Jobs Market
Lord Hunt of Wirral
To ask His Majesty’s Government what assessment they have made of the jobs market, and of the implications for the wider economy.
Lord in Waiting/Government Whip (Lord Katz) (Lab)
My Lords, this Government’s No. 1 mission is to grow our economy. We want a thriving, inclusive labour market with more people in good jobs, high living standards and productivity growth in every part of the country. The employment level has risen by 600,000 since the election, and we mean to go on as we have started, delivering our planned reforms to provide people with the work, health and skill support they need to succeed.
Lord Hunt of Wirral (Con)
My Lords, we all regret the current upward trend in unemployment. As the evidence shows, when economic growth returns, only a flexible labour market will deliver that much-needed jobs dividend. What assessment have the Government made of the likely impact of the Employment Rights Bill on the flexible labour market we all need?
Lord Katz (Lab)
My Lords, I have enjoyed debating with the noble Lord, Lord Hunt of Wirral, over too many days to recall, the merits of the Government’s Employment Rights Bill. To be clear, the plan to make work pay is a once-in-a-generation transformation of our labour market to make it fairer and more inclusive, and to deliver the day one rights the country needs. It will introduce ground-breaking reforms such as bereavement leave for those who suffer miscarriages, ensure fair pay for the social care sector, and ban the use of NDAs in cases of sexual discrimination and worse. Let us be clear: we are also repealing the previous Government’s failed trade union legislation, which delivered for this economy record levels of days lost to strikes in 2022 and 2023—a record they cannot be proud of. We are fixing their mess by introducing the Employment Rights Bill.
Lord Woodley (Lab)
My Lords, concerning changes to the jobs market, changes to the skilled worker visa mean that public sector workers, including prison officers, can now face deportation because the salary threshold has jumped over their wages—which ignores why we wanted them here in the first place. Therefore, will the Minister make the case to the Home Office that prison officers should be exempted from this arbitrary limit and that their employers should also help to pay their legal costs?
Lord Katz (Lab)
My noble friend makes a very strong point. He will be aware that in the recently published immigration White Paper, the Home Office outlined the steps it is taking to reduce net migration while supporting the labour market across all sectors. On the part of the DWP, my department will play a key part in this work, sitting, as a member of the new labour market evidence group, alongside the Migration Advisory Committee, the Industrial Strategy Advisory Council, Skills England and the relevant devolved skills bodies. I am sure that that will address the concern my noble friend has outlined.
Lord Palmer of Childs Hill (LD)
My Lords, what assessment have the Government made of how far the increase in employers’ NICs in April 2025 led to a further switch-out of regular employment into contract work or self-employment as a means of employers avoiding employers’ NICs? There is some evidence that this has been happening, and it is bad news for the public purse, as contractors pay a lot less in NICs and individual workers miss out on all the standard employment rights, including workplace pensions, paid holidays, sick pay et cetera.
Lord Katz (Lab)
The noble Lord will be aware that in the Employment Rights Bill we are undertaking a sector-wide, labour force-wide reassessment and review of employment status that will take into account employment, freelance, self-employment and contracted status. I understand the question. Going back to the original point of the noble Lord’s question, we had to take some very difficult decisions as a Government upon coming into office and finding the £22 billion black hole legacy.
Lord Katz (Lab)
Noble Lords opposite may groan and sigh, but I am afraid the fact is that we cannot, in a year, undo the damage they did to the economy and the public finances in 14 years. We absolutely have had to take some difficult decisions on national insurance, but we have also taken steps to support employers to hire, including the smallest businesses, by doubling the employment allowance and launching a new employer commitment that sets a minimum service standard for employers working with Jobcentre Plus to fill vacancies. We have engaged with key growth sectors and industrial strategy sectors and have added 151 new employers to our portfolio. This is just a start, but it is going to be a long journey to undo the damage that the Benches opposite did to our country and our economy.
Lord Londesborough (CB)
My Lords, since the Chancellor announced the £25 billion hike in employers’ national insurance, we have seen the number of people on the PAYE payroll fall in seven of the past eight months, vacancies, especially for SMEs, declining every month and, most worrying of all, GDP per capita and labour productivity both falling. How much more evidence do the Government need before facing up to the fact that raising NICs is not only damaging the employment prospects of the so-called working person but has effectively destroyed that much-vaunted mission of delivering the fastest rate of economic growth in the G7?
Lord Katz (Lab)
My Lords, I appreciate what the noble Lord says, but employment in the UK is at a record high—more than 34 million in March to May 2025. The number of jobs in the economy is at a record high; there is a record number of women in employment; and the proportion of 16 to 24 year-old NEETs has fallen in this quarter and, indeed, in the whole year. We are fixing the damage that the party opposite did to our economy, and we intend to continue that journey.
Viscount Younger of Leckie (Con)
My Lords, feedback from the latest quarterly ONS vacancy survey for April to June suggests that some firms may not be recruiting new workers or replacing workers who have left, and growth decreased in 14 out of the 18 industry sectors. It is alarming that the largest decrease in vacancies was in the construction sector—31.9%, falling by 14,000 on the quarter. The Minister talks about growth, but when is it going to start, and when is housebuilding going to start in earnest? The 1.5 million houses to be built by 2029 looks like a distant dream.
Lord Katz (Lab)
The noble Viscount will be aware that in March, the Government announced the new Construction Skills Mission Board, which has already met. It will help to ensure that employers are able to work collaboratively to secure the workforce they need to meet future demand, and to build the houses we so desperately need. Our department is working closely with MHCLG and across government to support the delivery of the Government’s commitment to build 1.5 million homes this Parliament. I should add that we are introducing foundational apprenticeships, which will be underpinned by an employer incentive payment to contribute to the extra cost of supporting someone at the beginning of their career. So, whether it is young people going into the workforce or into construction, or the delivery of the housing we need, we have a plan and we are working to it.
Baroness Smith of Llanfaes (PC)
My Lords, the Institute of Student Employers has found that in 2023, there were an average of 140 applicants per graduate role, the highest in over 30 years. What specific initiatives are His Majesty’s Government supporting for the creation of more graduate jobs outside London?
Lord Katz (Lab)
My Lords, as part of the Get Britain Working plan, we are ensuring that there are local growth plans across the economy, because we recognise that different labour markets have different needs, and different populations in the different areas, regions and indeed nations of our country have different profiles and skills levels. We are determined to get the whole country working through a number of different ways, including reforming Jobcentre Plus and creating a new service across Great Britain, bringing together Jobcentre Plus with the National Careers Service in England so that we can move from box-ticking to job-finding.
Lord Watts (Lab)
My Lords, did not the previous Government leave us with a legacy of poverty pay and a lack of training in the workforce, meaning that we have plenty of vacancies but not the skills to fill them? Is that not a disgrace?
Lord Katz (Lab)
Of course my noble friend is utterly right. [Laughter.] Noble Lords opposite laugh, but this is no joking matter. One year in, and we are still uncovering the damage they did to our economy. We are making progress, and we will continue to do so. I repeat: employment and real earnings are up, economic inactivity is down and our economy is going in the right direction. That is why, under this Government, unlike the last, we are the fastest-growing economy in the G7.
Pensions: Low-income and Self-employed Workers
(3 days, 12 hours ago)
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Viscount Younger of Leckie
To ask His Majesty’s Government what steps they are taking to encourage greater pension saving, and to improve pension adequacy, particularly for low-income and self-employed workers.
Baroness in Waiting/Government Whip (Baroness Anderson of Stoke-on-Trent) (Lab)
My Lords, automatic enrolment has transformed workplace pension participation, with over 22 million employees participating in 2023. However, we know that many people are still not saving enough to enjoy a financially secure retirement. For some groups, particularly those not eligible for auto-enrolment, such as the self-employed, pension participation remains low. The newly announced Pensions Commission will explore wider steps to improve pension outcomes, especially for those at the greatest risk of undersaving, including low-income and self-employed workers.
Viscount Younger of Leckie (Con)
My Lords, we welcome the setting up of the commission under the chairmanship of the noble Baroness, Lady Drake. Making the case for saving for retirement is crucial, given that the DWP has highlighted that 15 million people are saving too little for retirement, which is about half the workforce. Currently, helped by extended auto-enrolment, 8% is put into pension pots, with 5% by the employee and 3% by the employer. Pensions experts think that the total, however it is split, should be at least 12%, but lower-paid workers, including the self-employed, earning between £10,000 and £20,000, if they are saving, are in effect saving on average only 5.5%. I am surprised that the commission is not reporting until 2027. Why is that? What can the Government do right now in the meantime, beyond auto-enrolment, to encourage greater savings for retirement?
Baroness Anderson of Stoke-on-Trent (Lab)
It is a delight to stand here and enjoy cross-party support for a new provision, and I thank the noble Viscount. On his point about the level of employer contribution, the Government have been clear that there will be no increase in the current rate in this Parliament, but the noble Viscount makes a genuine point about how we make sure that people have enough money in retirement. That is why we have established a new Pensions Commission to look at these issues in the round. The noble Viscount states that 18 months is a long time, but the last Pensions Commission took five years. We are talking about matters that will have an impact for decades to come, and so we need to make sure we have the right steps in the right place at the right time. Auto-enrolment was an incredibly important step that has nearly doubled the number of people saving. No pressure on my noble friend Lady Drake, but she now has a significant job to do to make sure we are fit for the future, so that future generations, including my own, have the right level of pension savings.
Lord Davies of Brixton (Lab)
My Lords, I too welcome the commission, chaired by my noble friend Lady Drake, and the timetable; a two-year period for something of this importance is right. It gives the possibility of legislation in the current Parliament, so perhaps I will be here to take part in it. Given the timetable and the wide terms of reference, can my noble friend give an assurance that the Government will not be making any short-term changes that might pre-empt the decisions of the commission? The triple lock is the most obvious example, but others include tax relief on member contributions.
Baroness Anderson of Stoke-on-Trent (Lab)
I thank my noble friend for his support. I reassure all noble Lords that this Government and our party have zero plans to change anything about the triple lock in this Parliament, which cannot be said of all political parties, unfortunately. With the Pensions Commission, we have brought together national experts to make sure that we have a plan in place going forward, and of course we will not pre-empt the decisions it is going to make. We will have ongoing opportunities to discuss these issues when the Pension Schemes Bill is before noble Lords later in this Session.
The Earl of Clancarty (CB)
My Lords, there are many self-employed workers in the creative industries, so is this something the new creative industries freelance champion will be looking at?
Baroness Anderson of Stoke-on-Trent (Lab)
The noble Earl raises a very interesting point and I am genuinely not sure of the answer. If he will forgive me, I will write to him. With regard to the self-employed, the DWP is currently working with Nest Insight and other partners to test potential solutions to encourage contributions from the self-employed into pensions, including nudges and utilising digital systems that many self-employed people already use. I think that will have an impact on the creative sector, but I will write to the noble Earl on the detail of his question.
Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)
My Lords, we will hear from the Lib Dem Bench then we will come to the noble Lord.
Lord Palmer of Childs Hill (LD)
My Lords, the Minister is quite right to talk about the success of automatic enrolment but, as she touched on, the pension contributions of the self-employed raise alarm. Could the Government think of ways of increasing this, perhaps using the tax return process as an opportunity to get self-employed people started in pension saving? The challenge is that, whereas employees tend to have fairly stable incomes, the self-employed can have quite lumpy incomes, so it is hard for them to commit to a regular level of pension saving. Could the Government look into ways of making pension saving easier for people running their own business and the self-employed, who may find that they can pay into a pension in sporadic chunks rather than on a regular basis?
Baroness Anderson of Stoke-on-Trent (Lab)
The noble Lord is absolutely right. One of the challenges we have with the self-employed and those who have multiple jobs of a lower income is around how we can encourage them, and auto-enrolment is not the right vehicle for them. There are two things the Government are doing. First, it is part of the remit of the forthcoming Pensions Commission to see what additional support can be put in place for the self-employed. Secondly, in the interim, the DWP is working with Nest Insight on how we can actively encourage new schemes that make it easier for the self-employed to participate in pensions. We are talking about cultural issues, using AI and other tools that the self-employed might already use in their workplaces to encourage them to save. We have undertaken a scheme with Nest, and we are looking for partners to roll it out to make sure it is credible on a national scale.
Lord Howell of Guildford (Con)
My Lords, in addition to more pension saving, the Chancellor talked the other night at the Mansion House about encouraging more retail investment in the stock markets and wider share ownership generally. This is an excellent cause and one that all parties should support. Will we see more measures from the Government to reinforce that particular development?
Baroness Anderson of Stoke-on-Trent (Lab)
My very good friend the Chancellor of the Exchequer will, as always, be considering these matters on an ongoing basis. Her Mansion House speech made clear our direction of travel. She will come forward with more activities in the future.
Lord Beamish (Lab)
My Lords, the Local Government Pension Scheme provides pensions for local authority workers, many of whom are on low pay. Could I have a commitment from my from noble friend that she will resist any attempt, as suggested by Reform-led councils, to abolish this scheme?
Baroness Anderson of Stoke-on-Trent (Lab)
My noble friend is very aware that I am a former trade union official who represented local government workers. I can give a complete commitment to the Local Government Pension Scheme. To be very clear, the terms of reference for the Pensions Commission do not touch on public sector pensions schemes. Anyone who thinks it is appropriate to target the pensions of some of our most important but poorer paid workers should be ashamed of themselves.
Baroness Bull (CB)
My Lords, the Minister will know that the latest OECD figures show that 52% of adults in England have numeracy levels below those expected of primary school leavers, which can leave them struggling to understand percentages and to convert between monthly and annual payments. Does she agree that, in these circumstances, such people may be deterred from engaging with an industry in which there are apparently complex calculations between investment and outcomes? What can be done, alongside improving numeracy, to encourage the pension industry to speak not just in plain English but in plain numbers?
Baroness Anderson of Stoke-on-Trent (Lab)
The noble Baroness makes a genuinely important point about how we make sure that everybody has access to appropriate funding in their retirement. Even the language of pensions does not help us. This is deferred income and deferred salaries. We need to make sure that we are working with providers, employers and the general public, so that they understand the importance of our pension schemes and why they are so vital to their future.
Casement Park: Spending Review
(3 days, 12 hours ago)
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Baroness Hoey
To ask His Majesty’s Government what criteria they used in deciding to contribute £50 million to redevelop Casement Park in Belfast under the Spending Review.
Baroness in Waiting/Government Whip (Baroness Anderson of Stoke-on-Trent) (Lab)
My Lords, before I answer the substantive Question, noble Lords will have seen on the news this morning the heartbreaking reports of a shooting in Fermanagh. My thoughts and prayers and those of the Government are with everyone touched by this heartbreak.
This Government want to support the Northern Ireland Executive with their plans for building world-class infrastructure in Northern Ireland across all sporting codes. That is why we are providing up to £50 million of capital funding to the Executive to support the redevelopment of Casement Park. It is now a matter for the Executive to decide what level of funding they will provide, and to work with other partners to fulfil the long-standing commitment to redevelop Casement Park.
Baroness Hoey (Non-Afl)
My Lords, I thank the noble Baroness for her remarks about Enniskillen and for her Answer. She must realise that back in 2011 football, rugby and Gaelic got similar amounts from the Northern Ireland Executive to develop their stadiums. Football and rugby did theirs, but Gaelic did not. Casement sat empty for years. That was not football’s fault or anyone else in government’s fault either.
Given the importance of equal treatment for communities in Northern Ireland, will the Government, having given this £50 million to the GAA, now recognise that football, which is a cross-community sport—Gaelic is not—deserves the same Exchequer funding? Does the noble Baroness realise that people who opposed it in Northern Ireland—British citizens—remember that Casement Park is named after an anti-British gunrunner who was tried for treason in the same month that 3,000 Ulstermen gave their lives for the UK at the Battle of the Somme? Is it any wonder that British citizens were opposed? If the Government are giving this £50 million, will they ensure that equal funding is given to the IFA, which deserves it just as much?
Baroness Anderson of Stoke-on-Trent (Lab)
The noble Baroness raises what is at the heart of this: in 2011 the last Government allocated £14.7 million of funding for the redevelopment of Ravenhill rugby stadium, £25.2 million for the redevelopment of Windsor Park, £61.5 million for Casement and £36 million for subregional stadia funds. All the projects have been delivered except Casement; the money was not spent. This is delivering on the promises that were made. We have been very clear that we have put forward £50 million. The current projected cost of the redevelopment is £170 million. It is now a matter for the Northern Ireland Executive to bring together partners to deliver the rest of the money.
Baroness Ritchie of Downpatrick (Lab)
My Lords, I convey my sympathies to the people of Maguiresbridge in Fermanagh and to the families of the victims this morning. On behalf of the GAA, and on my own behalf, I thank the Government for the £50 million contribution towards the construction of Casement Park. It is long awaited and I hope it will be built. What discussions have taken place, or what ongoing discussions are taking place, with the Northern Ireland Executive and the Communities Minister, who I understand is preparing a paper on Casement Park to take to the Executive that, I hope, will be productive and positive and result in the full allocation of funding to enable the building of Casement Park for provincial Gaelic games in the province of Ulster?
Baroness Anderson of Stoke-on-Trent (Lab)
I thank my noble friend. I am very aware of her personal support for the GAA and the sport. To reassure her, there is now an official-level working group between the NIO and the Northern Ireland Executive to try to deliver on Casement Park. The Northern Ireland Executive are responsible for the delivery of this project. We are working very closely with Minister Lyons to give him the support that he needs. It is now a matter of bringing together and delivering the project while it still can be delivered.
Baroness Foster of Aghadrumsee (Non-Afl)
My Lords, I thank the Minister for her acknowledgement of the absolutely horrific tragedy this morning in my neighbouring village of Maguiresbridge, which is in my former constituency of Fermanagh and South Tyrone. I send my deepest condolences to the family; I know this will have a huge impact right across the region.
Given that His Majesty’s Government are granting £50 million to the GAA for the redevelopment of Casement Park, will the Government seek to open a dialogue or discussion with the GAA in relation to its continued glorification of terrorism? In particular, the west Belfast festival is holding a children’s competition named after Joe Cahill, the self-declared leader of the IRA in Belfast. Where does that sit with the Government’s criteria for giving grants?
Baroness Anderson of Stoke-on-Trent (Lab)
The noble Baroness will be aware that the Arts Council has pulled funding from the festival. The Government believe in the power of sport to bring people together and our focus is on supporting activities that unite communities across Northern Ireland, not those that divide it. On the glorification of terrorism, prosecutions are obviously an operational matter for the PSNI, but let us be very clear: community events should be about uniting the community, and we need to make sure that is the case.
Yesterday I had the genuine privilege of spending some time with footballers from a youth leadership programme called Beyond the Ball, which is supported by the Rio Ferdinand Foundation. These footballers are from the Republic and from Northern Ireland, yet they came over here to play football together against young people from Camberwell. I think they were surprised at the somewhat challenging community tensions that can exist between Arsenal and Spurs, both of which they visited yesterday, so this can happen across the piece. While I am talking about football, I just want to say good luck to the Lionesses on Sunday.
Baroness Suttie (LD)
My Lords, from these Benches I add our thoughts and condolences to the families and friends of those killed and injured in the shootings this morning in Fermanagh. As the Minister said, sport can play a very positive role in building community cohesion and bringing communities together. In this regard, does the Minister agree with me that the Belfast Giants ice hockey team have given a positive example of bringing people together from all communities in Northern Ireland?
Baroness Anderson of Stoke-on-Trent (Lab)
My Lords, my officials told me to say, “Let’s go, Giants”, so for them, at the end of term, I say, “Let’s go, Giants”. The noble Baroness is absolutely right. My good friend the Secretary of State for Northern Ireland, when he met his hero Pat Jennings on Thursday, said:
“Sport has this extraordinary capacity to bring people together to give joy and to unite people and it can’t be something that divides us”.
Belfast Giants have gone out of their way to make sure that they are cross-community and work genuinely for sport, through sport. That is exactly what we should deliver, not just in Northern Ireland but across the country.
