrabarti, Lady Kennedy, Lady Morrissey, Lady Goudie, Lady Harman and Lady Kramer.
The Government have listened to those calls for action and tabled Amendment 46. This amendment will void any provision in an agreement, such as a contract of employment or settlement agreement, between a worker and their employer in so far as it prevents a worker speaking out about relevant harassment or discrimination.
Let me be clear that this amendment will not impact on the legitimate use of NDAs—for example, to protect commercially sensitive information, ideas or intellectual property in business transactions. Relevant harassment or discrimination is defined in line with the existing definitions in the Equality Act 2010 and is conduct which the worker or a co-worker has suffered or is alleged to have suffered, or conduct carried out or alleged to be carried out by the employer or a co-worker—for example, where a colleague tells another colleague that their boss has sexually harassed them. This will mean that workers who have experienced harassment or discrimination can speak up, as well as those who have witnessed misconduct or who have knowledge of it.
Baroness Kramer (LD)
My Lords, I will speak to all three amendments in this group, the second two of which are in my name.
I begin by thanking the Government for listening to and acting on the concerns of victims of harassment and discrimination, who have risked so much by speaking out for justice despite being bound by non-disclosure agreements. The Government’s Amendment 46 brings in radical change, as the Minister has described. I join the Minister in particularly mentioning Zelda Perkins of Can’t Buy My Silence; behind her have been other civic society groups, which have been unfailing and determined, and have refused to be discouraged.
I congratulate MPs who spoke out in the Commons. In this House, I was very glad that the Minister mentioned the names of the many noble Baronesses across the Benches who have been involved. I know that the noble Baronesses, Lady Kennedy, Lady Morrissey and Lady Chakrabarti cannot be here today. We had all expected the amendments to come up on Wednesday, so with this sudden change of plan, they are here in spirit and will continue to watch over this legislation.
I also think she was right to take note of the engagement by the noble Baroness, Lady O’Grady, because her years leading the trade union movement gave the Government the confidence they needed to take action. For that, we always remain respectful and grateful.
The Government will face a complex task in fashioning the regulations which must underpin this clause. Some NDAs, for example, are designed to protect children who are third parties in an event from disclosure of very personal details. This is complex and not easy issue. Those of us on these Benches will be watching very closely as the regulations are developed.
However, there is a key weakness in the proposed clause, which I am aware the Government cannot tackle in this Bill because of its scope. The clause and its protections apply only to workers and, indeed, to a narrow definition of workers which sits within the pre-existing legislation on disclosure. So, for example, a would-be actress interviewed by Harvey Weinstein would not be covered because she is not within the definition of worker. Now, an employee of Weinstein’s company could safely speak out on her behalf with this new legislation—that is the Zelda Perkins example—if they had witnessed harassment, so it is a real improvement.
However, the clause does not protect a job applicant, a company director, a self-employed contractor or a supplier—although I know the Government are looking at this issue—even though all of these people could lose their careers or sometimes their businesses by speaking out. We on these Benches will not stop this particular weakness preventing us supporting this amendment. We thoroughly do. However, it illustrates just how much more reform is needed to have a fully workable and effective framework for all people to speak out—and that leads me to the two other amendments in this group.
Amendment 95, in my name, would set up an office of the whistleblower to protect whistleblowers, oversee whistleblowing processes and enforce compliance with standards. It would bring redress against detriment, it would cover everyone—worker or not, public or private sector—and deal completely with the weaknesses in the NDA clause. I thank WhistleblowersUK and the numerous KCs who helped draft it. It really has had the work of some of our leading lawyers.
The office would act on a hub-and-spoke basis with existing regulators and investigators, almost all of whom are keen to see it in place because it delivers them the whistleblowing they need to be effective and to make the best use of their limited resources. Whistleblowers tell you where in the haystack to look and provide information from the inside that enables regulators, investigators and enforcement agencies to take action.
The Government are also committed to a duty of candour. I know there has been a bit of a hiccup this week, but the Hillsborough Law Now action group, which works so hard on duty of candour, will also tell them that the duty works much better if it is complemented by an office of the whistleblower, which then gives protection against detriment to those who do speak out as they should. The office is also not an expansion of regulation; Ministers have said it is, but it is not. It streamlines existing processes and provides mechanisms to enforce existing regulations, laws and sanctions. Experience in the US demonstrates that an office of the whistleblower becomes a major deterrent to bad actors. We would all want that. The US experience also suggests that the office would pay for itself within two years from recouped moneys and prosecutions, and then contribute substantial funds to the Treasury.