Lord Morrow (DUP)
My Lords, I commend the Minister on her remarks at the beginning. As a former representative of the Fermanagh and South Tyrone constituency in the Northern Ireland Assembly, I agree with her about the horrendous incident this morning. We extend our sympathy to all those involved and wish them a speedy recovery. It is a real tragedy.
I commend the noble Baroness, Lady Hoey, on her Question, as it presents an opportunity to bring some clarity as to why the GAA finds itself in this position. The fact that this development has not happened is not due to any negligence or reluctance on the part of the Executive or Assembly at Stormont but rather due to strong opposition from the nationalist community who reside in close proximity to the proposed development. Does the Minister agree with me that funding for all sports must be distributed in a fair and equitable manner?
Baroness Anderson of Stoke-on-Trent (Lab)
I absolutely do agree with the noble Lord. Sport is incredibly important to each and every one of us—in different ways with different sports—but we need to make sure that delivery of both funding and our commitment to sport is based on the sport and people’s engagement with it.
Lord Caine (Con)
My Lords, having attended a GAA match at Celtic Park in the Bogside in Londonderry last April, I am fully aware of the importance of Gaelic games for large numbers in the community in Northern Ireland. I also understand the strong emotions generated by Casement Park for others, not least given what happened there in March 1988. Further to the question by my noble friend Lady Foster of Aghadrumsee, on this side we share the dismay expressed about the naming of GAA stadiums, stands and even competitions after terrorists such as Joe Cahill, an IRA godfather of many decades who was convicted for murder and who undoubtedly oversaw the murder of many others. What assessment have the Government made of the impact that this has on community relations across Northern Ireland and on impressionable young children? Does the Minister agree that if Northern Ireland is to have a genuinely shared future in which all parts of the community have a stake, this kind of thing really has to stop?
Baroness Anderson of Stoke-on-Trent (Lab)
The noble Lord makes a genuinely important point about how sport should be used as a vehicle for bringing people together. There is a responsibility for the UK Government, the Northern Ireland Executive, and all local politicians and local community activists to make sure that is true.
Palestine Action Protests: Arrests
(3 days, 12 hours ago)
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Lord Hain
To ask His Majesty’s Government how many people have been arrested for participating peacefully in Palestine Action protests since its proscription.
The Minister of State, Home Office (Lord Hanson of Flint) (Lab)
My Lords, this Government uphold the democratic right for people to be free to express their views, but they should do so within the bounds of the law. The proscription of Palestine Action does not diminish the right to lawfully protest or support Palestinian rights. The use of police powers and the management of protests are operational matters for the police, who are operationally independent of government.
Lord Hain (Lab)
My Lords, more than 200 people have been arrested across the UK, protesting entirely peacefully for Palestinian rights, one a retired woman priest aged 83 and another for holding up a Private Eye cartoon. Surely this is an unjust, perverse but entirely predictable consequence of the proscription of Palestine Action, or are the police getting it wrong, as was argued in the High Court on Monday? How on earth do the police distinguish between those supporting Palestine Action, now an offence, and those objecting to its proscription without necessarily supporting it? How have we got to the point where peacefully holding up a placard about the carnage in Gaza is equated with terrorism by al-Qaeda on 9/11 or Islamic State on countless occasions? Should not the police be concentrating on stopping real terrorism and real crime, not targeting peaceful protesters?
Lord Hanson of Flint (Lab)
As I have said to the House, both at the time of the proscription order going through this House but also now, peaceful protest around the issue of Palestine is entirely legitimate if people wish to make that protest. The question is what is defined under the proscription order. The proscription order ensured that action was taken because Palestine Action has perpetrated attacks in which it has forced entry on to premises armed with weapons and smashed up property, and members of the organisation have used serious violence against responding individuals. That judgment has been given to us by the security services as part of the proscription order.
A High Court judgment is being considered; the judicial review took place on 21 July and the judgment will be handed down on 30 July, but in the meantime the police have to enforce the proscription order—but they also have to ensure that peaceful protest is allowed. The decisions are taken by the police, and they will be accountable for them in due course.
Lord Walney (CB)
My Lords, Palestine Action was proscribed after a five-year-long campaign of criminal sabotage and violence against working people. There is a deliberate and deceitful attempt to conflate the protests about what is happening in Gaza with support for a proscribed group. It is a curious conception of peaceful protest where people are clearly expressing support for a proscribed organisation.
Why has no one yet been charged, when many hundreds have been arrested? Do these decisions have to be approved by the Attorney-General? Is the Minister talking to the Metropolitan Police and asking for those files to come through to restore the deterrent effect, which is at risk of not working?
Lord Hanson of Flint (Lab)
The terms of the proscription order are clear and were passed by the House of Commons and this House. However, ultimately, the charging decisions and whether to seek permission from the Attorney-General remain the responsibility of the Crown Prosecution Service. It is not for me to direct it or to comment on that—but the terms of the proscription order are clear, and it does not include legitimate protest in a free, fair and peaceful way around the issue of Palestine.
Lord Harper (Con)
My Lords, when we debated this issue in the House, we made it very clear that there was a distinction, as the noble Lord, Lord Walney, has just said, between campaigning in favour of the rights of Palestinians, which is absolutely allowed, whatever your views about it, and supporting proscribed organisations. The noble Lord, Lord Hain, in his Question on the Order Paper made it clear that he was objecting to people being arrested for supporting Palestine Action, but in the question that he has just set out he suggested that people were being arrested for expressing support for the Palestinian people. Those are two very different things. The Minister was clear. Can I say that those people who support proscribed terrorist organisations should meet the full force of the law, and can he make sure that they do so?
Lord Hanson of Flint (Lab)
The purpose of Parliament, both the House of Commons and this House, is to pass legislation. We have done that with overwhelming majorities in both Houses of Parliament in favour of the proscription order—and the proscription order is clear. However, I am also clear that we must not conflate terrorist activity with legitimate pro-Palestinian support. People are free to support Palestinian rights and sovereignty, and there are means to do it without being a member of or a supporter of Palestine Action. I cannot be clearer from this Dispatch Box.
Baroness Doocey (LD)
My Lords, by handing overstretched and under-pressure police officers more power to decide whether a protest is in fact an arrestable offence in the heat of the moment, we risk creating an environment where almost every protest could be regarded as criminalised. Does the Minister accept that the recent ban, which has already led to many arrests of peaceful and even silent demonstrators, demonstrates how powers that are vague and too broad can be misapplied to unfairly target non-violent dissent?
Lord Hanson of Flint (Lab)
I do not think I can be any clearer to the House. The proscription order was passed by an overwhelming majority in the House of Commons and in this House, and it is very clear. The police have a duty to enforce that proscription order. For the police, what that means is that they will potentially make arrests. It is then for the Crown Prosecution Service to consider whether charges are made, and it is then for decisions to be taken as to what happens to those charges. I am not responsible for police interaction on that matter because the police ultimately have to be independent of Ministers and government in making those decisions.
Baroness Jones of Moulsecoomb (GP)
My Lords, it is not, I am afraid, appropriate for the Minister to stand here and say what the police are doing is none of his business. Putting aside for a moment the proscription of Palestine Action—and you know how I feel about that—the police clearly do not understand the powers that have been given to them. They are clearly arresting people who are protesting peacefully. The Minister has a responsibility to make sure the police know what they are doing.
Lord Hanson of Flint (Lab)
Absolutely, we do. I assure the noble Baroness that the Government take the way in which this is interpreted and executed by the police very seriously. But what I am saying is that it is not the responsibility of this Government to make judgments on the ground, which police officers are trained and supported to do, about what action to take in relation to the legislation that we have passed. It is the job of the police to make those independent judgments—it is not for me as the Minister to say that they should arrest somebody or not arrest somebody. That is a judgment for the police under the legislative framework that this House and the House of Commons set.
Lord Davies of Gower (Con)
The recent review conducted by the noble Lord, Lord Mann, and Dame Penny Mordaunt reported an onslaught of antisemitism since the 7 October Hamas-led attack on Israel—a conclusion reached after a review of evidence from a range of institutions, including the NHS and the police. The noble Lord, Lord Mann, told the “Today” programme recently that Jewish people were ostracised in the work- place simply because they are Jewish. Does the Minister recognise the conclusions reached in the report, and how many of its 10 recommendations will the Government support so that we can begin to end the horrific scourge of antisemitism in our country?
Lord Hanson of Flint (Lab)
This Government—and I personally—have no time for antisemitism. We will take action against it; we will look at the review and the reports that have been made and respond to the recommendations in due course. I hope the noble Lord will be aware that antisemitism is a curse on our society, one that we should tackle very strongly, and this Government will do so. I hope that with his support we will continue to look at how we can build bridges to ensure that antisemitism is no longer a feature of our society.
Baroness Chakrabarti (Lab)
My Lords, I am quite convinced from listening to these exchanges that my noble friend the Minister well understands the relevant law here, but I am not so convinced that the police do. Does he realise that if they continue to fail to make distinctions between support for a proscribed organisation, opposing the proscription, protesting events in the Middle East or indeed holding up Private Eye cartoons, their behaviour will only call further into question the wisdom, proportionality and legality of the original proscription decision?
Lord Hanson of Flint (Lab)
I am grateful to my noble friend. I can only repeat to this House that I believe the proscription order is clear in relation to the offences that potentially could be committed under that order. It is for the police to make judgment. I am not even going to second-guess the arrests that have been made, because I do not know the details of why they have been made and it is not appropriate for Ministers to delve into that matter. We set the framework, then the police investigate, execute and bring to the CPS. That is the way the rule of law works in this country.
Arrangement of Business
Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)
My Lords, as set out in Today’s Lists, at a convenient point after 7.30 pm we are taking ping-pong on the Armed Forces Commissioner Bill. Due to an oversight, while appearing on Today’s Lists, it does not appear on the green sheets, for which I apologise to the House. Once we have finished ping-pong, we will move on to Questions on an Oral Statement on Financial Services and then return to complete Report of the Employment Rights Bill. I thought it would be good to come to the Dispatch Box to inform the House and apologise.
House of Lords Commission
The Senior Deputy Speaker
The Senior Deputy Speaker (Lord Gardiner of Kimble)
My Lords, I thank noble Lords who are coming off committees for their work. I also place on record my considerable thanks to the noble Lord, Lord Newby, whose term as Leader of the Liberal Democrats ends on Thursday. I am most grateful for his significant contribution to committee work, and beyond. I beg to move.
Asylum Hotels: Migrant Criminal Activity
(3 days, 12 hours ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
Lord Davies of Gower (Con)
My Lords, the situation in Epping is already being woefully managed. The police have admitted escorting pro-migrant demonstrators to an asylum hotel, having previously denied having done so, and we know that there have been concerning incidents of violent behaviour. Further and larger protests are expected this weekend, and they have already spread from Epping to London following claims that migrants are being put up in a hotel in Canary Wharf. We on these Benches are clear that violence and disorder on our streets are always unacceptable, so what urgent steps are the Government taking, in conjunction with the police, to make sure that we do not see a return to the violence of last summer? How will the Minister and his colleagues ensure that misinformation, which could cause and inflame unrest, does not prevail?
The Minister of State, Home Office (Lord Hanson of Flint) (Lab)
I am grateful to the noble Lord for his question. I hope that I can help him. Essex Police have issued a statement:
“There are claims on social media that Essex Police officers ‘bussed’ protesters to the protest outside the Bell Hotel on Thursday July 17. This is categorically wrong”.
Now, I can only accept what Essex Police have said: I am not on the ground there. That is Essex Police’s statement. The noble Lord will also know, because it is in the Statement, that Essex Police arrested an individual who was subsequently charged, whose trial is due to start on 26 August and who has been remanded in custody until that time. I am therefore not able to comment on that issue any more.
Essex Police have also arrested individuals in connection with the protest. Going back to the debate we have just had, peaceful protest is legitimate, but if that peaceful protest crosses over into alleged violence or other activity, the police have a right to act, and they have made arrests in connection with that incident as well. So I say to colleagues across the House and across the nation that peaceful protest is acceptable, violent protest is not, and the police walk a very thin line to ensure that they allow peaceful protest while ensuring that acts of violence or intimidation are not acceptable and are not undertaken. I look forward to the noble Lord’s support when this House rises to ensure that we maintain that message through the summer.
Lord German (LD)
My Lords, I draw attention to my interests as set out in the register; I am supported by RAMP. I also thank the police for their work in Epping in Essex. I listened to the chief constable make his statement just an hour ago. In particular, I welcome the fact that they have now arrested 10 people and referred to those “thugs and vandals”—not my words, but the words of the chief constable—who damaged a number of police vehicles, threw projectiles at officers and injured eight police officers.
We need to put these things in perspective. There is obviously an issue related to asylum hotels. I listened to the Minister in the House of Commons delivering the same Statement and to the questions asked on it. In his response, the Minister said that they will aim to not to have anybody in a hotel by the end of this Parliament. Frankly, that is too long and too late. What can the Minister tell us about the speeding up of the process for getting people out of hotels, which are dangerous for everyone and certainly do not help asylum seekers in their passage through this country?
Lord Hanson of Flint (Lab)
The key to that objective, which I share, is speeding up the asylum claims process. Therefore, the Government have invested in roughly 1,000 further individuals who are helping to make that processing quicker. It is a long task, because there is a large number of hotels. The number in use is smaller than on 5 July last year, but there is still a large number of hotels. The way to deal with that is to speed up asylum claims and allow asylum for those who have been approved; for those who do not have a legitimate asylum claim, we must ensure their speedy removal from the United Kingdom accordingly. That is what the Government is trying to do.
The noble Lord was quite right to thank the police for their sterling work in protecting society, and to say that we must ensure that those who commit violent acts against the police—or elsewhere—and are arrested should face the process of law, where a judgment will be taken on them. The events in Southport last year show that that happened to a large number of people who went from peaceful to non-peaceful protest. The message we need to send is that peaceful protest is legitimate, but non-peaceful protest is not.
Lord Dubs (Lab)
My Lords, the evidence is that, when there were troubles last year, there was a great deal of misinformation being spread deliberately to encourage disorder. What action can the Government take to ensure that only proper information is disseminated and this other activity of telling lies to encourage disorder is squashed?
Lord Hanson of Flint (Lab)
When fake posts are drawn to the Government’s attention, or when they examine those matters, they ask for the posts to be taken down. It is important that we maintain the integrity of the situation that is happening. Part of the challenge we face is to ensure that people are not led by fake news, or not encouraged by others to take action. Members will know that individuals who encouraged people to take illegal action last year found themselves before the court. People need to be very careful about actions taken at any time, because there is potential for further arrests, charges and consideration of matters before the court. I urge all to look calmly at the situation and reflect on how best to express a view to their Member of Parliament or the public in a peaceful, orderly way.
Baroness Laing of Elderslie (Con)
My Lords, I declare an interest: I live very close to the town of Epping, having served as the Member of Parliament for the Epping Forest constituency for 27 years until last summer. It has long been recognised that the Bell Hotel in Epping is not a good place for asylum seekers to be housed. I am sure that the Minister will recall that the then Conservative Home Secretary closed that hotel in April 2024 and the asylum seekers were dispersed to other places. The Minister’s colleagues then reopened the hotel without any consultation with the district council, which is somewhat unfortunate.
However, I join with the Minister in thanking Essex Police for the way they are dealing with this very difficult situation. It should be noted, among the misinformation that is out there, that both of the men who have been accused of serious crimes are now in custody awaiting trial—our justice system is working. Does the Minister agree with me that it is the duty of all elected representatives, regardless of which party they represent, to do their best to encourage community cohesion and to calm down a potentially riotous situation? The Minister said about as much in the past few minutes. The considerable amount of misinformation being spread by a particular political party is unfortunate and working against community cohesion. Will the Minister join with me in calling everyone involved in the situation in the Epping Forest area, and across Essex, to stop inciting violence, to call for calm and to think of the vulnerable people whom we should all be protecting?
Lord Hanson of Flint (Lab)
I am grateful to the noble Baroness, who possibly knows that constituency better than anyone else in the House today; she brings her wise counsel with her comments this afternoon. It is important that everyone who holds office in society, elected or otherwise, ensures that they consider the situation there in a favourable way to ensure that the police have their support and that the criminal justice system is allowed to take its course. Community cohesion and community engagement is the most important issue before the House today.
Baroness Fox of Buckley (Non-Afl)
My Lords, first, does the Minister recognise the legitimate fury and frustration of local people, whether in Epping or Diss, because they feel their voices are not being heard in relation to their concerns about the hotels? They genuinely fear for their children because of crimes committed by people staying in the hotels, even if it is a minority of those staying in them. Secondly, does the Minister acknowledge that some of the misinformation includes calling those local people “far-right thugs”, which, to a certain extent, is the most insulting thing you can call people who are genuinely protesting? Will the Minister distance himself from that misinformation as well as the other misinformation that he has mentioned?
Lord Hanson of Flint (Lab)
Any potential crime committed anywhere—be it in a hotel or a town centre —is a matter for the police to investigate. It is then for the police to charge people and for a jury of peers to make a determination in due course. In this case, an individual has been arrested and charged and will be before the court in due course, so I cannot comment on the specific circumstances.
If people have legitimate concerns about the hotels, asylum, migrants or people crossing the channel, they have a right to express that view in a peaceful, orderly way. The line is drawn where that protest leads to other potential crimes. In this case, the police have acted to arrest and potentially to charge individuals for crimes, which, equally, will go before the courts and be determined upon in due course. It is the job of us all to appeal for calm in those circumstances and to ensure that we find political solutions to some of the challenges that we have—but not, in any way, shape or form to encourage inflammatory action against the police, the community or people who are not committing crimes and who happen to reside in a particular place at a particular time.
Independent Water Commission
(3 days, 12 hours ago)
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Lord Blencathra (Con)
My Lords, first, I congratulate Sir Jon Cunliffe and his team on this thoroughly detailed review of the water industry. There are many of his 88 recommendations we support, including the replacement of Ofwat.
In the other place and on the airwaves last weekend, the Secretary of State for Defra tried to demonise the last Government for lack of progress on water improvement. Will the noble Baroness the Minister acknowledge that £93 billion of the £104 billion the Government boast they have raised was raised by the last Government and that the target to cut 50% of sewage discharges is less than the target of cutting phosphates by 80% set by my noble friend Lady Coffey in the last Government? The Government are able to set meaningful targets now only because the last Conservative Government increased monitoring of storm overflows from 7% under Labour to 100% in 2023.
We welcome the new regulator. Does the Minister agree that it should be independent of the water industry but completely answerable to the Secretary of State and, through that, to Parliament, so we get proper parliamentary scrutiny for the first time?
I note there is a recommendation for metering for all and for a social tariff system. While metering and paying for usage is a legitimate aim which would benefit low water users, a social tariff system is just a euphemism or another term for a tax based on income or wealth. Does she accept that turning water charges into a tax to make some people pay more, such as retired pensioners, even if they use little water, is regressive and unacceptable?
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I thank the Government for making time for the repeat of this Statement. I also thank my noble friend Lady Grender for having another critical engagement at this time, thus allowing me to speak on the subject which had become routine for me over the preceding years. The noble Baroness the Minister and I have made many contributions on this subject in the years running up to the general election, both of us vehement about the lack of control Ofwat was exercising.
Sir Jon Cunliffe’s report is lengthy, robust and to be welcomed. We look forward to knowing exactly how many of his recommendations the Government will take forward.
Since 2022, Liberal Democrats have called for the abolition of Ofwat. It is an organisation that is completely out of its depth. It had no real way of dealing with water companies, which seemed to have forgotten that their real remit was to provide a plentiful supply of clean water and dispose of sewage in an efficient and environmentally friendly way. Although some water companies were fined by Ofwat, their sanctions bore no relationship to the number of bonuses and dividends that the executives and shareholders received for doing an abysmal job.
Like others, I welcomed the Government’s ban on bonuses for water company executives who oversaw sewage discharges. However, at least one chief executive and his colleagues got round this by receiving a 100% increase in their pay by way of compensation for the absence of a bonus. It is ordinary water users and taxpayers who have to foot the bill for this, just as they have to contribute to the bill for the increases which will be needed to repair the creaking and dilapidated sewerage system and to build new reservoirs.
The Government have stated that they will cut water companies’ sewage pollution by half by the end of the decade. This is to be welcomed, but how exactly will this be achieved? Bringing the oversight of the water industry under a single regulator which has the means to ensure high standards is essential, but I have some concerns. Previously, we have seen a rotation of officers from the water companies into Ofwat and from Ofwat into the water companies—a merry-go-round of incompetence. Is the Minister able to give the House reassurance that no existing or previous officer of Ofwat or any of the failing water companies will have a role in the new regulator once established? It is essential that the incompetent are not rewarded with having a role in the new regulator. A fresh start has to be just that, and not tainted with previous failure.
We look forward to the interim strategy policy statement giving directions to Ofwat and the Environment Agency on how to move forwards towards the transition plan. The Environment Agency is not without involvement in the sewage discharge debacle. While the EA has been underfunded over recent years, and with ever more responsibilities thrust upon it, a radical rethink of the way it operates has to be part of the solution going forward.
Since Liberal Democrats have been raising the issue of sewage spills in this Chamber and the other place, the EA has found that last year alone, there was a 60% increase in serious pollution incidents. We are at the start of the school summer holidays. Children and their families will be going to beaches and rivers to enjoy relaxation and at least a paddle, as well as swimming to cool down in the heat—which we hope will return.
So many of these children will be in water that is polluted with raw sewage spills, discoloured and stinking. Certainly, I would not want my grandchildren to swim in such waters. Families should be able to take their children for a day out at the beach without having to worry about whether the water is contaminated. The sooner the Government can bring the water companies to book, the better. The lackadaisical approach to sewage discharges has to stop, and quickly.
Last year, water companies breached their permits more than 3,100 times, at the same time as paying out a total of £9.3 million in executive bonuses. No single stretch of river in England or Northern Ireland is in good overall health; no English river is in good chemical health; and just 14% of English rivers are in good ecological health. This is a far cry from my childhood, when the babbling brook ran with clear, transparent water and I could see the minnows swimming along, trying to escape my small fishing net. I am confident that the Minister is as concerned about these issues as the rest of us.
What is needed is: more access for communities and citizens to hold water companies to account, including representation on water company boards; improvements in how pollution is measured and strict targets set, using volume flow meters and penalties for missing targets; an urgent implementation of a social tariff on water bills to help eliminate water poverty; and legally binding targets on the quantity and quality of bathing waters and sensitive nature sites, with independent and transparent testing of water quality. Local authorities, although already overstretched, should have strengthened powers to monitor the health of our rivers, lakes and coastlines in order to restore our natural environment and help tackle climate change.
I look forward to the Minister’s response on this vital issue, which affects every single water user in the country.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)
I thank noble Lords for their broad support for the recommendations that have come out of the Cunliffe report. This is a very important step forward in cleaning up our waterways.
The Statement talks about the five recommendations that we are taking forward immediately, including: the new statutory water ombudsman, ending operator self-monitoring, and the new single water regulator— I think there is consensus that Ofwat has not done its job effectively. The noble Baroness, Lady Bakewell, makes an important point when she says that we should not reward incompetence, and I am sure that will be fed through. There will also be greater local involvement. The noble Baroness talked about communities; we want them to be more involved, and customers to be right at the heart of how we move forward with these changes. That is one of the reasons for bringing forward the regional element: to enable communities and consumers to be more central in water planning and how we manage pollution going forward. There will also be an improved strategic direction, because water strategy has failed abysmally over the last few years.
Of course, this is not the limit of our ambition. We will respond in the autumn in full to the recommendations in the Cunliffe report. We will publish a White Paper, which will be open for consultation, and we intend to follow that up with a water reform Bill. So, many of the questions that the noble Lords asked, and I assume will continue to be asked, will be able to be addressed once we see that White Paper, and that consultation will be available for people to take part in.
The noble Lord, Lord Blencathra, asked a few questions, which I will address. First, he talked about funding. I stress that it is actually this Government who secured the £104 billion of investment, which is so needed because of the lack of investment in the water industry over many years. That is going to be critical to improving leakage, for example, and providing better service for customers. He asked whether the regulator would be independent of the water industry but also answerable to the Secretary of State and to Parliament. We have said in the White Paper that we are going to have this new, single water regulator. Those are the kinds of questions that will be debated as we move through that process in order to inform our further legislation when it comes forward.
Social tariffs were mentioned by both noble Lords. As I said, we want to put customers at the heart of the new model that we are developing. The recommendations made by the Independent Water Commission talk about national social tariffs and the introduction of compulsory smart meters. These will be considered alongside all the other recommendations as we move forward. As I said, further information will come out this autumn, when we have developed the White Paper.
The noble Lord, Lord Blencathra, also talked about the monitoring of overflows and mentioned that in 2010, 7% were monitored, and by 2023, at the end of the previous Government, it was 100%. In answer to that, a lot of this monitoring came in because of public pressure and because of the absolute horror at the amount of pollution that was going into our waterways. People had not been aware of that before. While we are very pleased that the previous Government increased monitoring, there is responsibility to be taken for the amount of pollution that had gone into our waterways and the complete incompetence of the regulators at the time, which is what we are now trying to address.
The noble Baroness, Lady Bakewell, asked about the target to reduce pollution—50% by 2030—and how that was going to be delivered. We have combined this with the existing commitment in the environmental improvement plan to reduce phosphorus from treated wastewater by 50% by 2028. Together, those two targets form the pledge that we are making on this commitment. Ofwat and water companies previously agreed a commitment for water companies on the PR24 agreement for storm overflow spills to be reduced by 45%, based on a 2021 baseline. To be clear, the data between 2021 and 2024 does not compare, because in 2021, only 88% of storm overflows were monitored. Although it looks less, the amount has increased, as has our knowledge. Our target for storm overflows is based on the 50% reduction in spills from storm overflows by the end of 2029, compared with 2024 levels. We can do that because we now have 100% of storm overflows monitored.
More broadly on communities, we are engaging for the first time on entire river catchment systems. As part of that, we want to bring local people, local authorities —which have an important voice—businesses, and farming communities, of course, into the work that we are doing to improve pollution systems in their local area. As I said, that will be done on a regional basis and then into the catchment model system. That will be more effective, I hope.
Lord Cromwell (CB)
My Lords, the Minister and I have a long and mainly happy history of trying to reform the water industry, including the replacement of Ofwat. I read with interest the 88 recommendations in this very timely and useful report. There is a lot to discuss, much of it welcome, but for now I will focus on two questions.
First, the report underlines the need to recognise the very long-term nature of water infrastructure investment. It says that the strategic policy statements have been too short term and that water company plans, typically of five years, encourage short-term thinking. I have often asked successive Ministers to make it clear that there is no quick fix here. This will be very disruptive to consumers, cost billions of pounds and, crucially, will take at least 25 years to implement. That is five parliamentary terms. The Government need to be honest with the public on this, so I ask the Minister to underline this and to make clear the likely timeline for this refurbishment of the water and sewerage infra- structure.
Secondly, the report summary on page 29 calls for more
“senior engineering and financial expertise”
on its board. I agree with that, but a key problem at Ofwat was that it lacked the financial engineering skills to grasp what private equity investors were up to, which led to so many of the debt problems and other issues in the finances of the water companies that we see today. Will the Minister be pressing for expertise in financial engineering in this area to be included in any new board?
Baroness Hayman of Ullock (Lab)
Any new board must have the right expertise if it is to deliver what we want for the industry. The noble Lord makes a very important point that whatever that expertise is, we must ensure that any future regulatory systems are set up to do the job they are supposed to do and that they have the knowledge, ability and skills to do that effectively. Otherwise, we will end up with a regulator that is, again, ineffective, which is not how we want to move forward.
The noble Lord makes a good point—this will take a long time. I hope the general public recognise that this is a long-term rebuilding programme. We are rebuilding a lot of a very old system, and we must get it right. This is also why will be bringing out the White Paper in the autumn, as quickly as we can, following the publication by the committee. From that, we will do the consultation, which must inform the public of what we are looking to achieve and what the timescales will be.
We want to bring in new legislation as swiftly as practically possible following that White Paper. That will also be part of the discussion on how we bring people with us, because people want to see the water industry cleaned up.
Lord in Waiting/Government Whip (Lord Katz) (Lab)
My Lords, we have 16 minutes, and I am sure that we can all get in. Let us hear from these Benches and then the Opposition Benches.
Lord Lennie (Lab)
My Lords, one of the things we discussed in the Climate Change Committee was the performance of the regulator. An issue raised by the noble Baroness, Lady Bakewell, in her instructive comments, was the revolving door between the water companies and the regulator, in both directions. What action will the Government take to make sure that the door is slammed shut?
Baroness Hayman of Ullock (Lab)
As I have already said, we must get the regulator right, we must get the boards right, and we must move forward with this. There is no point in making the same mistakes that have been made over a number of years, and in not learning from what went wrong before. Getting the regulator and the boards right will be critical to achieving that.
Baroness McIntosh of Pickering (Con)
My Lords, I congratulate Sir Jon Cunliffe and the Independent Water Commission on their excellent work, and I declare my interest as co-chairman of the All-Party Parliamentary Water Group. What legislative timetable is envisaged? In the Statement, the Secretary of State says that he will bring forward a new water reform Bill early this Parliament. We are more than halfway through this parliamentary Session, so it would be interesting to hear exactly what timetable the Government envisage. Can the Minister also confirm that National Highways will be made responsible for the water run-off and the pollution it contributes to?
Baroness Hayman of Ullock (Lab)
On the timetabling, clearly, it is not something we can bring in this Session. We do not yet know when the end of the Session will be—we have not been informed about that—but when we have reached the end we will look to see when it will be practically possible to bring in such a Bill. All I can say to the noble Baroness is that this is a government priority.
The run-off from roads and agricultural run-off is being taken very seriously, and our response and how we will manage it as part of our overall approach to water pollution is being worked on.
Baroness Jones of Moulsecoomb (GP)
My Lords, the Minister will know that Sir Jon Cunliffe was not given the option to look at renationalisation. In the other place, the Secretary of State for Defra has twice replied to Green MPs Adrian Ramsay and Ellie Chowns, saying that his department looked at the cost of renationalisation and it came out at £100 billion. I have two sheets of paper here with lots of ideas about how we could renationalise without that sort of figure being necessary. The most exciting one suggests that, if we stack the liabilities against the assets of these companies, they would be worthless. So, perhaps the Minister could tell the Secretary of State to get new accountants or consult the professor of accounting we have here in your Lordships’ House. I would be pleased to give him these two sheets of paper with all these different ideas.
Baroness Hayman of Ullock (Lab)
The noble Baroness is correct: we have ruled out nationalisation. But if she would like to share the paperwork, I would be more than happy to look at it.
Lord Sikka (Lab)
My Lords, Ministers claim that public ownership of water would somehow cost £100 billion, which is a totally unsound claim. Let me explain. The £100 billion figure is generated by Ofwat, which calls it “recognised capital value”. It is calculated by taking the value of the company at the time of privatisation, adding the annual investment and multiplying it by the annual rate of inflation. It adds that 35 times—that is, over 35 years—and comes up with the figure of £100 billion, which does not represent anything. On the same basis, a £10,000 Reliant Robin bought by Del Boy in 1990 would now have a value of over £50,000. There is no way that Del Boy would be able to sell it for £50,000, because that figure has absolutely nothing to do with value. So, can the Minister explain why the Government consider £100 billion to be a credible figure for the cost of public ownership?
Baroness Hayman of Ullock (Lab)
I would just say to my noble friend that we have discussed this on a number of occasions, including with officials in the department. I am sure that we will continue to discuss it.
Lord Kerr of Kinlochard (CB)
My Lords, will the Minister have the White Paper consider, and perhaps consider for the Bill, the idea of setting minimum annual investment requirements? I do not know much about Ofwat, but I know a bit about Ofgem. During the time when I was on a power company board, our annual bids to spend our money on improving our network were cut down by an average of about £1 billion a year. So long as the regulators feel that they are under pressure to keep costs to the consumer down, that is what will happen. It seems to me that Parliament and the Government need to take responsibility for setting a requirement on replacing the crumbling infrastructure. That should be at least discussed in the White Paper, and I hope it will find a place in the Bill.
Baroness Hayman of Ullock (Lab)
The noble Lord makes an extremely good point. Part of the reason why we have got into this mess is the focus on keeping bills low. People do not want to pay high bills, but if you are constantly putting pressure on that and not investing in the infrastructure, that is when you end up with a lot of these problems. That is why in PR24 we gave the most investment ever—to try to turn around some of the problems. The noble Lord makes a good point about what we need to look at going forward, in order to ensure that we do not have these sorts of problems in the future. He is absolutely right that this needs to be part of what we look at following the White Paper. I would be very happy if he has any ideas to share with me following his experience with Ofgem. That would be very interesting.
Lord Kirkhope of Harrogate (Con)
My Lords, I declare an interest as a former water company director—one involved in clean water only, not wastewater. In the speech made on Monday by the Secretary of State, he made it clear as a priority that the customer would come first in all these considerations. The customer matters more than everybody else in terms of the environmental effects and, in particular, in the pricing of this utility. There is a price review going on. Can the Minister confirm that the role of the ombudsman, certainly in the pricing review, will give priority to pricing because of the incredible increases recently in water bills? In particular, will standing charges be looked at thoroughly because, in many cases of low consumption, the standing charge has become an enormous impediment in an awful lot of people’s water bills?
Baroness Hayman of Ullock (Lab)
My right honourable friend said in his speech down the other end that the new regulator
“will stand firmly on the side of customers, investors and the environment and prevent the abuses of the past”.
That basically demonstrates that we need to look at the big picture about what went wrong in the past and what we need to do to rectify it in the future. I am sure that we can look at the noble Lord’s suggestions as we move forward to ensure that we have regulation and pricing that are fit for purpose.
Earl Russell (LD)
I declare my interest as a board member and director of the Water Retail Company. I thank the Minister for the Statement, and we welcome the report. I am sure the Minister will join me in thanking all the members of the public, charities and NGOs who have done so much work to ensure that we are aware of the level of the sewage crisis and the pollution in our water system. I noticed that there is no direct recommendation in the report to support citizen science. What action will the Government take to support these citizens? What is happening with the water restoration fund?
Baroness Hayman of Ullock (Lab)
The noble Earl makes an important point about citizen science and input from local communities. He is right that, in many ways, we are standing here today discussing the outcome of the commission because of the recognition by government of the problem that was originally raised by organisations such as Surfers Against Sewage and anglers’ associations, and by individuals such as Feargal Sharkey. It is important to recognise that this was brought to government’s notice because of the campaigns and the work by volunteers and charitable organisations. That is why it is critical that we continue those discussions with those organisations as we develop the White Paper and the legislation, because if you have experience of dealing with problems on the ground, you can bring valuable suggestions to the development of legislation.
Citizen science will be an important part of this. An example is Lake Windermere: there is a local group of people working there that we are trying to work with and support to look at how we specifically deal with the challenges there.
Lord Whitty (Lab)
My Lords, like others, I would have preferred renationalisation, but a strengthened and unified regulator was my second choice so I welcome much of this report. However, will the next stage, the White Paper and the later legislation, envisage a situation where there is a system closer to franchising than to the total freedom of the water companies to carry on doing a disastrous job, as they have done since privatisation?
My other point is that, in relation to consumers, there seems to be a bit of confusion between the role of the Consumer Council for Water, which represents consumers, and a new ombudsman, which is a quasi-judicial body resolving problems raised by consumers. Possibly the Consumer Council for Water should be run by Citizens Advice, but there should not be confusion between the two jobs.
Baroness Hayman of Ullock (Lab)
I take that point, which is a good point well made about that confusion. I am sure we will take it back to the department. The report includes proposals about ownership, which will be part of any consultation from a White Paper. That is another important point that we need to consider.
Lord Trefgarne (Con)
My Lords, some very high salaries have been reported payable to senior water officials. Can the Minister say whether those salaries require ministerial approval?
Baroness Hayman of Ullock (Lab)
Water companies are private companies so, on that basis, no, they would not require ministerial approval.
Baroness Parminter (LD)
My Lords, there are 83 recommendations from the report on which the Government have yet to decide what view they will take. Some of them are quite small wins—for example, the recommendations by Sir Jon on rainwater harvesting to address the shortages in housing. That could be sorted out, before a White Paper, in the Planning and Infra- structure Bill. Will the Government take all reasonable opportunities, including the Planning and Infrastructure Bill, to address some of the sensible recommendations outlined in the report?
Baroness Hayman of Ullock (Lab)
That is a sensible suggestion by the noble Baroness. I am happy to discuss those considerations with the Water Minister and the Secretary of State to see if we cannot move things forward as quickly as we can.
Baroness Altmann (Non-Afl)
Having worked so closely with the Minister, I know how dedicated she is to getting this right. I congratulate her and the Government on their decision to act swiftly on Sir Jon Cunliffe’s excellent report. I relay congratulations from my friend, the noble Duke, the Duke of Wellington, who was a leading voice in this House on this issue.
What safeguards will be in place to avoid the kind of hideous bureaucracy that we have seen bog down the industry and the monitoring of these water pollution incidents? Will the new regulator—a long called-for and excellent move—have the right remit from the start to avoid the kind of financial engineering that the noble Lord, Lord Cromwell, referred to? Will it have proper data so that the public can have confidence that they know what is going on, including tying pay for water companies to performance and perhaps having delayed compensation schemes so that, for example, we can get pension funds investing profitably in them for the long term rather than the short-term profitability that we have so often seen?
Baroness Hayman of Ullock (Lab)
Investment will be critical. That is a very important point. The answer to most of the noble Baroness’s questions will lie in the consultation and the response to the White Paper on how we move forward. In particular, it is important that we have the opportunity as early as possible to start talking about it and considering how to prioritise what needs to be in place in order to start delivering on our concerns and the outcomes as soon as we can.
It is worth pointing out that the existing regulators will stay in place until the new system is in place. The Government will clarify our expectations to the existing regulation system ahead of that, because we do not want the regulators just to continue as they have been. We will publish a strategic policy statement, which will have ministerial direction attached to it, at some point this year.
Employment Rights Bill
Wednesday 23rd July 2025
(3 days, 12 hours ago)
Lords ChamberEmployment Rights Bill 2024-26 View all Employment Rights Bill 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 113-IV(b) Manuscript Amendment for Report (Supplementary to the Fourth Marshalled List) - (23 Jul 2025)
18:21 - Division on Amendment 147 - Ayes: 290 / Noes: 143 - Amendment 147 agreed.
18:34 - Division on Amendment 148 - Ayes: 271 / Noes: 138 - Amendment 148 agreed.
18:46 - - Ayes: 198 / Noes: 198 - Contents 198; Not-Contents 198.
19:30 - Division on Amendment 152A - Ayes: 171 / Noes: 189 - Amendment 152A disagreed.
Lord Burns
Member's explanatory statement
This amendment would retain the 2016 cross-party compromise (agreed by the House without a division) whereby new members of a union contribute to the political fund only if they have actively chosen to do so. That compromise was based on the conclusions of the Trade Union Political Funds and Political Party Funding Committee.
Lord Burns (CB)
My Lords, my amendment proposes removing Clause 59 from the Bill. This would maintain the current arrangements whereby members joining the union since the passage of the Trade Union Act 2016 contribute to its political fund only if they give their active consent to do so. These existing arrangements stem from the compromise reached by the Trade Union Political Funds and Political Party Funding Committee in 2016. The compromise was that unions would not need to obtain active consent from existing members to continue paying into the political fund but would be able to collect the political levy from only those new members who had given their consent and made an informed choice to do so. Additionally, all members were to be reminded annually that they could change their decision.
My involvement in the issue was not because of a long-standing historical interest in political funds, I emphasise; simply, I was asked to chair that committee. In the process, I gained insights into the history of trade union political funds and the arguments for and against opt-in and opt-out clauses when individuals need to exercise a choice.