I recognise this is not the perfect Bill in which to place this reform, so I am looking to the Government to reassure me that they are seizing the issue. I hope that we are going to hear from the Minister in closing that the Grant Thornton review of the whistleblowing framework will be made public shortly. However, given that the terms of reference for that report were so narrow, I am also looking for a commitment to seriously —and in a timely way—progress to proper whistleblowing protection.
The third amendment in this group is Amendment 96 and was drafted by the noble Lord, Lord Willis, together with the civic society group Protect, and signed by him, me and the noble Baroness, Lady Morgan of Cotes. Neither the noble Lord nor the noble Baroness can be here today, so in a sense I am voicing for them. This amendment is an interim attempt to patch up some of the worst gaps in the present legislation we have on disclosure and whistleblowing until we get broader reform. It gives the Secretary of State powers to expand the range of unfair dismissal. Often, someone is a recognised whistleblower but the employer says, “No, we’re actually dismissing you because you’re not a good team player”, and it puts the whistleblower into an impossible position in the context of the employment tribunal, so that is exactly why this change is necessary.
It also requires employers to take reasonable steps to investigate disclosures. I know the noble Lord, Lord Willis, cannot conceive why the Government have not agreed to this amendment and it may be that he will be keen to test the opinion of the House if there is no significant reassurance that we can get some quick movement to try to deal with some of these most egregious circumstances. I have said that, if he cannot be present on Wednesday, when the issue would possibly come to a vote, I will act on his behalf.
Let me close by congratulating the Government. I hope that this strive forward on NDAs will make the Government eager to seize the whole whistleblowing agenda. The Government have already heard the acclamation, the congratulations and the real pleasure that the nettle has been grasped on an issue which is difficult and the Government have made a very significant change. However, surely we cannot allow a repeated flow of scandals, criminality and cover-up to both sully our country and cost so many so dear. I say to the Government, “Bravo for all you have done and, moving forward on the rest, please act—and act soon”.
Baroness O'Grady of Upper Holloway (Lab)
My Lords, it is real pleasure to follow my noble friend Lady Kramer and to add my strong support to my noble friend the Minister and the Government’s Amendment 46 on non-disclosure agreements. This will make the UK a world leader in legislation to end the silence around workplace harassment and discrimination.
Neary 10 years ago, the TUC conducted the biggest survey of its kind in Europe, which found that half of all women had experienced sexual harassment at work, and that figure rose to two-thirds of young women. Women on insecure contracts, including agency and zero-hours contracts, were the most vulnerable of all. Too often, women subjected to harassment felt they had no choice but to leave their jobs, risking their careers and livelihoods. Meanwhile, too often, the perpetrator remained in post, free to harass others.
I will always remember one young woman who quit her job after increasingly disturbing comments made by her boss. At her leaving party, he told her that his only regret was that he had not had the chance to get her in the store cupboard and rape her. This is why many of us believe so strongly that harassment is not a joke or a bit of banter, and is not to be trivialised. Whether it is racism, sexism or any other form of prejudice and discrimination, it is an abuse of power that has real-life consequences for those who suffer it. Settlement agreements with non-disclosure clauses compound the lack of power that many of those subjected to harassment feel.
This amendment is about protecting the free speech of victims and witnesses to harassment. This new right will not stop the use of settlement agreements, but it will stop them being used to gag victims. It puts the victims of and witnesses to abuse in the driving seat. They can decide whether they want to talk about the experience and who they want to talk to. That should give every perpetrator pause for thought.
As well as noble Lords on all sides who have supported this amendment—I see the noble Lord, Lord Cromwell, too—and our own Minister, the noble Baroness, Lady Jones, I also congratulate the Deputy Prime Minister, Angela Rayner, the Employment Minister, Justin Madders, and the brilliant Lou Haigh MP for championing this change.
Like others, my last word of praise goes to all those campaigners, and certainly not least to Zelda Perkins and the campaign Can’t Buy My Silence. Zelda broke her silence eight years ago, and ever since has spoken up fearlessly on behalf of victims and survivors. I am so very proud.
We will still be watching, but I am so very proud that this Labour Government have really listened.
Lord Cromwell (CB)
I will speak very briefly on the three amendments. I am very grateful to the noble Baroness, Lady O’Grady, for namechecking me among the illustrious supporters.