The 2016 compromise prevented the fear of a sudden and potentially significant reduction in the income of trade union political funds, which could have severely damaged the Labour Party’s finances. While the then Opposition welcomed the compromise, many Conservative Members in this House and the House of Commons were disappointed that the requirement for active consent was not extended to existing members.
Consequently, I was taken aback when I learned that the new Government wanted to abandon the compromise and revert to the pre-2016 position. This Bill proposes returning to a position where all new members make automatic contributions to political funds unless they deliberately choose not to, with reminders only once every 10 years.
During the recent debates on this Bill in Committee, several arguments were put forward from the Government Benches to justify the proposed change. I find none of them convincing. The first argument was that this was merely returning to an arrangement that had lasted between 1945 and 2016. This is a weak argument. Many things have changed since 1945, including the generally accepted view of how to treat customers fairly. It is now recognised that, in most circumstances, customers or members should give clear consent, especially in situations involving active and ongoing participation.
We know individuals could be misled by small print and bureaucratic barriers. What was acceptable in the past is now viewed differently. Automatically signing people up to spend their own money without their active consent is no longer seen as acceptable today. Requiring members to act only if they do not wish to contribute is introducing a bias in the decision which can skew the outcome—in the union’s favour, in this case. Exceptions usually are limited to situations where there is a clear public benefit or where it is proportionately expensive or bureaucratic for people to register their non-consent. I do not think either situation applies here.
It is an exaggeration to say that this was a settled issue between 1945 and 2016. The Thatcher Government closely examined requiring active consent and were dissuaded from moving to a system of active consent only by an agreement with the unions that they would provide more information about the choice available to members.
During Committee, it became clear that the second main argument for this change was a concern raised by trade unions about a decline in contributions since the introduction of the requirement for members to expressly give their consent. But surely finding that contributions are less than desired is not an ethical reason to withdraw a right to consent; it is a temptation that should be resisted, as we have seen in many walks of life. When faced with a decline in revenues, most organisations first consider how to improve their presentation. They try to make a more compelling offer, spend more time educating members about the benefits or point out that, as in this case, the financial commitment is not large.
Instead, the proposal in this Bill is to resort to obscurity, automatically making members contributors to political funds without first having their active consent. To make matters worse, the plan is to ensure that they will not be tempted to escape and will be reminded of their right to reverse their decision only every 10 years. Many of us have unwittingly been on the receiving end of this practice with things such as low-cost insurance for household devices.
Baroness Finn (Con)
My Lords, I support the amendment in the name of the noble Lord, Lord Burns. Several noble Lords, including me, spoke at some length in Committee, so I will not repeat the powerful arguments in favour of maintaining the outcome agreed in 2016 that new members should be explicitly asked to make an active choice about whether they wish to contribute to their union’s political funds.
I agree with what the noble Lord, Lord Burns, said about moving away from the language of opt-in and opt-out and towards discussing the principle of making an active choice. The principle of moving from the opting out of making such contributions to opting in was unanimously accepted in the report from the cross-party Select Committee on Trade Union Political Funds and Political Party Funding in 2016. Support for the principle of making such an active choice has only grown in subsequent years. Opt-out has become the less preferred option, as it relies on people’s inertia and, as such, most companies and organisations offer their customers an active choice. Indeed, my noble friend Lady Cash has highlighted the potential legal issues of an opt-out policy. As such, it is astonishing that the Government would wish to revert to a policy of opting out and take such a regressive step.
The compromise agreement in 2016 that subsequent opt-in would apply only to new members was a sensible and proportionate way to deal with the potential cliff edge in the reduction of funds to the Labour Party. Importantly, it ensured that, in the future, members joining a trade union would be asked to make an active decision about whether they specifically wished their money to support the Labour Party or other political campaigns. This was, as the noble Lord, Lord Burns, has suggested, supposed to be a lasting solution to the issue of contributions to political funds.
The 2016 Select Committee report warned of the risk to parliamentary democracy if the then Government used their majority unilaterally to inflict significant damage on the finances of opposition parties. There is a danger now that the Labour Party, in order to improve its own finances by seeking to unwind the unanimously agreed principle that new members should make an active choice—this has been the case now for almost 10 years—could potentially be open to the accusation of abusing entrusted power for private gain.
These are the compelling arguments in support of the amendment from the noble Lord, Lord Burns. I will end with another important observation. In Committee I listened carefully to the excellent speech by the noble Lord, Lord Prentis—I am not sure whether he is in his place today. I pay tribute to the noble Lord for his tireless and brilliant negotiations over many years on behalf of the members of UNISON. He and the noble Lord, Lord Barber, who is in his place, were formidable in their defence of their members in the negotiations with the coalition Government on the reform of public sector pensions.
I totally understand the concern of the noble Lord, Lord Prentis, that unions need political funds to run their campaigns. However—and I think the noble Baroness, Lady Fox, made this point in Committee—it is not right that trade union leaders should be able to pursue their own political issues without the need to actively ask their members whether they are willing to fund them. People who join trade unions believe they are joining an organisation that exists to defend their rights in the workplace. Many are not paid large salaries. It is surely wrong not to ask those who can potentially least afford it to pay into a political fund without necessarily realising that they are doing so. Trade union leaders do their members a disservice by relying on their inertia; they have a duty to make the case for the use of their members’ money for political campaigns. This is another reason why I support this amendment, which makes the case for retaining an active choice so that the preferences of members can be reflected more accurately.
Lord Whitty (Lab)
My Lords, I would like to correct, in a sense, the impression given by the noble Lord, Lord Burns, of the activity of his Select Committee at the time. I was a member of that Select Committee, along with my noble friend Lady Drake, representing the interests of the Labour Party. We did agree on a compromise, but it was not seen as a long-term compromise. It was seen as a holding position until we had an overall review of the financing of political parties in general. Both my noble friend Lady Drake and I made that point clearly, and it is reflected in part in the report.
As the noble Lord, Lord Burns, says, we wanted to get away from the chances of having new Governments switch every few years between the opt-in and opt-out options. I agree that it needs to end, but only at a time when we take account of the way in which political parties, including the Labour Party itself, can be financed by other organisations and institutions. Unless we look at the financing of political parties as a whole, any decision by a particular Government is likely to be biased towards the interests of their own political party’s funding.
I hope that this Government will set up a commission looking at political funding as a whole. Until that point, we should recognise, as we recognised at the time, that the long-term effect of removing the opt-in decision would be, in effect, to bankrupt the Labour Party. We therefore need to look at the totality of political funding, and not at unravelling this particular proposition until we have done so. To be frank, some of the ways in which the Conservative Party accepts funds without the consent of company shareholders, and in which individuals give contributions to all political parties, need examination. I would like the Front Bench to commit this Government, and I hope the other parties will also commit, to such a comprehensive review before we swing one way and the other on opt-out as against opt-in. I hope the Government can give me some comfort that they will do just that at some time in this Parliament.
Lord Barber of Ainsdale (Lab)
My Lords, this is an issue with a long history. In 1909 the Osborne judgment ruled that trade unions could not legally use their general funds for political purposes. Subsequently, the Trade Union Act 1913 was passed by the Liberal Government led by HH Asquith to allow trade unions to establish and maintain political funds. These political funds had to be supported by a ballot of a union’s members and maintained separately from its general funds, and union members had the right to opt out of contributing without facing penalties or disadvantages.
Remarkably, apart from the period from 1927 until 1946, the opt-out rights of trade union members—rather than more onerous opt-in requirements—persisted all the way up to 2016, when new trade union members were required to decide whether they wanted to opt in. This history lesson is a long way of explaining that, for well over a century, the prevailing system of regulating union members’ rights in respect of their union’s political fund has been through their individual right to opt out if that is their choice.
The variation to this dominant model came in 2016 as a result of the excellent work of the noble Lord, Lord Burns, chairing a Select Committee of this House convened to consider this issue. Under his skilful leadership, that Select Committee hammered out a consensus that a change should be made by moving to an opt-in decision to be made by every new member of a union on the point of joining. The noble Lord, Lord Burns, makes the argument today that the Bill should not disturb that 2015 consensus. In particular, he fears that making a change now, after a change of Government, would provide an excuse for a new Government to disturb these arrangements yet again. I must say that I do not have the confidence to anticipate the make-up of that alternative Government, let alone their inclination to tamper again with this issue.
It is no criticism of the 2015 report by the Select Committee, or the decisions made by its members, to note that the agreement that was made was forged in a particular political context, with the alternative to the compromise likely to be the declared intention of the Conservative Government of the day to go for opting in right across the board, including for the millions of existing members. Not surprisingly, for trade unions that was regarded as a highly threatening possibility. The political context today is very different, and proposing returning to the opt-out model that has been so dominant for more than a century is reasonable and fair. Lightening some of the administrative burdens associated with the running of the funds is also desirable in this view.
Much of the debate on this part of the Bill has centred on the role of political funds in supporting the Labour Party. That is one issue, of course, but it is not the only issue. Only 11 of the TUC’s affiliated unions also affiliate to the party and make financial contributions to it. Ten other TUC affiliates have also decided to establish political funds, as the only way they can feel confident that they will be insulated against legal challenges. Just like Labour-affiliated unions, their members see a host of issues in the political sphere in which they have an interest and want their voices to be heard, with the views articulated decided through the unions’ democratic procedures. They too have been burdened by the additional administrative requirements of the 2016 Act and will benefit from the provisions of this Bill.
Looking all the way back to 2013, where I started, I wonder how it came to be decided to single out activity in the political world for this complex set of arrangements around political funds. Unions have a host of functions: they support members in collective bargaining, promote greater opportunities for skills development, represent individuals in grievance and disciplinary issues and provide legal representation when needed. Naturally, they want to play their part in civil society, in contributing to the debates in the sectors in which their members work, where they are deeply invested, and all the other issues that shape the world around us. Why this area of work for democratic organisations has to be so closely and differently regulated in an age when people can now choose to join or not is, to me, something of a curiosity. But that is not the issue before us today, and I hope that the noble Lord, Lord Burns, may be prepared to reconsider and not press his amendment.
Lord Monks (Lab)
My Lords, I oppose Amendment 147. The compromise formula that my noble friend Lord Barber has just talked about was a very practical solution to a tricky problem in the period when the noble Lord, Lord Burns, and his committee did such good work. However, I take issue with his claim that it was some kind of permanent solution, any more than was an agreement on contracting out reached by the Thatcher Government in 1984, headed by the noble Lord, Lord King of Bridgwater, who I am sorry is not in his place today, with the TUC. The provisions of that meant that the unions would be obliged to notify people regularly about the right to contract out, in the union journal and on the website, along with all the kinds of things that unions communicate with members about.
It is worth briefly dwelling on that. It stipulated obligations on unions, as I said—and we thought that we had a lasting settlement then, but we were wrong. In 2016, the then Government came along with a Bill to provide for general contracting in; they did not initially mention the King-TUC agreement and gave no initial examples of union abuses of it. They had made no approaches to the TUC or to any unions about things that were not quite working. The certification officer was happy with what was going on. It seemed to me that the Government at that time were either forgetting about the agreement—which they might have done, I guess, given the interval—or ignoring it. Only when I gave notice to the noble Lord, Lord King, that I was going to raise the question of the agreement in this Chamber in the initial debates on the Bill did the Government embark on a frantic quest to find examples of union non-compliance, which were later challenged by the TUC.
The Burns committee did its work and came up with a good deal—but why should it be regarded as permanent, any more than the TUC-King agreement was regarded as permanent? There is another problem with the Burns formula being regarded as permanent. Initially, in 2016, the bulk of union members remained contracted out only; it was only the new members that unions had to actively recruit. Of course, in the past nine years, the relative proportion of contracted-out and contracted-in members has changed considerably. If we give it another nine years, as in the period from the 2016 agreement to now, there will not be many contracted-out members left. In effect, what we will have seen is that the Burns formula in practical terms becomes a phased introduction of contracting in—and that is just not acceptable.
This is not an attack on the Burns formula, far from it, but it was of its time, as was the TUC-King agreement. The only permanent solution to this historic and bitter issue—because the history that my noble friend Lord Barber spoke about is a bitter one—will be a fair agreement on the fundraising of all the political parties, as my noble friend Lord Whitty has spoken about already. I oppose the amendment.
Lord Balfe (Con)
My Lords, it will probably not surprise noble Lords that I support the amendment. This situation has cursed the whole of the trade union movement’s relations with the Labour Party for far too long. As some of you will remember, I am the president of BALPA, the pilots’ union, a non-political union that does not have a political fund. In so far as it has ever been discussed in the union executive, the unanimous conclusion has been that to have a political fund would be extremely divisive and not a path that we should go down.
To some people, the solution to this situation— I will not call it a problem—is to pass a simple law saying that trade unions cannot make political donations. If we are not prepared to accept this compromise, then that is what we are drifting towards. If we look at the Labour Party accounts, we see that it gets far more money from non-trade union sources than from trade union sources. When I went through the accounts, I saw that there was one very rich lady who appeared to give more to the Labour Party than all the trade unions put together. I am not sure that she was of British nationality, either. But that is irrelevant—the fact is that political funding has got completely out of control in both parties. We need reform, but one interesting thing is that the arguments of the Labour Party appear to be very similar to the arguments of the diehard Conservatives as to why we should not abolish the hereditary peerage; namely, that we should wait for comprehensive reform. We are probably not going to get a comprehensive reform of political donations in this way. I would suggest that the compromise from the noble Lord, Lord Burns, is a very good one. It has worked and has kept the peace for a long time.
There has to be clear consent—to my mind, clear consent is a quite reasonable thing. Why should you not ask for clear consent before you deduct money from people’s contributions? It seems like a no-brainer to me. I would suggest that we leave things in place, adopt the amendment from the noble Lord, Lord Burns, and hope that this matter will go to sleep for at least another 10 years, during which time the parties will have as much time as they like to come up with reforms.
I should remind noble Lords that at the beginning of the Parliament Act 1911 on the reform of the House of Lords were the historic words “pending a full reform”. We are still told by Conservative Party Members that what is proposed by the Labour Party for the House of Lords is not a full reform. I have said, and will say it here, that we will never get one—we will never get that agreed.
I would like to see reform on the amount of money that people can put into political parties. I do not think that the people who put vast amounts of money into the Conservative Party do so because they have no expectation of any sort of reward. I think that they do it because they think that the Conservative Party will deliver what they want—whether that has happened is for them to now judge. The fact is that people do not support political parties other than with the aim of changing power and of getting changes in society.
My union general secretary, a certain Sharon Graham, has my full support, because for the first time in what I still think of as the T&G—my original union was AUEW-TASS—we have a general secretary who I think is fully behind the people who are paying her salary, and this is something quite different, but I think this demand is going to grow. If there was an open ballot in BALPA with a simple question, “Should we construct and set up a political fund?”, it probably would not get 10% in favour, because the whole way in which political funds have developed is not seen by the ordinary branch member as something they want to indulge in. Most of them see it as a sort of slush fund for the senior officers. I am sorry, but we have to face that and we need to get away from it.
So I hope that the amendment of the noble Lord, Lord Burns, will be accepted and that we will carry on with the admittedly unsatisfactory present system until we get this full reform that we have been asking for, although it will be a long time after I have left this place.
Lord Davies of Brixton (Lab)
The speeches that have been made in this debate about an important issue are clear, and I strongly support those made on this side of the House. Because of the exigencies of where the issue arises in our consideration of the Bill, I have tabled manuscript Amendment 147A. Noble Lords may well be scratching their heads, but it is a manuscript amendment, which has been circulated separately, on a different subject, but it comes up at this point of the Bill. It has been brought to my attention by my union, Unite, and I need to declare that, but it is an issue of concern to all unions.
The unions strongly support the provisions in the Bill which introduce paid facility time for equality representatives. This is an important development and it is something for which unions have campaigned for some years. However, there is concern that there are some technical problems with the provisions in the Bill, which is why I need to raise them now. We are looking at Clause 62, which creates the right for paid time off for this new initiative of equality representatives in certain circumstances. It appears to me that there is a deficiency in the Bill, in that it says they are entitled to this time off for the purpose of consultation, but it is quite clear that these representatives will also be involved in negotiating. My manuscript amendment seeks simply to add “negotiating” in front of the existing provision in the Bill that says that these equality reps are involved in the process of consultation. I hope that my noble friend the Minister will be able to give a favourable response to what is essentially a technical issue, but one which I need to raise now.
Baroness Fox of Buckley (Non-Afl)
My Lords, I feel in something of a time warp, because I opposed Clause 62 in Committee and tried to get it dropped, but I want to go back to the discussion we were having on Amendment 147. I support this amendment, because I genuinely think there are very good reasons why the trade union movement should not be frightened of this amendment, and I do not understand the changes that have happened. All the amendment does is to try to retain, at least notionally, control in the hands of trade union members: they should decide where they want their dues to go and whether they want them to go into a political fund. What could possibly be frightening about that?
It means that, at least in theory, the trade unions will have to be kept on their toes and justify why members should opt in, and therefore not assume or assert that their union’s political activity—which, to be fair, is often far removed from rank and file workers’ interests—is on behalf of their members. It simply puts unions in a position in which they have to convince their members to opt in.
Baroness Cash (Con)
My Lords, I support Amendment 147, which is in the name of the noble Lord, Lord Burns. Conscious of time passing this afternoon and the fact that we have a lot to get through, I will make two points.
We debated this at some length in Committee, but it is clear that the European Court of Human Rights has repeatedly affirmed that the freedom of association under Article 11—which is now, of course, incorporated into our own law—includes the right not to be forced into a political association or compelled to subsidise political causes, as well as the right to do so. To ensure that we have the right cases on the record, I note that in Young, James and Webster v the United Kingdom, in Sørensen and Rasmussen v Denmark, and in Sigurjónsson v Iceland, the court found that even indirect compulsion —which is an opt-out mechanism, as one of those cases found—where individuals are financially or contractually locked into supporting ideological activity, even temporarily and regardless of how short that period may be, is incompatible with Article 11.
Worse than that, these principles have been shown, through a lot of research, to damage the well-being of employees. Union affiliation with a political party increases the perception of coercion, according to a field study conducted by Taylor and Bain in 2019. The intrusion of party-political activism into the workplace, whether through political fund default enrolment or visible partisan campaigns—or, incidentally, even just union communications—has been shown to undermine employee well-being, trust and cohesion. It impacts on mental performance, and we should note the problem that this country already has with sickness benefits. To do this and to regress to a position of an opt-out will have the most negative and wide-reaching of effects, so I support the amendment.
Lord Hendy (Lab)
My Lords, the House will not want a legal argument between me and the noble Baroness.
Lord Hendy (Lab)
Yes, not again—we rehearsed that in Committee. However, those cases do not support the proposition that the noble Baroness advanced. The case of Young, James and Webster v the United Kingdom concerned three railway workers, who were compelled to join a trade union against their wishes—a closed shop—and the European Court of Human Rights held that they should not be compelled to do so at the risk of losing their jobs. It had nothing to do with making political payments or being associated with a political party.
Baroness Cash (Con)
The noble Lord is right that that is what the case was about. However, one of the factors in the judgment was the absence of a refund mechanism. I recall a rather fun debate between the noble Lord and me in Committee, which I hope we will not exhaust everyone by repeating today; however, it is really important that this is clarified. Article 11 will be engaged if the measure in the Bill is done; it is regressive and wrong in law and it will be subject to legal challenge. The European court found that it engages Article 11 where there is no refund mechanism. If the Labour Party or a political fund retains the subscription for even one second, it will have engaged unlawfully with Article 11.
Lord Hendy (Lab)
My Lords, the difference is that, if you are a member of a trade union, you can leave the trade union. There is no compulsion to remain a member of a trade union. If you do not like paying the political—
Baroness Cash (Con)
My Lords, I will intervene once more and then that will be it, because I do not want us to repeat the ping-pong we had between us in Committee—I am sure that we can take it outside, as they say. It is of course completely normal for noble Lords in this House to disagree at times.
I want to clarify that I am not saying that this compels someone to remain a member of a union—that is not what is happening here. The way that the Bill is drafted allows the payment to be taken by the union and provides for no refund mechanism. There is a minimum period of one month before the notification of the opt-out is received, and then a permissible further cycle of salary is allowed before the subscription is stopped. There is no mechanism for a refund. So, in any opt-out, the union keeps some of that person’s money —that is what is unlawful.
Lord Hendy (Lab)
I will try to finish the point in just a couple of sentences. The point is that somebody who does not like paying the political subscription can simply leave the union. If they object to it, that is what they can do. That freedom is protected by Article 11 of the European convention and is ratified in a whole number of cases. I will not develop the argument further. I would love to take it outside with the noble Baroness. We can have a drink and go into all the cases.
I just wanted to make one further point. The suggestion was made by the noble Lord, Lord Balfe, that perhaps trade unions should be barred from making political payments at all. It is an interesting argument, which nobody else has advanced. It reminds me of the point my noble friend Lord Barber made about the fact that the requirement to have a political fund, introduced in 1909, is imposed on no other organisation in this country. Companies do not have to have separate political funds, ballot their members or shareholders or answer to anybody in making a political donation. It is only trade unions that are required to hold political funds with all the paraphernalia of opting in or opting out. I am not going into that argument.
I was contemplating—I never did it, but perhaps I should have done—moving an amendment that trade unions should be relieved of having political funds at all. It was a requirement which answered the Law Lords’ decision in Osborne vs the Amalgamated Society of Railway Servants in 1909, eight years after the foundation of the Labour Party, to bar trade unions from funding the political party that they had just launched. If we got rid of trade union political funds, we would not be having this argument at all.
Lord Leigh of Hurley (Con)
My Lord, I will speak to the amendment from the noble Lord, Lord Burns, and to my own Amendments 152A and 152B. In so doing, I congratulate the noble Lord, Lord Burns, on this amendment. I remember the debate we had at that time. There is no question about it: every side of the debate compromised. I remember Ministers from the other place telling us that we had to compromise and we had to make concessions that we did not feel were right. The deal was done, and the deal still holds.
The point made by the noble Lord, Lord Whitty, that we should do things in the round and in one is exactly right, rather than making this piecemeal change that the Bill proposes, if there are to be dramatic changes. I accept that times have moved on and that funding for the Labour Party is largely from individuals rather than from unions. None the less, if we are to make changes, then let us look at them in the round rather than observing the piecemeal change proposed in the Bill.
I have to correct the noble Lords, Lord Whitty and Lord Hendy. Companies cannot make donations to any political party without prior shareholder approval in the period of a year—not 10 years, but one year. That approval lasts only one year and has to be refreshed at the annual general meeting. Noble Lords are encouraged to look at the accounts of any company—certainly a public company—to see that that is the case.
Lord Whitty (Lab)
That is true, but it does not require a ballot of individual shareholders. There is a vote once a year, or whenever, so that a donation can be made at the annual general meeting. It is not a ballot.
Lord Leigh of Hurley (Con)
With great respect, every shareholder gets a mailed piece of paper with a box to tick—every single shareholder every single year. If that is not a ballot, what is?
Lord Barber of Ainsdale (Lab)
Do shareholders get an opt-out facility from political donations that the company is making on behalf of the owners of the company?
Lord Leigh of Hurley (Con)
They can certainly vote against it, and that happens quite regularly. The situation is exactly the reverse of the one put forward by the Benches opposite.
My focus is on Clause 77, which the noble Baroness, Lady Fox, highlighted. It is a complicated clause. It refers us to the Trade Union and Labour Relations (Consolidation) Act 1992, which was itself amended by subsequent Acts, and to the famous aforementioned Section 32ZB, which relates to details of political expenditure in the political fund. The political funds, as I think has been said, were set up to protect the unions because the law did not allow them to make donations directly, so the political fund allows donations to political parties. But this clause requires details of any political expenditure to be disclosed in the annual return to the certification officer, and that is what the Bill wants to get rid of. It was brought in as Section 12 of the Trade Union Act 2016.
Lord Evans of Rainow (Con)
My Lords, I shall speak to my Amendment 149, regarding broad workforce support. I was born and brought up in a working-class community that was specifically built to supply workers to build aircraft for a very large organisation employing thousands of people. As a teenager, I was lucky enough to get a job there, but I worked for a contractor which was not unionised. I remember going to the works canteen on the first day, and I was asked two questions: was I a member of a union and was I a Tory? The answer was no to the first one; as to the second one, I did not quite know because I was not old enough to vote, but perhaps I did turn out to be a Tory. I was asked to leave and told that if I was not a member of a union, I could not be in the canteen, so I left.
Because it was a tight-knit, working-class community, I was asked later by family, friends and relatives who worked at this factory why I did not go to the canteen. When I explained to them that I was not made welcome on the first day, they asked, “Who was it who said you couldn’t come in?” When I explained to them who it was, they said, “Oh, don’t take any notice of him, he’s a union convener”—I cannot remember the name of the trade union. Then I started to learn one or two things about trade unions. My noble friend Lord Balfe reminded me that there was a pecking order within the workforce. I learned that different trade unions represent different skill sets. I recall, because it was an aircraft factory, that if you were an electrician and a member of TASS, you regarded yourself as a superior trade unionist.
Lord Evans of Rainow (Con)
Some things have not changed. Then you had the mechanical engineers, the aircraft fitters, and so on and so forth: several different unions representing different members. I learned as a very young man that some unions are more militant than others and that a very small group of people could bring a whole aircraft plant to a halt.
I recall crossing a picket line. I was not a member of a trade union, but I was a contractor. A small group of trade unionists brought the plant to a halt. I turned up to work and wanted to go through the gates, and I was barred. But I was always taught to stand up to bullies, so I insisted on going through the gates—indeed, I did walk through the gates. I can remember to this day—and it is 45 years ago—the abuse I received as I walked through those gates to work as a young teenager. I still recall it, because every time I go to a Conservative Party conference I get a very similar amount of abuse. So some things have not changed.
The noble Lord, Lord Barber, rightly pointed out that trade unions are a force for good, because they look after their members in so many ways. Nobody across this House would argue with that. But the point of my amendment is that a small group of militant colleagues on the trade union side can bring the whole factory or organisation to a halt. Throughout this debate we have talked about SMEs; in this case I am talking about a very large organisation. It is the intimidation of the minority that affects the majority. Eliminating the 50% turnout threshold for strike ballots would significantly lower the bar for industrial action, allowing strikes to proceed if only a small minority of the workforce participates. This creates unpredictability and challenges for business continuity and planning, as substantial disruptions could occur based on the votes of a very limited number of employees.
In sectors where products are highly perishable, including the distribution of medicines or those with just-in-time supply chains, the ease of initiating industrial action increases the risk of supply chain interruptions. Some medical products have a limited shelf life. Strikes at distribution centres could lead to critical shortages, with direct consequences for public health and patient care. For industries that rely on seasonal production cycles, such as manufacturing and distribution of vaccines, removing the threshold places the delicate timing of mandatory deliveries at risk.
Even short periods of industrial action could jeopardise the ability to meet strict production targets and delivery deadlines, impacting public services and national preparedness. Lowering the requirements for strike action could deter domestic and international investors, who typically are seeking business environments with stable industrial relations frameworks. The potential for frequent or unpredictable strikes may lead to perceptions of elevated operational risk, discouraging long-term commitment across multiple sectors. The absence of a robust threshold may undermine industrial relations by encouraging strike action that lacks clear, broad-based support among employees. This could erode morale, create internal divisions and reduce trust between management and staff, ultimately affecting organisation productivity and the wider economy. I grew up in the 1970s; we do not want to go back to the 1970s.
Lord Jackson of Peterborough (Con)
My Lords, I will speak very briefly to Amendment 149A—and Amendment 149, spoken to very ably by my noble friend Lord Evans of Rainow. He is absolutely right about the qualifying percentage. Not long ago, I was thumbing through my copy of the Labour Party rules, as you do; the template rules of the Labour Party. I noticed that regional executive council meetings of that party have a quorum of 33% in terms of any decisions made in the deliberations of that committee. If the Labour Party is going to impose a less than 50% and certainly less than 33% marker for decisions being made internally, it is odd that it does not take a similarly robust attitude towards important decisions that affect many workers in industrial landscapes and industrial relations.
Amendment 149A addresses a very perverse consequence—the decision, in terms of Clause 72, to remove proper organised supervision of industrial disputes in the industrial landscape that we have at the moment. It is pretty odd that there does not appear to be a rationale for this. It seems sensible and prudent for us to be in a position where trade union officials are responsible for ensuring that there is an orderly management of industrial disputes. No case has been made by Ministers, in Committee or at Second Reading, for why it is necessary, other than demands from the trade unions to remove that part of previous legislation.
Baroness Lawlor (Con)
My Lords, I support the amendments in this group and I will say a word in particular about some of the amendments. On the amendment from the noble Lord, Lord Burns, which would remove Clause 59, people in the country will ask, “How can it be that, in a democracy, a payment is automatically deducted from membership fees for a political fund?” That is a question about democracy in the workplace. How is it that it can go—if it does go—to one political party? I take the point about affiliated unions and the different purposes for which the political funds are used, but we are being asked as a Parliament to pass legislation that has a direct impact on the party opposite: the Government. I cannot think that there is a similar arrangement by trade unions for any other political party, but I am willing to be put wise. So, it is a sectional problem that we are dealing with.
All the amendments in this group seek to tackle workplace democracy under the Bill, which would use the law to promote the powers and funds of trade unions, despite their shrinking membership. Some 11% of them are in private sector businesses and command practically the whole productive economy of this country, and 30% are in the public sector—so 20% overall. Yet these unions are being pivoted into power with automatic funding from their members for political purposes. I think it is wrong that this should happen and be a matter of law for us to pass.
In the amendment from the noble Lord, Lord Burns, which would remove Clause 59, we see the automatic payment deducted from the membership fees. That undermines any claim the Government make that the Bill is good for workers. It is the sort of sharp practice that is not only discredited in other walks of life but, in this context, unless it omits Clause 59, it brings disrepute on the unions, the Government and this Parliament. Otherwise, people in the country will rightly feel that the Labour Government of July 2024 has in the matter of so-called rights used the Bill, and other measures, to pivot one minority in this country to a position of dominance in our economy and work- force. That will not be regarded as a fair position in this country.
I also, for the same reasons, support the amendments from the noble Lord, Lord Leigh of Hurley, to omit Clauses 77 and 78 because, in the interests of transparency, working people and trade union members need to see in the annual returns what the political funds are spent on. The noble Lord referred to some of the political purposes that they are used for. Of course there are others, and they may be very good purposes, but surely it is in everybody’s interest that we have transparency, just as I think the certification officer should have enforcement powers.
In the same vein, the amendments from the noble Lords, Lord Evans of Rainow, Lord Sharpe of Epsom and Lord Hunt of Wirral, suggest that the 50% threshold in a ballot for strike action should be retained. Without these safeguards, we make a laughing stock of the idea of democracy in the workplace, our economy and the whole country if we pivot a minority into this false position of power over a majority of the people concerned in the ballot, concerned in giving money or concerned in having their returns properly transparent.
I do not like the totalitarian thread of the Bill. Times have moved on since the days of Herbert Henry Asquith and the time when trade unions represented working people and the industrial economy was at the heart of Britain’s economy. Times have changed. Working practices have changed. Safeguards for people who pay money have changed. Today we see a service economy of roughly 80% and a productive economy of goods of roughly 20%. All the amendments in this group matter, and I particularly support those to omit Clauses 59, 77 and 78 and reverse the attempt by the Government to remove the 50% threshold for decisive action in a ballot.
Lord Goddard of Stockport (LD)
My Lords, I rise with some trepidation to follow that 70 minutes of riveting debate. Members may argue that that is the point of this House, and that is what we do. Well, we could have just put the tape recording from Committee on and then gone to the Tea Room for a tea and played it for the same amount of time. Almost the same number of exponents were expressing the same views again and again.
I will try to be as brief as possible. The noble Lord, Lord Burns, is right. We support his amendment. The reason for that is that the opt-in system is the best because it maximises choice and transparency for individuals and retains political funds. They need to understand what their funds are being used for.
Amendment 148 in the name of the noble Lord, Lord Sharpe, would retain the 50% ballot threshold required for trade unions undertaking industrial action. The Bill would remove this threshold entirely, meaning that a trade union could vote for strike action without a majority of eligible voters. We tabled similar amendments in Committee, and we have concerns about the democracy and democratic integrity of strike action ballots, which this Bill could potentially harm. We also believe that the current threshold for being able to undertake strike action is suitable and that making it easier to strike risks putting further pressure on public services. If a Division is called on this amendment, we will also support it.
Lord Goddard of Stockport (LD)
The noble Lord, Lord Hunt, will say “Hear, hear” no more because we cannot support Amendment 149A, which is a new amendment that proposes removing Clause 72. I will tell the House why we cannot support it. On Monday I supported the noble Lords, Lord Hunt and Lord Sharpe, when we were very critical of the Government for tabling amendments on Report. People nodded wisely and said that it is not a good thing to do, yet this amendment was tabled today or yesterday. It has had no time for discussion or debate. It has had no time for people to understand its nuances. We know that it takes a big chunk out of the Government’s manifesto pledge Bill, and that does not seem fair to me.
In our view, legislation should be done through constructive amendments. If you do that, you end up with a compromise, whether it is through ping-pong or by persuading the Minister to change their point of view. It is almost like taking the sledgehammer again, and that is not good politics. It is not good for the House, and it is not good for Members. Lots of Members come into these debates, not all the time, and try to get a flavour of what is going on. They might hear that Amendment 149A, which sounds fairly reasonable, has been put forward. It is not fairly reasonable; it takes an enormous chunk out of the Government’s Bill, and that cannot be right for democracy. I have criticised Ministers many times, but we should be mindful that it is in the manifesto and move legislation via amendments rather than trying to remove huge chunks of legislation. On that basis, we will not support Amendment 149A.
Lord Sharpe of Epsom (Con)
My Lords, on balance, it is a great pleasure to follow the noble Lord, Lord Goddard. I will speak to Amendments 148, 149A, 149ZA and 150 standing in my name and that of my noble friend Lord Hunt of Wirral. Before I do that, I thank the noble Lord, Lord Burns, for his common- sense amendment. We think political contributions must always be a matter of choice, not a default. That seems to us a fair and democratic principle, and the Government ought to listen. I was particularly pleased to see that the Attorney-General was in his place to listen to the excellent arguments advanced by my noble friend Lady Cash, which all pertain to international law. I hope he was paying attention. If the noble Lord, Lord Burns, decides to test the opinion of the House, we will support him.
I turn to Amendment 148. On 8 July, the Secretary of State for Health and Social Care, Wes Streeting, remarked rather pointedly that despite the fact that the majority of resident doctors did not vote for strike action, the BMA is now preparing for strike action and it is completely unnecessary. Who can blame him? Strikes are happening under the existing law, and now this Government propose to remove the 50% threshold, the very last democratic safeguard that ensures that strikes have substantial backing. What would that do? It would significantly lower the bar for strike action and allow a smaller minority to cripple vital public services. It is worth bearing in mind that it is public services we are talking about because that is where the bulk of union members are. One has to wonder whether the Government agree with their own Health Secretary. If they do, why are they proposing this? If they do not, will Mr Streeting be invited to correct his error on the record? Do the Government share the disappointment that he expressed on 8 July about the BMA’s strike action or was that simply a performance for the cameras, a convenient public relations stunt, while others quietly dismantle safeguards and seek to make extremists more powerful?
On Amendments 149A and 150A, I am grateful to my noble friend Lord Jackson of Peterborough for his words. Earlier this month, Norman Tebbit, Lord Tebbit, died after a long period of illness. One of his enduring legacies was his role in turning around an unemployment crisis that peaked at 11.5% in 1982. Thanks to the reforms introduced on his watch, the rate fell sharply thereafter. The success was later acknowledged even by the Blair and Brown Governments, who accepted the new consensus, a fair balance between workers’ rights and the flexibility that businesses need. It was the late Lord Tebbit who warned us that we do not intend to see again the scenes of intimidation, mass picketing and political strikes that disfigured our country in the 1970s. That warning remains as relevant today as it was then. Supervision of picketing is an essential safeguard. It ensures that industrial action remains peaceful, lawful and accountable. Removing these provisions, as the Government propose, risks returning us to the chaos and intimidation of the past, as described so ably by my noble friend Lord Evans of Rainow.
Amendment 149ZA is crucial to protect airlines from unfair financial risk caused by conflicting notice periods. This was originally tabled in Committee by the noble Lord, Lord Hutton of Furness. He raised a timely and important issue. As he did not retable the amendment for Report, we did because, frankly, the Committee debate was very late, it was truncated, and the Minister’s response was inadequate.
I refer noble Lords to col. 1342 of Hansard on 10 June for the detailed arguments of the noble Lord, Lord Hutton, but in essence they are that, under current law, airlines must give at least 14 days’ notice of industrial action to avoid costly compensation claims under passenger rights legislation—namely, UK261—unless there are extraordinary circumstances, and a ruling of the European Court of Justice in 2019 made it clear that a strike by an airline’s own staff is not considered an extraordinary circumstance.
The amendment would therefore simply protect airlines from having to pay hundreds of millions in compensation for cancellations caused by strikes. Reducing the notice period to 10 days would expose airlines to up to four extra days of compensation liability and a serious and unavoidable financial burden that would inevitably be passed on to passengers, making family holidays even more expensive for working people. The amendment would ensure that the 14-day notice period remained for industrial action affecting airlines, and it would align industrial relations law with passenger rights and protect vital UK businesses from crippling— I will be charitable and say probably unintended—costs.
In Committee the noble Lord, Lord Katz, argued that this would represent a sectoral carve-out, but that is not a logical argument as the sector is governed by a rule that does not apply to any other. It is therefore entirely consistent with a level playing field. It is the contradiction in legislation that puts airlines at a disadvantage.
Finally, I agree fully with my noble friend Lord Leigh about seeking to maintain the requirement that trade unions should report their political expenditure in their annual returns. I shall support him too, should he wish to call a Division.
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 we have had an extensive debate that indeed feels a bit like another day in Committee, but I know we all want to move on so I will try to be as brief as I can.
Amendment 147 was tabled by the noble Lord, Lord Burns, and I thank him for the ongoing engagement that we have had on the topic of political funds throughout the progress of the Bill in this House. In drafting the Bill, we have of course been mindful of the lessons learned in the conclusions of the Burns committee on trade union political funds and political party funding. I am also grateful to my noble friends Lord Monks, Lord Barber and Lord Whitty for reminding us that the compromise at that time was not intended to be a long-term arrangement, particularly because of the imbalance then, which still exists, in political party funding, which has yet to be addressed.
In the meantime, the Government believe that the 2016 Act places unnecessary red tape on trade union activity that works against their core role of negotiating, dispute resolution and giving a voice to working people. We are seeking to redress that balance and remove the burdensome requirements on how unions manage their political funds. This is why the repeal of the 2016 Act was a manifesto commitment. By reverting back to the automatic opt-in for new members, we are simply returning to a long-standing precedent that was altered by the previous Government through the 2016 Act. Prior to that, automatic opt-in was in place for 70 years, even during the Thatcher and Major Administrations.
The noble Baroness, Lady Cash, raised the issue of Article 11. The Government are confident that our measures relating to political funds comply with Article 11 of the European Convention on Human Rights. Article 11 provides the right to freedom of peaceful assembly and freedom of association with others, including the right to form and join trade unions for the protection of their interests.
Unlike subscriptions in the private sector, when we speak about unions and their political funds we are ultimately talking about voluntary organisations whose members have willingly come together to represent their collective interests. Political funds are one mechanism that unions can utilise to further their shared goals. Political funds are not just about affiliation to political parties; they can allow unions to participate in and campaign on a range of issues in their members’ interests. Examples include lobbying MPs, broader public campaigns, research to develop policy ideas and paying travel expenses for workers to attend Parliament to give evidence on issues that they face at work.
Lord Balfe (Con)
BALPA, the union of which I am president, does all those things without a political fund.