First, on government Amendment 46, I have been going on about NDAs and whistleblowers for a long time over the years and it is great to finally get to a day where we have legislation that is actually gripping it. I agree with the reservations of the noble Baroness, Lady Kramer, about it applying to workers only—but, my goodness, this is a substantial beachhead into a problem that is long overdue for settlement.
I support Amendment 96. The unfair dismissal aspect is so obvious that I do not think it needs any words from me. In particular, I am interested in supporting the duty to investigate side of it. I often say that Parliament loves to make laws and then never resources the enforcement of them. Organisations love to make policies about whistleblowing—to coin a phrase, “big, beautiful policies” about whistleblowing. The trouble is that, when it comes to somebody actually trying to whistleblow in practice, the reception is very often the three Ds: delay, dismiss and deny.
This amendment gives the opportunity to remove something that is not only unfair to the individual employee but is corrosive of business efficiency and a betrayal of investors’ interests in whatever the business or organisation is. I remind the House that whistleblowing is not just about sexual harassment, vitally important though that aspect is. It can be about criminality of a whole range of kinds which, if not revealed, is very corrosive to business and damaging to investors, who take a keener interest than some people realise in whistleblowers. To bring a duty to investigate will be a great step towards resisting the temptation and ability to cover up issues brought up by whistleblowers.
Finally, on Amendment 95, the noble Baroness, Lady Kramer, has very long championed the office of the whistleblower. For all the reasons we have discussed tonight, it is of benefit to whistleblowers and organisations to have this office put in place. There is such a lot of work to do in terms of their knowledge and support, with so much need out there. I do not think I need say any more; I am just very happy to once more support the enthusiasm of the noble Baroness, Lady Kramer, for the office of the whistleblower.
Baroness Goudie (Lab)
I very much thank the Minister and her officers for all the time they have given us over the last year in being able to get this clause on the statutes tonight. I also thank my colleagues in the other place, in particular Lou Haigh and the Deputy Prime Minister, Angela Rayner, for the work they have done and encouragement they have given us in this House to continue with the campaign.
I also thank the Diversity Project and Zelda Perkins’s group for their work with us over a longer time than we have today. Non-disclosure agreements need to be properly regulated and not permitted to continue in the way they have been, with their chilling effects.
This is especially so when the disclosure ban applies to the context of an employee and an employer and relates to harassment, bullying or discrimination, including impartiality and sexual harassment, which is one of the worst things that can happen to anybody and ruins their life completely. I am really grateful to everybody who has been kind enough to work with me over these months and years.
Baroness Ramsey of Wall Heath (Lab)
My Lords, I speak on behalf of my noble friend Lady Kennedy, who, due to recent surgery, cannot be here this evening, but also on behalf of other women around the House, all of whom have pressed for amendments on the issue of NDAs being used to silence women who experience sexual harassment in the workplace.
I know that my noble friend Lady Kennedy worked closely with the courageous Zelda Perkins on her campaign to change the law. We all want to pay tribute to our noble friend the Minister for the vital role that she has played in bringing the Government on board to change the law with the amendments—our warm congratulations to the Minister.
Lord Lucas (Con)
I congratulate the Government on this excellent amendment, and I join the thanks to Zelda Perkins and her colleagues for their tireless efforts to bring it to this point. I have a few questions for the Minister about the Government’s intentions, or present thoughts, regarding the secondary legislation. In particular, is it right that employers will not be permitted to suggest confidentiality? Will there be mandatory independent legal advice? Will confidentiality be time limited, or at least have an opt-out? Will the excepted individuals to whom the victim can speak include someone the victim knows, a friend or a relative, not just independent professionals? Will non-disparagement clauses also be caught by this amendment?
Lord Hunt of Wirral (Con)
My Lords, this has been a very important debate and I thank the Minister, the noble Baronesses, Lady O’Grady of Upper Holloway, Lady Goudie and Lady Ramsey of Wall Heath, the noble Lord, Lord Cromwell, and my noble friend Lord Lucas for their contributions. In particular, I congratulate and thank the noble Baroness, Lady Kramer, especially for Amendments 95 and 96. They are vital and long overdue, and I support them very strongly indeed. They strike at the very heart of what it means to have a fair, transparent and accountable workplace. Too often, whistleblowers have faced retaliation, dismissal and isolation, not because they have done anything wrong but because they have identified where something has been severely wrong. That is a moral failure in our system, and it is one that this House must now move to correct.
Workplace harassment, abuse, corruption and mismanagement are not minor private inconveniences to be swept under the carpet but serious matters of public interest. It is precisely in the public interest that these amendments redefine what constitutes a protected disclosure and establish an independent office of the whistleblower. As the noble Lord, Lord Cromwell, just pointed out, this new body would be more than just symbolic. It would enforce real standards, offer real protections and provide real redress for those who are brave enough to come forward. It would finally send a clear signal to employers that retaliation is no longer ever going to be tolerated and that burying the truth behind legal threats and non-disclosure agreements has to stop.
It is particularly important that these protections extend to disclosures around violence, harassment and abuse in the workplace. These are areas where silence is too often enforced and where whistleblowing can save others from further harm. I urge the Government to take this opportunity to stand firmly on the side of transparency, accountability and justice.
Baroness Jones of Whitchurch (Lab)
My Lords, I thank all noble Lords for their support for our amendment. I assure your Lordships that we will follow it through to full implementation.
The noble Lord, Lord Lucas, asked a number of specific questions. There will be further consultation on the regulations, but I assure all noble Lords around the House of the Government’s absolute determination to get this and the regulations on to the statute book. I know that noble Lords will hold our feet to the fire; I will be doing that as well, to my own Government. We will deliver on this.
Moving on to Amendments 95 and 96, whistleblowers play an important role in exposing wrongdoing and malpractice in the workplace. It is vital that workers are able to come forward with concerns without suffering adverse treatment by their employer. That is why whistleblowers have been protected from dismissal and detrimental treatment under the Employment Rights Act since reforms were introduced in the UK in 1998 through the Public Interest Disclosure Act. However, some time has passed since these world-leading reforms were introduced. The Government acknowledge concerns from noble Lords and others that the whistleblowing framework may not be operating as effectively as it should be.
That is why we are taking a range of actions to strengthen the framework. Through the Employment Rights Bill, we are introducing a measure that will expressly make sexual harassment the basis for a protected disclosure. This will provide welcome clarity for workers and have wider benefits, including encouraging more workers to speak up about sexual harassment by using whistleblowing routes. The measure will signal to employers that workers who make protected disclosures about sexual harassment must be treated fairly, as workers will have legal recourse if their employer subjects them to detriment as a result.
Additionally, we have committed to implementing professional standards for NHS managers to hold them accountable for silencing whistleblowers or endangering patients through misconduct. Most recently, the Government amended the Public Interest Disclosure (Prescribed Persons) Order 2014 to allow workers to make protected disclosures to relevant government departments on suspected breaches of sanctions. These changes will help workers to qualify for employment protections when disclosing information on financial, transport and other trade sanctions to government and to seek redress should they suffer detriment or dismissal due to making a protected disclosure.
The amendments proposed in this group would make substantial changes which should be considered as part of a broader assessment of the operation of the whistleblowing framework. For example, the amendment that would create an office for the whistleblower would introduce a significant structural change to that framework. The Government also note that there are differing views among stakeholders about the role of a new body.
However, as an indication of the continued movement in this space by the Government, I am pleased to announce that the Government are today publishing the research report on the whistleblowing framework, which was undertaken by the previous Government. The report provides observations and insights about the operation of the whistleblowing framework, obtained from stakeholder engagement, and a literature review, which will be a positive contribution to debate. The Government look forward to engaging stakeholders about that report and the proposal for reform. On that basis, I ask the noble Baroness, Lady Kramer, not to press Amendment 95.
Lord Lucas (Con)
I beg the Minister, if I might, for a letter in response to my questions. I quite understand that she cannot answer them now.
Baroness Jones of Whitchurch (Lab)
I am sure that we can write and provide some clarification on that. I commend Amendment 46 to the House.