Baroness Jones of Whitchurch (Lab)
Political campaigning, which the noble Lord will know is clearly spelled out already in the legislation, requires some of these issues to be paid for out of the political fund, Indeed, my own union, UNISON, operates two separate political funds, as my noble friend Lord Prentis explained in Committee, one of which relates to the party-political affiliation and the other to the wider campaigning role. Of course, not all political party payments have gone to the Labour Party; they have gone to other parties and candidates as well.
The payments must be established through the democratic structure of the union. Those same structures make unions accountable to their members, who are free to participate in the democratic process to shape how those political funds are utilised. Joining a trade union is an informed decision and members will be made aware of their right to opt out of political fund contributions. Indeed, we have been careful to draft the Bill to ensure that new members will continue to be notified of their right to opt out on the membership form when they join the union. In line with the recommendation in the report of the committee of the noble Lord, Lord Burns, the membership form will also have to make it clear that opting out will not affect other aspects of their membership. Those changes should help to address concerns that trade union members were not always aware of their right to opt out of the political fund under the system that existed before 2016. If members wish to exercise that right to opt out, they are free to do so at any time.
We are not altering the arrangement for existing union members. If they decided to join a union with the knowledge that they would be opted out of political fund contributions, they will continue to be opted out once the Bill passes. As I hope I have explained, automatic opt-in will reduce the administrative burden on unions while still allowing members to make an active choice not to contribute to the political fund if they so wish.
I turn to Amendment 148 tabled by the noble Lord, Lord Sharpe, and Amendment 149 tabled by the noble Lord, Lord Evans of Rainow. The existence of the 50% turnout threshold is not in line with the Government’s intention to create a positive and modern framework for trade union legislation—a framework that delivers productive and constructive engagement, reduces bureaucratic hurdles and respects unions’ democratic mandates.
The 50% threshold is a high bar and is not consistent with other democratic decision-making. Votes in Parliament and votes for MPs and local councillors do not normally include any turnout threshold but are not thereby considered any less legitimate. Indeed, most local elections are contested with a turnout below 50%—I am sure that a number of noble Lords who have previously been councillors have been elected on a less than 50% turnout—and nor, for the most part, do votes at general meetings of companies require any turnout threshold. Those who oppose industrial action are free to vote against it in a ballot, and they will have their voices heard in the normal way.
The Government have been clear about our intention to repeal the Trade Union Act 2016, including industrial action ballot thresholds, but the amendments would prevent the Government delivering on that manifesto commitment. I was pleased to hear the support of the noble Lord, Lord Goddard, for upholding our manifesto commitments, and I will remind him of that when we come to vote on these amendments.
The date for the repeal of the 50% threshold will be set out in regulations at a future date, with the intention that it is aligned with the establishment of e-balloting as an option for trade unions. Together with the delivery of modern and secure workplace balloting, the intention is that this will ensure that industrial action mandates will have broad and demonstrable support.
As I expected, the noble Lord, Lord Sharpe, talked about the doctors’ strike. The Secretary of State has held constructive meetings with the BMA resident doctors committee to try to avert strike action by discussing how we can work together to improve the working lives of resident doctors. However, the BMA RDC has refused to engage in further discussions and has instead chosen to proceed with its planned strikes. Our view is that strikes have a serious cost to patients, so once again we urge the BMA to call them off and instead work together to improve members’ working conditions and to continue rebuilding the NHS.
On Amendment 149ZA tabled by the noble Lord, Lord Sharpe, the Government have made it clear that we do not intend to make sectoral carve-outs for the limitations and conditions that apply to industrial action. That is demonstrated by our repeal of the Strikes (Minimum Service Levels) Act and the repeal of the 40% support threshold for industrial action ballots, both of which remove the further conditions on industrial action that currently exist in some public services.
Ensuring that statutory notice periods for industrial action are consistent across every sector will ensure that the rules are straightforward and clear to all parties involved in industrial action in every circumstance. It is then for employers in each sector to be mindful of these rules and manage their industrial relations and businesses accordingly.
I also want to make it clear that repeal of the 14-day notice period forms part of our manifesto commitment to reverse the Trade Union Act 2016. Following the outcome of our public consultation on creating a modern framework for industrial relations, we decided that a 10-day notice period for strikes was the appropriate balance between giving employers time to prepare and upholding the right to strike. It is also a minimum, not a maximum, period and employers will be able to plan for industrial action long before receipt of a notice.
Our approach is not an outlier. The UK will still provide one of the longer industrial action notice periods in Europe. Many European countries have shorter or no notice requirements on industrial action, while also requiring airlines to comply with the EU version of Regulation 261/2004. We are aware that under Regulation 261/2004 an airline may be liable to pay passengers compensation if it cancels a flight less than two weeks before its scheduled departure. But even under the current 14-day industrial action notice period, in practice airlines may therefore still be liable to pay compensation if they need to cancel flights due to industrial action.
I turn to Amendments 149A and 150, tabled by the noble Lord, Lord Sharpe. As the period of disruption between 2022 and 2024 has shown, administrative requirements and bureaucratic hurdles only make it more difficult for trade unions to engage in good-faith negotiations with employers. This is why we are substantially repealing the Trade Union Act 2016 and fixing the foundations for industrial relations that have not delivered for workers, employers or unions in the meantime.
Legislation governing picket lines is, of course, essential and, to be clear, we are repealing only those additional measures introduced by the Trade Union Act 2016 in relation to the role of a picket supervisor. Substantially repealing this in the Act is also a manifesto commitment, while other legislation relating to picketing will remain in place. Picketing must take place at a lawful location, it must be peaceful and those on picket lines must not intimidate or harass workers who choose to attend work. The existing Code of Practice on Picketing, once updated to remove the requirement for a picketing supervisor, will continue to support the legislation on picketing. Together these are sufficient to ensure the operation of peaceful picketing.
The Government’s impact assessment on the repeal of the Trade Union Act 2016, published in October 2024, set out the expected impacts of the removal of the requirement for a picketing supervisor and is available for all to read. The assessment shows limited evidence of serious problems on picket lines prior to the introduction of the 2016 Act, and there remains limited evidence of problems on picket lines in more recent years. The assessment concluded that it is therefore unlikely that the removal of the additional legal requirement to appoint a picketing supervisor will have a noticeable effect on the impact of picketing during disputes. There is nothing new to add to that assessment; we are simply returning the law on picketing to what it was prior to 2016 when it was working well and understood by all parties.
I turn to Amendments 152A and 152B, tabled by the noble Lord, Lord Leigh of Hurley. I think on previous occasions the noble Lord has reminded us of his role as treasurer of the Conservative Party, although he did not on this occasion. Clauses 77 and 78 of the Bill, which these amendments would—
Lord Leigh of Hurley (Con)
I am sure the noble Baroness is aware that positions that do not require financial remuneration do not need to be declared. I did, in fact, make that declaration at Second Reading and in Committee and no further declaration is required.
Baroness Jones of Whitchurch (Lab)
I think that is the point I was making; I was just reminding the noble Lord. He could have reminded us on this occasion, given that a number of his points were very much party-political ones.
Clauses 77 and 78 of the Bill, which these amendments would omit, remove burdensome requirements and regulation on unions imposed by the Trade Union Act 2016. This red tape works against unions’ core role of negotiating and dispute resolution, which is why we made a manifesto commitment to repeal the Trade Union Act 2016. In relation to Clause 77, trade unions will continue to submit an annual return to the certification officer; however, the amount of information required in that return will be less.
Lord Leigh of Hurley (Con)
Can the Minister be quite clear with us in that case? She said that unions will be required to report to the certification officer gross amounts of income and expenses. Can she be crystal clear that there will be no requirement to disclose expenses made within the political fund to any organisation?
Baroness Jones of Whitchurch (Lab)
My understanding is that the political funds will be required to continue to spell out how they are spending the money, but not for sums under £2,000. The certification officer will continue to be able to enforce remaining annual return requirements—
Lord Leigh of Hurley (Con)
I am sure the Minister would not like to have on record something that does not seem to be correct. I think she means that amounts under £2,000 need not be disclosed.
Baroness Jones of Whitchurch (Lab)
That is what I said.
We are simply returning to the situation as it was pre-2016. I would add that the unions are already specifically regulated in the requirement to have a separate fund for spending on political purposes that is subject to many rules. There is no such requirement on many other membership organisations.
I turn to the amendment tabled by my noble friend Lord Davies of Brixton relating to Clause 62 on equality representatives. Trade unions have long fought for equality. We recognise that equality reps have a key role to play in raising awareness and promoting equal rights for all members, as well as developing collective policies and practices that will enable organisations to realise all the benefits of being an equal opportunities employer. New Section 168B(2)(a) therefore provides for the broad purpose for equality representatives to take paid time off for carrying out duties
“for the purpose of promoting the value of equality in the workplace”.
In addition, new Section 168B(2)(c) makes provision for
“providing information, advice or support to qualifying members of the trade union in relation to matters relating to equality in the workplace”,
and new Section 168(2)(d) makes provision for
“consulting with the employer on matters relating to equality in the workplace”.
Finally, equality representatives may also be eligible for time off under Section 168 of the 1992 Act, which includes time off for
“negotiations with the employer related to or connected with matters falling within section 178 … in … which the trade union is recognised by the employer”.
We believe that these measures are broad enough to include a range of activities, which encompass collective bargaining, negotiating with employers and representing members. I ask the noble Lord, Lord Burns, to withdraw Amendment 147.
Lord Burns (CB)
My Lords, I am grateful to all who have contributed to the debate, particularly the noble Baroness, Lady Finn, and the noble Lord, Lord Sharpe of Epsom, who added their names to the amendment. I am also very grateful for the meetings I have had with the Minister. However, I am disappointed that I have failed to move her thinking in any serious way on this issue.
I welcome the support of the use of active consent in making contributions to political funds. The noble Baroness, Lady Fox, made a very good point that unions should not be frightened of giving members a clear choice. From those who have disagreed we have heard very little in the way of new arguments for ditching the 2016 compromise, other than a desire to persuade members to contribute more by relying on their inertia.
I enjoyed the history lesson from the noble Lord, Lord Barber. I agree entirely that it is quite astonishing; as I discovered at the time of the committee, political funds were illegal prior to 1909. I agree with the noble Lord, Lord Whitty, about the need for an agreement on party funding. The issue is: which is the right mechanism until then? Is it the 2016 compromise or the 1945 model? The noble Lord, Lord Monks, said he is worried that in 10 years’ time all members will be covered by the 2016 compromise. He will not be surprised that I do not think that this is necessarily a bad thing.
I remain bewildered by the desire to go ahead with the proposal in the Bill. I do not think the compromise should last for ever, but it is surely preferable to the 1945 version. I am very disappointed that there is no appetite for finding a way of dealing with this that gives some hope that it will stand the test of time. I have heard no recognition that views on the ethics of this type of choice have moved on since 1945 and that the arrival of a digital world increases the options for dealing with this in a different way. Instead, what we have is a desire to go back to the 1945 mechanism. Therefore, I would like to seek the opinion of the House.
Lord Sharpe of Epsom
Member's explanatory statement
This probing amendment would reinstate the 50% threshold requirement for industrial action to be voted on by a trade union and seeks to probe whether the Government perceives a risk to the democratic integrity of trade union ballots for industrial action as a result of the provisions to remove the 50% requirement.
Lord Sharpe of Epsom (Con)
My Lords, time and again we hear about workplace democracy from the Government Benches, and then they introduce this. So yes, I would like to test the opinion of the House.
Lord Sharpe of Epsom
The Deputy Speaker (Baroness Fookes) (Con)
My Lords, there being an equality of votes, in accordance with Standing Order 55, which provides that no proposal to amend a Bill in the form in which it is before the House shall be agreed to unless there is a majority in favour of such amendment, I declare the amendment disagreed to.
Lord Hendy
“Right to take industrial action(1) The Trade Union and Labour Relations (Consolidation) Act 1992 is amended as follows.(2) In section 220 (peaceful picketing)—(a) in subsection (1), for paragraphs (a) and (b) substitute “a place of work”;(b) omit subsections (2) to (4).(3) Omit section 224 (secondary action).(4) In section 244 (meaning of “trade dispute” in Part V)—(a) in subsection (1), for “a dispute between workers and their employer which relates wholly or mainly to” substitute “a dispute between workers and one or more employers connected with”; (b) in subsection (5), for “a worker employed by that employer” substitute “a worker employed by an employer”.” Member's explanatory statement
These amendments would remove the provisions (in sections 224 and 244) that render unlawful all forms of ‘secondary’ industrial action including the rights of pickets to picket places of work other than their own.
Lord Hendy (Lab)
My Lords, this amendment is a reproduction of the amendment on secondary action that I moved in Committee. Of course, your Lordships are far too polite to give expression to the collective groan that would otherwise emanate from all sides of the House.
I move the amendment again for two reasons—first, because the issue raises important factors of which I shall remind your Lordships briefly in a moment and, secondly, because support for it from various unions and resistance to it by the Government in Committee, and, I surmise, today on Report, give the lie to the repeated allegation that this Government are a puppet manipulated by the trade unions.
The amendment contains six measures aimed at restoring statutory protection for solidarity action, which subsisted between 1906 and 1984. As before, I am grateful for the support of ASLEF, the Bakers Food and Allied Workers Union, the BMA, the Fire Brigades Union, the RMT, the University and College Union and Unite.
Your Lordships will be pleased to hear that I shall not rehearse the arguments that I made in Committee, save to remind the House of two. First, solidarity action is an inherent aspect of freedom of association, which is the jurisprudential and international underpinning of trade union freedom and, at a more mundane level, the very essence of trade unionism. Solidarity between workers is not confined to the happenstance of employer identity, especially in the light of the fragmentation of enterprises in recent years.
Secondly, the issue is one of the rule of law. Lord Bingham’s eighth principle requires compliance with international treaty obligations ratified by each state. Those obligations are elaborated by the supervisory bodies established by the relevant treaty to which the state adheres. Their decisions are as much part of international law as is the treaty that authorised them. The right to strike is guaranteed by ILO Convention 87 and Article 6.4 of the European Social Charter of 1961. The decisions of the supervisory bodies of each hold that a prohibition on secondary action by a ratifying state violates these respective provisions. Of course, the United Kingdom has ratified both ILO Convention 87 and, specifically, Article 6.4 of the European Social Charter of 1961. The UK is also represented on both the ILO supervisory committees, the Committee of Experts and the Committee on Freedom of Association. From time to time, it has appointed a representative to the European Committee of Social Rights.
Lord Jackson of Peterborough (Con)
My Lords, I oppose the amendment in the name of the noble Lord, Lord Hendy. In doing so, I accept that he is very sincere in the arguments that he makes. I would not necessarily wish to dispute his interpretation of ILO regulations or policies, but we are nevertheless being asked to accept the central premise of secondary picketing. Although I agree with the noble Lord—any reasonable person would—that the P&O dispute was an egregious example of malfeasance and inappropriate behaviour by the management, it should not be the basis of industrial policy and legislation that governs employment. On that basis, and with all due respect, I do not think that the noble Lord’s argument is very compelling. It is always bad law to work on the basis of unique circumstances, situations and anecdotes, notwithstanding the fact that we disagree with how P&O Ferries handled that situation, which was pretty lamentable.
That said, in the situation that we now have in the economy, where we have pressure on employment, rising inflation, difficulties in recruitment and ossified GDP growth, and where we are not achieving growth levels that we need, the last thing we need is to make the employment market more disputatious and more litigious. That is what this amendment would do, frankly. If one reads it carefully, the term “connected with” in proposed new subsection 4(a) would probably do a lot of heavy lifting in the future and no doubt be the subject of quite a bit of legal action, one would assume, were it to be incorporated into the Bill. In addition, the change in proposed new subsection 4(b) from employed by “that employer” to by “an employer”—that is, all employers—gives carte blanche, frankly, for going back to the bad old days of the 1970s when we saw behaviour that caused huge disputes and very significant dislocation between the workforce and employers across a wide range of industries.
As others touched on in Committee, and notwithstanding what the noble Lord, Lord Hendy, said about the ILO, this is almost from a different era. We are no longer in the era, or we are less so than we were, of heavily mechanised, heavily unionised manufacturing, where that central argument for having collective action between different groups of workers at different locations—I could mention Saltley coke works and Orgreave, which is very topical—was a pertinent issue. We are no longer in that situation, because of technical change, communication change and the way that people work now. Many more people work from home and many more work on a self-employed basis. They are not accessing unions as members and it is not necessary for them to have that physical collective action.
There are, very briefly, other big philosophical and ideological reasons why it would be bad news were this amendment to be appended to the Bill. There would be a disproportionate impact of secondary picketing, which would undermine the confidence of employers, customers and suppliers in businesses that are not directly involved in the dispute. It would create economic damage that extends far beyond the scope of the actual workforce disagreement. It would unfairly target neutral parties. Secondary picketing affects businesses and workers in the supply chain who have no direct involvement in the original dispute. These neutral employers face disruption to their operations, despite having no control over, or responsibility for resolving, the underlying conflict. There would obviously be a multiplier effect in the economy of such disruption. There are also legal and fairness arguments and contractual rights. Secondary picketing can interfere with existing contractual relationships between neutral businesses and their customers, suppliers or employees, which undermines the security of commercial contracts and business relationships.
There is also the right to work. Workers at secondary sites who are not party to the original dispute have their own right to work without interference; secondary picketing would, of course, impinge on that right. Secondary picketing can effectively coerce those workers into supporting a cause that they may not agree with or have a stake in. In terms of property rights, secondary picketing often takes place on or near the property of businesses uninvolved in the dispute, potentially interfering with property owners’ rights to conduct their business freely.
The rule of law is important as well. There is a reason why there was consensus among the voting public at the 1979 election and onwards, with the continuing legislation brought forward by the Conservative Government, that secondary picketing was essentially retrograde, a bad thing and not good for jobs, prosperity and business.
There is a final point to be made about democratic legitimacy. Secondary picketing can give unions power to disrupt parts of the economy where they lack a democratic mandate from the affected workers, as those workers have not chosen to join the industrial action. The point is that if you wish to go on strike, having gone through the democratic processes of a union workplace ballot at your place of work, that must be respected and it must be proper and within the rule of law. However, imposing that particular dispute on other people through secondary picketing undermines democratic legitimacy.
I say finally that the Blair Government were not perfect, but they looked at this situation, as did the Brown Government, when Labour was in power from 1997 to 2010 and did not essentially resile from a settled position and a consensus on secondary picketing. For that reason, notwithstanding that I respect the great expertise of the noble Lord, Lord Hendy, I think that this is an unfortunate amendment and I oppose it.
Baroness O’Grady of Upper Holloway (Lab)
My Lords, I shall speak briefly to Amendment 150 in the name of my noble friend Lord Hendy, because I think that it is worth taking just a moment to consider the impact of the reduction in union bargaining power that we have seen on ordinary working people in this country. That will not take long, because it is plain to see, in stagnating living standards and the drag on fair growth, but it is also worth considering how the position of the party opposite on industrial action has evolved over time.
In April 1980, the then Secretary of State for Employment, Jim Prior, introduced an Employment Bill which restricted secondary action, but he certainly did not advocate that it should be banned altogether. The then Conservative Government’s position was that secondary action should in fact remain lawful if it related to a first customer and/or supplier that was of direct importance to the original dispute. Jim Prior said that
“the only other position that we could take would be to say that there will be no immunity for anything other than primary action. I do not believe … that that is either a practical or a reasonable position to take”.
He also said that, by protecting the right to take secondary action in relation to a customer or supplier,
“We are seeking to reach a position which we believe is fair and which recognises the traditional rights of the trade union movement”.—[Official Report, Commons, 17/4/1980; col. 1490.]
Back then, a Conservative Minister could acknowledge that the relationship between an employer, on one hand, and workers and their unions, on the other, is an inherently unequal one. But, of course, Jim Prior did not last long in that role and, under successive Conservative Governments, the inequality of power between workers and employers was deliberately and repeatedly reinforced.