Baroness Smith of Llanfaes
“Duty to prevent violence and harassment in the workplace(1) Section 2 of the Health and Safety at Work etc. Act 1974 (general duties of employers to their employees) is amended as follows.(2) After subsection (2)(e) insert—“(f) the adoption of proactive and preventative measures to protect all persons working in their workplace from violence and harassment, including—(i) gender-based violence; (ii) sexual harassment;(iii) psychological and emotional abuse;(iv) physical and sexual abuse;(v) stalking and harassment, including online harassment;(vi) threats of violence.”.(3) After subsection (3) insert—“(3A) It shall be the duty of every employer to prepare, and as often as may be appropriate revise, an assessment to identify potential risks of violence and harassment in the workplace and implement policies and procedures to eliminate these risks so far as is reasonably practicable.(3B) It shall be the duty of every employer to provide training to all employees on recognising and preventing violence and harassment in the workplace, with a focus on gender-responsive approaches.(3C) In subsection (3B) a “gender-responsive approach” means taking into account the various needs, interests, and experiences of people of different gender identities, including women and girls, when designing and implementing policies and procedures.(3D) In this section, “persons working in the workplace” includes—(a) employees,(b) full-time, part-time, and temporary workers, and(c) interns and apprentices.(3E) In subsection (2)(f) and subsections (3A) and (3B), a reference to the workplace includes remote and hybrid work environments.”.”Member’s explanatory statement
This new clause would amend the Health and Safety at Work etc. Act 1974 to place a duty on employers to protect all those working in their workplace from gender-based violence and harassment.
Baroness Smith of Llanfaes (PC)
My Lords, I will also speal to my Amendment 48. I have tabled these amendments to address a critical and long-standing gap in how we protect workers from sexual harassment and gender-based violence in the workplace. They are, at their heart, about prevention and ensuring that employers have a proactive duty to make workplaces safer, and that the Health and Safety Executive has a clear, enforceable role in holding them to account. As we all know, prevention is better than cure. They seek to amend the Health and Safety at Work etc. Act 1974 to place an explicit duty on employers under the oversight of the HSE to prevent workplace harassment and violence, including sexual harassment and gender-based abuse.
Baroness Kramer (LD)
My Lords, I am going to speak very briefly, because the noble Baroness, Lady Smith of Llanfaes, has given such an effective speech, which outlines the issue, and the hour is late.
When she first came forward with the proposal for the Health and Safety Executive, I thought, “My goodness, here is a body that could effectively deal with harassment and violence in the workplace, because it knows how to respond very quickly to situations that put people into an unsafe set of circumstances”. I suspect that, when the HSE was first put in place, sexual harassment and violence were probably considered somewhat acceptable, or they were domestic or private. They were certainly not something that an employer or workplace should be concerned about. Well, times have changed and we no longer look at it that way.
It is therefore entirely appropriate to update the HSE’s role to take on these issues. It is very easy to see how effective that organisation could be in closing down both harassment and violence. It is a respected organisation; people in a workplace know that it will act and it will enforce. Those kinds of behaviours make a great difference to the whole culture within the workplace. So I thought that this was an ingenious approach, which I very much want to back, because we all want to stop violence and harassment and here is a mechanism that does that with very little change to the existing organisational structures, but by giving power and responsibility to an organisation that has the capacity to deal with the problems effectively.
Baroness Bennett of Manor Castle (GP)
My Lords, I will speak very briefly. It is a great pleasure to follow the noble Baroness, Lady Kramer, who very powerfully made the case for Amendment 48. I am going to focus on Amendment 47. The noble Baroness, Lady Smith of Llanfaes, has already made the case for that very powerfully, but I will add one very recent set of statistics to it.
The noble Baroness mentioned unions and, just last week, Unite put out a study that polled women across the 19 sectors of work that it covers. It found—these figures are truly shocking—that a quarter of respondents said that they had been sexually assaulted at work, in a workplace-related environment or on the way to and from work. Some 8% said that they had been a victim of sexual coercion at work. This is the sort of situation that was referred to by the noble Baroness, Lady Smith.
People are in insecure employment and zero-hours contracts, which the Government are doing something about—perhaps not quite enough but something. If you are in a situation where you desperately need those hours and the supervisor decides where on the rota you are and how many hours you will get, that puts the supervisor in an incredible position of power, which can and clearly is being abused.
What is really telling is that 56% of respondents said they had heard a sexually offensive joke at work and 55% had experienced unwanted gestures or sexual remarks. I am sure the government response will be to tell us that they are taking measures to react, but, crucially, Amendment 47 sets out a responsibility to prevent it happening.
This really needs to be regarded as a public health measure. We hear often in your Lordships’ Chamber about the issues around mental health and well-being and the problems we have in our society. If you are forced to keep going into a workplace that is actively hostile to you, with gender harassment and abuse, then that will be very bad for you and for the company. As a society, we should not tolerate it.
Lord Sharpe of Epsom (Con)
My Lords, I thank the noble Lords who have contributed to this debate, and in particular the noble Baroness, Lady Smith of Llanfaes, for introducing it. We must, of course, recognise that violence and harassment in the workplace are unacceptable in any form. It is also important to acknowledge that women, particularly in certain sectors, are often at greater risk and may face additional barriers to speaking out or seeking redress.
This amendment raises serious and pressing concerns about how we ensure that all workplaces are safe, inclusive and free from abuse. The call for more proactive duties on employers and greater involvement from the Health and Safety Executive is one approach to addressing these challenges. However, as with any proposed legislative change, it is right that we consider carefully the potential implications, including how such duties would be enforced, the capacity of the Health and Safety Executive, and how we balance existing legal protections with any new obligations we would place on employers. I am very interested to hear what the Minister has to say on this point, particularly with regard to how the Government see the role of regulation, guidance and support in preventing workplace violence and harassment.
In Amendment 47, my interest was piqued by subsection (3C) to be inserted by the proposed new clause, which refers to
“gender identities, including women and girls”.
That seems to me to stray dangerously on to Supreme Court territory, which, as I understand it, we have yet to hear the EHRC’s guidance on. It strikes me as a tad premature, but I am interested to hear what the Minister has to say on it.
Lord in Waiting/Government Whip (Lord Leong) (Lab)
My Lords, I thank all noble Lords who have contributed to this short debate, and I thank the noble Baroness, Lady Smith of Llanfaes—I apologise if I have mispronounced that—for tabling these amendments. I reassure her that the Government are fully committed to protecting workers from workplace violence and harassment, in particular gender-based violence and harassment.
The current strong regulatory framework ensures that workers are protected from such risks. Employers currently have a clear duty to protect their workers from health and safety risks under the long-established Health and Safety at Work etc. Act 1974 and the statutory provisions made under it. That includes taking action to prevent workplace violence. They are required to assess those risks and take appropriate steps to eliminate or reduce them.
As part of this existing regulatory framework, the Management of Health and Safety at Work Regulations 1999 require employers to assess risks that arise from work activity, including the potential for violence, and take suitable action to reduce or eliminate those risks. The Health and Safety at Work etc. Act 1974 and its associated regulations cannot be used for issues that arise outside of work activity, as that would result in the Health and Safety Executive operating ultra vires.
The HSE and local authorities, which are responsible for enforcing the Health and Safety at Work etc. Act 1974, take both proactive and reactive measures to ensure that employers are complying with their duties. This includes ensuring that employers assess risks and implement appropriate measures to protect their workers and anyone else affected by their work from workplace violence.
The HSE has also published accessible guidance on its website to help employers comply with their legal obligations. In the noble Baroness’s proposal, there is a request for the HSE to publish a health and safety framework specifically focused on violence and harassment in the workplace. However, this framework already exists as employers have duties under the Management of Health and Safety at Work Regulations to ensure they have sufficient arrangements in place to manage health and safety risks arising out of work activity, including violence and aggression. Where an employer is found to have breached health and safety law, the HSE does not have powers to issue fines. When a significant breach is identified and the case meets the threshold for prosecution under the Code for Crown Prosecutors, the HSE brings employers to account through the criminal justice system. It is then for the courts to decide the penalties subsequently imposed if an employer is found guilty of such offences, and any fine imposed by the courts goes directly to His Majesty’s Treasury.
Baroness Smith of Llanfaes (PC)
I thank the Minister for his answer. I must admit that that answer does not counter the fact that the burden of proof remains on individuals rather than employers. I have previously shared a number of cases where, for example, big companies have had lots of media attention around lots of harassment claims but have only received a warning letter from the EHRC, in comparison with other businesses—for example, the two care homes whose cases I shared—that are treated very differently. So I am not convinced that what we currently have in regulation actually makes a difference to individual workers who are experiencing these incidents in their workplace. However, I am grateful to the Minister for recognising the importance of prevention and that there is more to be done. So, on this occasion, I will withdraw my amendment, but we will be pressing this with the Government further.
I will welcome the opportunity to look at this, particularly when the VAWG strategy is published in September. However, I must remind the Government that there has to be a cross-departmental approach. It should not be up to just one department to set it out; there is also a responsibility for this department to use all the options it has. Just doing good is not good enough—why cannot we try to achieve the best outcomes for these workers? On this occasion, I beg leave to withdraw my amendment.