Secondary action, or solidarity action as it is commonly called, was effectively outlawed in 1990, but here is the problem that I invite noble Lords to reflect on when considering the arguments of my noble friend Lord Hendy. Business was handed a unilateral power to define what secondary action is and, unfortunately, that is an invitation to an abuse of power. This is not an academic point. It was only after a six-week strike in 1984 that Ford sewing machinists finally secured full equal pay, but the victory was short-lived. Ultimately, the company took the decision to outsource those jobs and so avoid any need for pay parity, secure in the knowledge that solidarity action from workers in the customer company would become unlawful. Today, some companies continue to use long supply chains and complex outsourcing arrangements to effectively balkanise workers’ bargaining power. For example, take a company that decides to boost profit margins by targeting one part of the work- force for wage cuts. To prevent fellow workers from participating in industrial action to resist those pay cuts, a company can simply divide itself in two. To paraphrase Jim Prior, is that fair?
Lord Goddard of Stockport (LD)
My Lords, I will be very brief. Amendment 154 would remove another huge chunk from the legislation and, for the arguments that I rehearsed in the previous group, we will not support any move to force a vote on this occasion.
Lord Hunt of Wirral (Con)
My Lords, I listened carefully to the noble Lord, Lord Hendy, and the noble Baroness, Lady O’Grady of Upper Holloway, but I think that the argument fell rightly to my noble friend Lord Jackson of Peterborough, because he explained why we could not possibly accept this amendment. Therefore, I rise briefly to speak to Amendments 150B, 151 and 152.
With this Bill, the Government have chosen to make it easier to strike, lowering thresholds, relaxing long-standing restraints on picketing and removing vital safeguards. It is inevitable then that businesses, especially small ones, will find themselves bearing even greater burdens as a result of what is anticipated will be a new wave of industrial action. Amendment 150B would give employers a narrow and reasonable defence: where a decision taken during or immediately after lawful industrial action was strictly necessary to keep the business afloat, it should not be automatically treated as unlawful detriment. Without this amendment, we risk a situation where businesses face paralysis, exposed to litigation on one side and operational collapse on the other.
I believe that Amendment 151 is essential. It makes it clear that intimidation, harassment, damage to property and other coercive actions dressed up as industrial activity will not be protected under the law. Workers have the right to strike, yes, but they do not have the right to bully, vandalise or threaten.
To turn to Amendment 152, the Government may now claim that the Strikes (Minimum Service Levels) Act has proved ineffective, but we do not agree, not because we are ideologically wedded to it, but because it is simply far too early to make such a sweeping judgment. The Act has barely had time to be tested properly. Therefore, if the Government abandon the principle of minimum service, we look forward to hearing the Minister explain what the Government stand for instead.
Lord in Waiting/Government Whip (Lord Leong) (Lab)
My Lords, I am grateful to the noble Lord, Lord Jackson of Peterborough, and my noble friend Lady O’Grady of Upper Holloway, for contributing to this debate, and to the noble Lord, Lord Goddard, for setting out the Lib Dems’ position. I will now speak to Amendment 150, tabled by my noble friend Lord Hendy, and Amendments 150AA, 150B, 151 and 152 in the name of the noble Lord, Lord Sharpe of Epsom.
On Amendment 150, we are clear that industrial action should take place only where there is a dispute between a group of workers and their direct employer and we will not change this position. Secondary or solidarity action has been prohibited for several decades and the Government will not change this. Permitting secondary action would enable parties with no direct stake in a dispute to take co-ordinated action, increasing the risk of disruption to employers and the public, and would allow industrial disputes to escalate beyond the original context and across different employers. The Government are clear that we are compliant with our international obligations under ILO Convention 87, Article 11 of the ECHR and Article 6 of the European Social Charter, all of which protect the right to strike but also permit restrictions on industrial action necessary in a democratic society.
As noted by the European Court of Human Rights in the RMT case in 2014, there is a democratic consensus in the UK in support of the prohibition of secondary action and a broad acceptance of the public interest reasons for it, spanning the gamut of political opinion.
Furthermore, the UK is not an outlier. Similar countries such as Australia, Canada, Austria, France and the USA also prohibit or do not protect secondary action. The UK’s model reflects our unique industrial relations framework and economic context, and protects the ability to strike, while also protecting the rights of others. The Government have no intention of changing this.
On Amendment 150AA, 150B and 151, in the name of the noble Lord, Lord Sharpe of Epsom, Clause 73 of the Bill is required because the Supreme Court ruled in April 2024 that Section 146 of the 1992 Act is incompatible with Article 11 of the European Convention on Human Rights. That is because it fails to provide any protection against detriments—that is, sanctions short of dismissal—intended to deter trade union members from taking part in lawful strike action organised by their union or penalise them for doing so. I have no doubt that many Members of your Lordships’ House agree that the UK cannot continue to be in breach of our international obligations. The Bill will correct this by inserting new Section 236A into the 1992 Act, to provide that:
“A worker has the right not to be subjected … to detriment of a prescribed description by any act, or any deliberate failure to act, by the worker’s employer, if the act or failure takes place for the sole or main purpose of preventing or deterring the worker from taking protected industrial action, or penalising the worker for doing so”.
The prescribed detriments will be set out in secondary legislation following a consultation.
These amendments seek to prejudge a full and open consultation on this issue by setting out the circumstances in which the detriment protection—whatever the prescribed detriments may ultimately be—will not apply. Indeed, as part of the consultation, we look forward to hearing the perspective of employers on why they may consider detriments could be appropriate in certain circumstances.
I must also add that, importantly, the protection from prescribed detriment applies only where the sole or main purpose of subjecting the worker to detriment is to prevent, deter or penalise the worker from taking protected industrial action. For example, if a worker is subject to a detriment solely or mainly because they have damaged property, this protection will not apply. Moreover, the criminal law still applies to pickets and others taking part in industrial action, just as it applies to everyone else.
Finally, on Amendment 152, also in the name of the noble Lord, Lord Sharpe of Epsom, Clause 75 seeks to repeal the Strikes (Minimum Service Levels) Act 2023. The repeal of the strikes Act is a manifesto commitment that this Government have a mandate to deliver. Minimum service levels unduly restrict the right to withdraw labour and undermine good industrial relations, and our plan to make work pay pledged to repeal the Act. No work notice has ever been issued by an employer to seek to meet a minimum service level during strike action, and the legislation has never prevented a single day of strike action. Evidence suggests that this is due to employer concerns around worsening industrial relations and the complexity of implementing a minimum service level under the legislation. This demonstrates the futility of that Act and why we intend to repeal it upon Royal Assent.
We believe that negotiation and co-operation are better ways to ensure essential services continue during any industrial action, while respecting workers’ rights. Evidence given at the time the strikes Act was being introduced, including from employers, was that existing voluntary arrangements worked and ensured that vital services were able to continue during periods of industrial action. We are simply returning to this situation. We want to reset the relationship with both employers and trade unions to resolve disputes through meaningful negotiations. Repealing the rights of the strikes Act will help us to achieve that. I therefore respectfully ask my noble friend Lord Hendy to withdraw Amendment 150.
Lord Hendy (Lab)
My Lords, I am very grateful to all noble Lords who spoke in the debate on my amendment. I have a couple of words by way of reply.
I point out to the noble Lord, Lord Jackson, that the P&O Ferries scandal was not the basis of the argument that I advanced to the House but simply an egregious example of the absence of the right to take secondary action. Noble Lords will recall that that case involved some 800 seafarers who were sacked instantaneously and replaced immediately with agency crews recruited in third-world countries. In doing so, P&O Ferries knowingly and intentionally broke the law. It could do so because it knew exactly how much compensation it was liable for, and it paid it. The unions, on the other hand, were unable to call on fellow workers in the Port of Dover and other cross-channel ports to support them in an industrial dispute to reverse that decision. The seafarers themselves, of course, were on the stones; they were unemployed. A strike by the direct workforce would have been completely pointless. I mentioned it because that is the last example of the ILO commenting on the UK ban on secondary action. It said that the Government and social partners should sit down together and endeavour to negotiate some form of permissible secondary action. The ILO has been consistent on the position since 1989, repeatedly saying that the 1990 law to which my noble friend Lady O’Grady referred was incompatible with Convention 87.
The noble Lord, Lord Jackson, pointed out various circumstances, which I will not debate with him now, that would make the return of secondary action in this country unacceptable. The point is that special circumstances are not a legitimate justification for a state not to comply with its international obligations. That point was made clear by the noble and learned Lord the Attorney-General in a speech that he made about a month ago, but it is a fundamental principle of international law.
Finally, I say to the noble Lord, Lord Jackson, who commented on the suggestion that the phrase “connected with” ought to be brought back, that phrase is the one that was deployed in the original drafting of the Trade Disputes Act 1906.
I thank my noble friend Lady O’Grady for her support and for reminding the House of the fragmentation in employing enterprises, often precisely to achieve and exploit the bar on secondary action, to weaken workers. I thank the noble Lords, Lord Goddard and Lord Hunt, for their comments.
To the Minister, my noble friend Lord Leong, I make three quick points. First, I am afraid I do not agree with his comparative law analysis. I have done some work on this over the years, and it is not the case that the countries that he mentioned bar secondary action—at least, not all of them do, although the United States does. Secondly, I accept, as I did in Committee, that we are not in breach of Article 11 of the European convention, but I simply cannot see how it can be argued that we are not in violation of ILO Convention 87 and the European Social Charter’s Article 6.4. The supervisory bodies have said so over and over again. Thirdly, of course I recognise the Government’s position, and my noble friend will not be surprised to hear that I do not intend to test the opinion of the House. I respectfully ask to withdraw my amendment.
Lord Leigh of Hurley
Lord Leigh of Hurley (Con)
My Lords, we have debated this at length. I listened very carefully to what the Minister said, but I cannot see a reason why payments should be hidden from members of a union.
In wishing to test opinion of the House, I also declare that I have never received any financial remuneration from the Conservative Party: neither have I received any union payment or indeed a union pension. I wish to test the opinion of the House.
Armed Forces Commissioner Bill
Wednesday 23rd July 2025
(3 days, 12 hours ago)
Lords ChamberArmed Forces Commissioner Bill 2024-26 View all Armed Forces Commissioner Bill 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 115-I Motion for Consideration of Commons Reason - (22 Jul 2025)
Lord Coaker
That this House do not insist on its disagreement with the Commons in their Amendment 2A in lieu of Lords Amendments 2 and 3, and do not insist on its Amendments 2B and 2C in lieu of that amendment, to which the Commons have disagreed for their Reason 2D.
The Minister of State, Ministry of Defence (Lord Coaker) (Lab)
My Lords, with permission, I will say something that I should have said at the end of the defence review debate. I pay tribute to the right reverend Prelate the Bishop of Bristol, who, as we know, has now left your Lordships’ House. We wish her well in the future and have valued her contributions over many years.
I also note, as I know the noble Baroness opposite and the Liberal Front Bench will too, that today is our last opportunity here to mark VJ Day, which will be on 15 August. We know that the nation will commemorate it in the appropriate way, with respect to all of that.
I am delighted that the Armed Forces Commissioner Bill has returned to your Lordships’ Chamber ahead of the Summer Recess. I thank all Members of this House for their expertise and insight and the time they have generously given in critiquing this landmark Bill.
During Commons consideration of Lords amendments on 2 July, the amendments on whistleblowing tabled by the noble Baroness, Lady Goldie, were put to a vote and were disagreed to. The Government’s proposed Amendment 2A was reinserted. While we have debated the wording and legal functioning of the amendments in question at length, it has become clear that both Houses agree on the importance of a robust and transparent process for service personnel to raise their concerns and blow the whistle. We want our Armed Forces and their families to have confidence and trust in the system and to feel empowered and protected to come forward with their concerns.
Baroness Goldie (Con)
My Lords, it has been a pleasure to participate in our debates on this Bill. I echo and endorse the sentiments articulated by the Minister at the start of his speech.
These Benches made clear from the outset that we supported the Bill, and an independent presence in the form of the new commissioner is an important and welcome development. It was that very independence which suggested to me that the commissioner would be well placed to look at whistleblowing complaints. Those who have any knowledge of the Armed Forces know that the very environment of discipline and command structure that produces such exemplary servicemen and servicewomen is also a very closed environment, which can make it difficult to seek help when something goes wrong.
Sadly, we know all too well that things can go wrong. That may be in the life of an individual, or there may be a more systemic wrong, but the burning question is how redress is obtained. That is why it seemed that we needed an avenue over and above the existing procedures, and why allowing the Armed Forces commissioner to investigate whistleblowing complaints was the particular granite boulder at which I have been chipping away,
I have been greatly assisted by the expertise of the noble Baroness, Lady Kramer, who has been so supportive of my efforts, and so helpful to the House in explaining the particular virtues of whistleblowing. I was immensely encouraged when the House showed such powerful support for our efforts in amending the Bill as we suggested.
Although the Bill now returns to us with the amendment stripped out, and the granite boulder now bears a new inscription from the Government, entitled, “We are prepared to carry out a review of whistleblowing in defence”, I am very pleased at that progress. As the Minister indicated, he and his colleague in the other place, the Minister for the Armed Forces, wrote to me to confirm that this was the Government’s proposal. I now want to thank the Minister—these are not easy, cosmetic words from the Dispatch Box; I absolutely mean it—because the way in which the Minister and his colleague, Mr Luke Pollard, have engaged, has been immensely helpful to our efforts to try to improve the situation for our Armed Forces personnel. Above all else, I want to thank them both for listening.
I have accepted the offer in good faith, and I have agreed that the Bill should now pass so that progress can be made with this important appointment. But, before I lay down my masonry chisel, there are a few further inscriptions I wish to add to the boulder so that we all know where we are. The Minister was kind enough to reference a few of these, extracted from the letter which I wrote to him.
As I have previously argued, more than one route for making a complaint is not a weakness; anything which facilitates accessibility by the complainer is a strength. However, the specific points I wish to raise in relation to the role of the review are that it can be a stocktake of the current procedures and can assess whether these need to be simplified, and, if so, how that can be done. The review should also recognise the key distinction between simply raising a complaint and blowing the whistle on serious wrongdoing. As the Minister has kindly indicated, the review should also take place in close consultation with the Armed Forces commissioner whenever he or she is appointed.
It is very welcome that Minister Al Carns has been proposed to lead the review; it is very important to have a person of his stature conducting it. If the review is to gain the trust of service personnel, we must have someone who has the respect of the forces and experience of life in the services leading it.
I have a small number of specific questions about the review. How will the consultation take place, and what are the timescales? In particular, how will the views of service personnel be sought, and will the interim and final findings be published and laid before Parliament to enable full scrutiny of the findings? In the letter there is a reference to
“consistency between the application and accessibility of military and civilian whistleblowing procedures”.
I was not entirely clear what that meant, but I am sure the Minister will clarify in his closing remarks.
Further details of the review are to be published via a Written Ministerial Statement in due course. That review will produce initial findings by the end of the year and a final report and recommendations in spring 2026. Can the Minister say when the Written Ministerial Statement will be published, approximately, and will it contain the terms of reference for the review?
In conclusion, I look forward to the Minister’s response, I reaffirm my thanks for his constructive engagement and I hope that I can play a helpful role when the consultation process commences. Our common aim—of the Minister, myself and our colleagues across the Chamber—is to improve life for our service personnel. I support the government Motion and I support the passing of the Bill.
Baroness Kramer (LD)
My Lords, I will be exceedingly brief, but first I join with the Minister in stressing the importance of remembering VJ Day. We on these Benches share his view.
I congratulate both the noble Baroness, Lady Goldie, and the Minister, the noble Lord, Lord Coaker, and the team that he stands with, including Luke Pollard, who I had the privilege to meet with. I just say to both of them that the outcome that has emerged now at the end of this process is, frankly, better than anything I had ever hoped for. What we have been promised by the Minister—because of the persistence of the noble Baroness, Lady Goldie, in raising and pushing the issue, as well as the willingness of the Government to listen—is this much broader review of whistleblowing in the defence sector, led by the Minister for Veterans and People. That is exceedingly important, because it underscores a changing cultural attitude in the whole defence sector and in the Government, which means that in the future we can look forward to much greater transparency and much more effective paths for whistle- blowing right across the piece.
Once again, I add my congratulations to those who have been expressed earlier. We also will no longer attempt in any way to impede the passage of this legislation. Its content is very positive and we supported that underlying principle. It has been a privilege to be part of this discussion and this process. I accept on behalf of my noble friend Lady Smith the opportunity to meet in the future, and we will put various thoughts in writing in order to assist the process.
Viscount Stansgate (Lab)
My Lords, I will be so brief that they will not have enough time to put my name on the annunciator.
I welcome the agreement that has been reached and I think that this is a good example of the House improving what is an important Bill, which I hope will succeed in every respect. I pay tribute to all noble Lords, because I have been involved in that sense with the Bill since the beginning—I have an interest, which I have declared previously. It has been a very useful, good example of the House in action, and I particularly congratulate my noble friend the Minister, who has behaved in an exemplary way throughout the entire process. I am very pleased to see that the result that we have agreed will pass through and that the whistleblowing defence review will take place.
I have failed: they have put my name on the annunciator.
Lord Beamish (Lab)
My Lords, I join the noble Viscount, Lord Stansgate, in welcoming not only the review into whistleblowing but the movement on this Bill, because it is an important one.
I just want to ask a few questions about the whistleblowing review. I do not want to be cynical, but we know that, in good old “Yes Minister” parleys, if you want to kick something into the long grass, you set up a review. So it is going to be important that, once the review is published, the terms of reference are correct and there is an indication of a commitment of the department to implementing the review—I think the Minister suggested the Armed Forces Act coming up, which would be a good way of doing it.
As the noble Baroness, Lady Goldie, said, this is going to be a major issue for defence. Rightly, defence needs to be secret at times, and it is also important that the chain of command is in place. But I see this not as a threat to defence but as an opportunity for defence, because some of the best companies and others that have adopted open access and whistleblowing methods have actually added to their capabilities by learning the lessons.
If we are going to do this, the terms of reference will be very important. Trying to get the cultural change to which the noble Baroness, Lady Goldie, referred is going to be important. I do not think the problem is necessarily in the Armed Forces. Part of it is going to be within the MoD itself, and I think we have seen that in the fiasco of the last few weeks over the Afghan data leak. From my experience of being a Minister there, I know the stock thing is to protect the organisation. We need to try to turn this on its head a bit and say, “Look, if we do this properly, we can have a situation whereby if someone comes forward with a whistleblowing issue, don’t see it as necessarily an attack straightaway on the department or the institution. It should be seen as an opportunity to learn from that”. The important thing in any whistleblowing change is that there has also to be a commitment to implement what is found, because so often, these things happen and then nothing changes. There will be a huge cultural issue within the MoD. That would not just be welcomed by the general public and the Armed Forces but lead to efficiencies and learning lessons. It should not be seen as a threat or “Somehow, we have to have a knee-jerk reaction, and the important thing is to protect the department at all costs”.
Lord Coaker (Lab)
My Lords, I thank everyone who has contributed to this short debate at the end of our discussions on the Bill. I want to comment briefly on a couple of the points that were made. On the point from the noble Baroness, Lady Goldie, about the Written Ministerial Statement, we expect to do that in the autumn, when the terms of reference are concluded. We intend to consult on all that. Some of the detail that she asked for will be in the process of setting up the review, so we will need to come back to her and others on that.
We will seek the views of service personnel in a variety of ways, but it will be essential that we do so no matter where in the world they are. It will be important to seek them out, but, above all, to give them the confidence to come forward and be part of that. We will closely communicate with service personnel. There is a new defence voices panel, as well as existing Armed Forces networks, so we need to use some of the new procedures that have been set up. One reason that Minister Carns is good is his recent ex-military background. I think that gives him an advantage in seeking some of those views and giving people the confidence to come forward.
The findings of the review will be published and laid before Parliament—the noble Baroness asked about that. We intend to do that as quickly as possible. Therefore, any interim findings may not be made with the full picture of whistleblowing, but when we reach the conclusions and the review is finalised, yes, of course we will publish it and it will be laid before Parliament.
I thank the noble Baroness, Lady Kramer, for her comments and support. Her contributions have been very worth while and helpful to all of us. I am glad that my noble friend Lord Stansgate got his name on the annunciator, but he has been here a lot through our different debates, and I have been very pleased about the support that he has given to us as well. I also thank my noble friend Lord Beamish. He is absolutely right about the need for cultural change and that being crucial within the Ministry of Defence. It is very important. We made the commitment—in fact, I think, in response to one of his amendments in Committee—that we will of course involve both the Commons Defence Committee and the International Relations and Defence Committee of your Lordships’ House. My noble friend Lord Beamish was also right to say that this should be seen as an opportunity and not as a threat.
As I said, we will need to firm up some of the details, and we will do that in discussion and negotiation with others across the House. I am pleased that the Bill has now come to the point where we are in a position to pass it. It is a significant reform and will make a real difference. I just say in closing that we do not intend to use this review, as Governments sometimes do with reviews, to kick something into the long grass and as a way of securing support. This is a very real review. It is too important an issue for that to happen. I am sure that many in your Lordships’ House would hold me to account were that to be the case. With that, I commend the Motion.
Financial Services Reform
(3 days, 12 hours ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
Baroness Neville-Rolfe (Con)
My Lords, the proposed changes outlined by the Government in what they are calling their Leeds reforms are broadly to be welcomed. It is essential to get the balance right between protection and risk. Like the Government, we accept the analysis that while financial prudence is important, we have moved too far towards protection and away from delivering economic growth and competitiveness. It is right that we take steps to facilitate our financial services sector, which contributes 9% of economic output. However, I have to take some issue with the tone that the Government have adopted when introducing these proposals. The Government have spoken of our country “thriving” and of our nation “benefiting”. The statistics tell a different story.
The ONS reported last week that the rate of UK unemployment increased to 4.7% in the three months to May, up from 4.6%, and, meanwhile, average earnings growth has slowed to 5% in the period to May, its lowest level for almost three years. GDP contracted 0.1% in May and 0.3% in April. Inflation has risen beyond all expectations to 3.6%. Industry experts have said that the UK’s economic situation is simply staggering. They have said that the Government’s management of economy has been dire and that the Chancellor has to seriously rethink her policies. Perhaps most worrying of all, yesterday we saw the second-highest June borrowing figures since records began, with spending exceeding income by over £20 billion and debt interest now at 96% of GDP.
I turn to the reforms. The hard-hitting recent report by the Financial Services Regulation Committee, chaired by my noble friend Lord Forsyth of Drumlean, outlined how the Government could support the FCA and the PRA in meeting their vital secondary objective of supporting the UK’s international competitiveness and medium to long-term growth. I am pleased that the Government have bowed to the spirit of this cross-party report and implemented several important ideas, such as reform of the Financial Ombudsman Service, improvements in product authorisation rates—including those for high-growth fintechs—and in the senior managers and certification regime.
These approvals are all too slow in my experience as a non-executive director. Moreover, as the report makes clear, the truth is that firms are inundated with information requests from the FCA and the PRA and the burden of compliance in the UK is perceived to be disproportionately high. So these are welcome steps, and we agree that things must change. However, the Minister will not be surprised to know that my first question is: how quickly will these changes take place?
I cannot hope to cover all that was announced last week in the other place and at Mansion House. We need a proper debate for that. However, I would like to tease out some detail. First, we were told that the Government were considering reforming the individual savings account system. They have already said that they will allow long-term asset funds to be held in stocks and shares ISAs next year. Is this only one of the changes under review? How will the Government support funds to invest in such projects? How will the relevant information be communicated to retail investors? Can the Minister confirm what the Government’s plans are for cash ISAs? Without clarity on this question, the Government risk undermining their own efforts to promote home ownership and hitting customers who rely on cash ISAs for their investments.
Secondly, on financial education, both the Government and the Opposition are clear that we need to stimulate investment and support our financial services sector. These reforms take us some way, but there remains the question of how we can create a culture of investment in our country. We have seen an uptick in the rates of retail investment, stimulated in part by online trading platforms. But for many people, the idea of investing their money is concerning and the language technical, dense and confusing. We need a society in which people understand the possibilities and risks better and actively invest their money across a wider range of products, not letting it sit largely dormant.
Education needs to start in schools, where children can be taught about markets, savings, investment, even pensions, and how to make best use of their money. The report for the Financial Services Regulation Committee, which I mentioned earlier, highlights the poor financial literacy that is prevalent in the UK. Can the Minister outline the steps that the Government are taking to support people across the UK to become retail investors and how they are educating our citizens so that they are willing and able to take responsible investment decisions? Above all, does the Minister agree that this education has to start in school lives? What steps will he take with colleagues in the Department for Education to do this more effectively?
Thirdly and finally, we need more clarity from the Government on pensions. Since last week a revival of the Pensions Commission has been announced; it will involve the noble Baroness, Lady Drake, whose expertise on pensions is so much appreciated here. However, I have a concern that this further review risks delaying action and creating uncertainty for businesses and savers. There are serious and urgent questions around pensions adequacy, as the OBR forcibly reminded us on 8 July. What will the Government do, and do soon, to capture those who do not benefit from auto-enrolment and/or save too little for their retirement? What is the timing of the Government’s plans to encourage pension funds to use more of their capital to support growth and infrastructure at home? The clock is ticking.
To sum up, the financial services reforms are in the right direction, but the UK’s financial position is troubling and may be deteriorating. I am sure that we will return to these concerns all too soon.
Baroness Kramer (LD)
My Lords, I spent two years on the Parliamentary Commission on Banking Standards following the 2008 crash. We were all aware that the financial sector and the City would, over time, work hard to erode the protections that we recommended to prevent a repeat of financial instability, casino-type risk-taking and consumer abuse. The financial sector plays a long game. Inch by inch the erosion is well under way, while the Government are seen as eager for nominal growth and too eager to resist that erosion.
Let me give a short list on the erosion: the competitiveness and growth objective for regulators; the changing to matching adjustment in Solvency UK, increasing the illiquidity of the insurance sector; the removal of the cap on bankers’ bonuses; the permanent permission for pension funds to transact derivatives without using central counterparties and holding margin collateral; the watering down of the senior managers regime, which is key to accountability; the weakening of the Financial Ombudsman; the pressure on pension funds to invest in high-risk and illiquid assets; and the weakening of bank ring-fencing, which was absolutely at the heart of the commission’s recommendations, removing that incentive to take free deposits and roll them in the casino. That list is just what springs immediately to mind. It is far from complete.
Regulation cannot be written in stone, and adjustment and streamlining are always necessary, but will the Government now issue a compendium of all the changes, along with a proper assessment of the cumulative shift in risk? I mean changes by not just the Government but the various regulators. Parliament will then be in a position to make a proper judgment.
The financial sector has approved this move back towards what it sees as a return to the light-touch regime, a regime that made it very rich. But remember that when the inevitable crash came, leading financiers were pretty much untouched. Ordinary people bore the brunt. It is crucial that this is not repeated.
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
My Lords, I am very grateful to the noble Baronesses, Lady Neville-Rolfe and Lady Kramer, for their questions and comments. I will do my best to address all the points they raised.
The noble Baroness, Lady Neville-Rolfe, spoke about the economy in general. She will be aware that we have had to take very difficult decisions on the economy to generate the stability that we all want to see—not least to restore stability to the public finances in the Budget last October. The stability that we have restored is already delivering. We have seen four cuts in interest rates by the Bank of England since the general election, reducing the cost of mortgages and business lending. Real wages have risen more in the first 10 months of this Labour Government than in the first 10 years of the previous Conservative Government. Investment is returning to our economy. At the spending review, the Chancellor set out £120 billion of additional public investment. The IMF has long identified the insufficient amount of investment in our public sector as a barrier to growth. The UK has attracted £120 billion of private sector investment in just the last 12 months.
The noble Baroness mentioned recent growth figures. Those growth figures were disappointing, but we are determined to go ever further and faster to deliver on our growth promise. That is why we are doing all the reforms that we have embarked on—not least the spending review and increased investment. We have increased investment in better city region transport, have committed record funding for affordable homes and are backing major infrastructure projects such as Sizewell C. We are investing in the parts of the economy that genuinely will be growth generative.
The noble Baroness also talked about the importance of financial services to the economy. The financial services sector is critical to our growth ambitions for our country. It is one of the largest and most productive sectors in the UK, worth around 9% of total economic output, as she said, employing 1.2 million people in clusters right across the UK. London is the financial centre of the world, home to the deepest equity capital market in Europe and the third-biggest venture capital market globally. It is right that we support the sector as we have in the strategy that we have set out, to see the growth that we want to see and for that growth to feed through to the real economy.
I am grateful to the noble Baroness, Lady Neville-Rolfe, for welcoming what we have said about the rebalancing between risk, growth and competitiveness. The noble Baroness, Lady Kramer, struck a very different tone. I know that she has huge expertise in this. I do not for a second intend to in any way doubt her expertise. I know that she played a huge role post financial crisis in putting together much of the architecture that is in place. I disagree, though, with the way in which she characterised our reforms. She asked for a compendium of those reforms. The financial services growth and competitive strategy is the compendium of those reforms. I think that what have been called the Leeds reforms are the totality of the reforms that she identified.
We are not removing the regulatory architecture that was put in place and that she played a major role in after the global financial crisis. As the Chancellor has specifically said:
“The protections that were put in place … were the right thing to do, with better protections for consumers and more accountability injected into the system”.
The core elements of that—adherence to international standards, ensuring robust MREL, remaining committed to ring-fencing, which we do despite what the noble Baroness said, and the structure to the regulatory system—all remain in place. But we believe that the pendulum swung too far in the opposite direction. The balance of regulation has gone too far towards regulating for risk and not enough towards regulating for growth. Clearly, this is a highly competitive sector, and no other globally competitive financial services hub imposes such bureaucracy on its businesses. Neither should we if we want to be competitive.
So, absolutely, we are recalibrating. We are rebalancing the approach to risk so that it is more proportionate and so that, in the right places, consumers and industry can take informed risk and create the space for the innovation and growth in the sector that we want to see.
The noble Baroness, Lady Neville-Rolfe, mentioned the Financial Services Regulation Committee of this House and the fact that it identified many of the issues that have been addressed in this strategy. Obviously, I pay tribute to that committee and the work it has done. I look forward to debating its report in due course. That points to a degree of cross-party consensus in some of the challenges we face and want to address. She specifically mentioned financial education, for example, which was one of the key recommendations made in that report. I hope we can find consensus on the importance of that, if nothing else.
As the noble Baroness said, we need to build confidence for retail investment among the general public on a platform of greater education. As part of the Leeds reforms, we are looking to take forward a series of measures to give consumers the confidence to invest, so that they can grow their savings and access the long-term benefits that investing can bring.
There are three specific measures for that. The first is a new targeted support framework, enabling people to access the help they need to make the right financial decisions. The second is a cross-industry initiative to reframe how firms talk about investing, so that they talk about the growth benefits and not just the risk and warning people off. The third is an industry-led, multiyear advertising campaign to showcase some of the benefits of investing for the general public.
As the noble Baroness, Lady Neville-Rolfe, said, that of course has to come on the basis of greater financial education. We discussed this previously and I have looked into it. Financial education does form part of the school curriculum in all UK nations. In England, financial education forms a compulsory part of the curriculum for mathematics at key stages 1 to 4, and citizenship at key stages 3 and 4. Together, they cover personal budgeting, saving for the future, financial risk, managing credit and debt, and calculating interest. But the noble Baroness is quite right that of course we should go further. The Government have established an independent curriculum and assessment review covering ages five to 18 in England. The review is considering whether the curriculum provides sufficient coverage of key knowledge and skills, including financial education, to prepare young people for future life and to thrive in a fast-changing world. The review’s final report and recommendations will be published in the autumn with the Government’s response.
On that note, the noble Baroness also asked about the timescale for a lot of what we have announced. Many of the reviews we have announced as part of these reforms will report in the autumn. At that point, we will see a lot of the things she spoke about coming to fruition.
The noble Baroness asked about ISAs. The Government will continue to talk to industry and others about the options for ISA reform. We recognise the potential for ISA reform to improve returns for savers and access to capital for UK businesses. Although there are differing views out there among stakeholders, we are all united in wanting better outcomes for savers and the UK economy.
Finally, the noble Baroness, Lady Neville-Rolfe, asked about pensions and quite rightly paid tribute to my noble friend Lady Drake, as I do too. I cannot think of anyone better equipped to take part in that review. Many of the questions she asked will be answered in phase 2 of the pensions review, so I shall wait until that is in place before commenting on the points she raised.
Baroness Ludford (LD)
My Lords, I thank the Minister for the Statement. The Government want to reintroduce informed risk-taking into our financial services system to deliver prosperity for working people. As my noble friend Lady Kramer pointed out, the last time we had risk-taking in the financial services system in a context of global competitive deregulation, in 2008, it created a crisis that meant the taxes of working people bailed out the bankers. How confident are the Government that we are not going down that path again?
In that context, why is the Chancellor disagreeing with the Governor of the Bank of England, who said that
“we can’t compromise on … financial stability”
and, notably, failed to endorse the route the Chancellor is taking?
On what the Minister called “reforming the ISA system”, I certainly agree with the comments that have been made about the need for more financial education, and it may be that ISA reforms can be discussed. But I question the way in which the Chancellor went about this. She created a scare story about how cash ISAs were going to be abolished. That scare story has run for several months, which will surely discourage the normal punter who is not confident in retail investment from saving at all.
Should the Chancellor not sack the spad or speech-writer who is encouraging her to shoot from the hip, which she seems to have a bit of a tendency to do, and take the better route of launching a reasonable debate, instead of letting these issues float and scare people?
Lord Livermore (Lab)
I am grateful to the noble Baroness for her contribution. There was a lot there. There was a crumb of truth in the things she said, but I certainly do not accept the characterisation of any of the three points she made. She started by talking about risk-taking. Do we want informed consumers to be able to take risks in order to get better returns? Yes, we do. She talked about how just that alone would take us back to the situation at the time of the financial crisis. I have already set out that I fundamentally do not accept that point. We are not removing any of the regulatory architecture that was put in place after the global financial crisis and, as I have said, the Chancellor said very clearly:
“The protections that were put in place … were the right thing to do, with better protections for consumers and more accountability injected into the system”.
Does the noble Baroness think it is right that if a consumer has a large amount of cash sitting in their bank account, the banks that money is with cannot say to them that there might be better ways to invest their money? That is at the core of what she talked about. She started her remarks talking about better returns for consumers. That is exactly what we are talking about: getting better returns for consumers. That is why introducing a greater level of risk is important.
The noble Baroness talked about the Chancellor being at odds with the Governor of the Bank of England. Again, I do not think that is the case. I have read the comments. He is talking about the things that we are doing, so I do not think that that is true, and I do not think that they are at odds.
I think I have already addressed the question on ISA reforms. As I have said, the Government will continue to talk to industry and others about the options for ISA reforms. Again, we recognise the potential for ISA reforms to improve returns for savers and access to capital for UK businesses. At the end of the day, all these reforms are about getting better returns for savers—surely, we can all agree with that—and better returns for the UK economy and, again, I hope we can all agree with that.
Lord Sikka (Lab)
My Lords, history shows that infatuation with deregulation of the finance industry always ends up destabilising the economy. At the moment, shadow banks are bigger than retail banking and totally unregulated. Private equity is devouring care homes, water, veterinary services, town centres and companies all over the UK. Its gearing ratio is higher than that which brought down Lehman Brothers and Bear Stearns, but the Government have still not moved to look at that sector. Under the so-called effective or tighter regulatory regime that we have now, money laundering by HSBC was buried, and we are still waiting for a report on the 2003 HBOS fraud and no regulator even wants to look at it. It will not get any better under the Government’s proposals, because the post-2008 crash reforms are being repealed and the regulator’s consumer protection duties have been diluted. There will not be enough money to bail out banks, businesses, markets and households when the next crash inevitably comes. Effective risk management must consider the likelihood of what are often called black swan events. What assessment have the Government made of the probability of a financial crash?
Lord Livermore (Lab)
I am always grateful to hear from my noble friend on all these topics. I disagree with him, as always. He said that the 2008 reforms are being repealed. I cannot see anywhere in the Chancellor’s statement where that is the case. As I have said clearly and as the Chancellor has said clearly, the protections that were put in place were the right things to do with better protections for consumers and more accountability in the system. My noble friend said that there would not be enough money to bail out banks in a crisis. We have been clear that the minimum requirement for own funds and eligible liabilities regime plays a crucial role in maintaining financial stability and ensuring that taxpayers do not pick up the cost of bank failures. However, it is important that the regime is proportionate so that smaller banks can scale up, expand and support lending to UK households and businesses. As my noble friend will know, the Bank of England has announced the outcome of its MREL consultation.
The Earl of Effingham (Con)
My Lords, the Minister mentioned how interest rates have been cut, and other noble Lords on the Government Benches have mentioned the same thing. Does he agree that the Bank of England dictates monetary policy, not the Government, and that the reason why the Bank of England has been cutting interest rates is because of clear evidence of a slowing economy, not because the Government’s policy is working?
Lord Livermore (Lab)
As the noble Earl says, the Bank of England has operational independence to achieve the inflation target set by the Government. We absolutely support it in the work that it does to do that. However, it is absolutely the case that the Government’s fiscal policy has created the space for the Bank of England to cut interest rates. At the risk of repeating an old favourite of ours, if we still had a £22 billion black hole in the public finances, it would not have had the space to do that. It is obviously right that fiscal policy and monetary policy work together.
Lord Davies of Brixton (Lab)
I think it is worth reminding the House that I spent my entire working life in the financial services industry in one form or another, and I am afraid to say that my practical experience of the industry has made me a sceptic of much of the promotion provided by it telling us how it will do the economy a favour. Does my noble friend agree that there are potential downsides to the financialisation of the economy that seems to lie behind these proposals? We need to realise that there is a form of resource curse in overfinancialising the economy. There is also a dynamic within the industry driven in large part by the inevitable asymmetry of information. You can provide all the education and explanation that you wish, but there will still be this asymmetry of information leading to a succession of scandals. There is a dynamic in the industry—in personal pension scandals, endowment scandals and the Northern Rock scandal there was a dynamic that has to be recognised.
Finally, I am concerned that, in the Statement, the Government appear to be giving people financial advice. I am sure my noble friend will deny that that is what they are doing, but saying that the Government are going to get people better financial returns is a very dangerous path to go down. Does my noble friend the Minister accept that there is a need for robust safeguards for ordinary investors? I press him to accept that those appear to be contemplated by some of those commenting on these proposals. Significant weakening is a grave danger to the economy and individuals.
Lord Livermore (Lab)
I am grateful to my noble friend for his question, and I pay tribute to his experience in the industry that he outlined. I do not agree with his view of the industry. I am incredibly proud of the financial services sector in this country: it makes a massive contribution to our economy, and it is incredibly important that we enable it to grow and that that growth feeds through to the real economy so we can see the investment in the real economy that we want to see.
My noble friend talks, perfectly correctly, about finding the right balance between risk and growth. As I say, we are not dismantling any of the architecture that was put in place in the aftermath of the financial crisis, and it is quite right that we do not do that, but we believe that the pendulum has swung too far towards regulating only for risk. It needs to regulate not just for risk but for growth, and that is the right thing to do.
I think my noble friend is wrong to say that we are in any way giving financial advice. We are trying to put in place what has been called a targeted support framework that enables people to access the help they need to make the right financial decisions for them, and that will be ready to support consumers by ISA season next year. It would enable authorised firms, not the Government, to proactively suggest appropriate products or courses of action, using limited information about a customer and their circumstances. That could include helping people to make decisions about how to access their pension, supporting people with excess cash savings to consider investing for the first time. I cannot believe that anyone would think that was anything but a good idea.
Baroness Bennett of Manor Castle (GP)
My Lords, my question follows on from those of the noble Lords, Lord Davies of Brixton and Lord Sikka, both of whom spoke about financialisation. Earlier this year, the head of UNCTAD—UN Trade and Development —Dr Anastasia Nesvetailova wrote a piece on a path out of the “finance curse”. It offered suggestions to global South countries—developing countries—using the UK as a case study of what to be aware of from the finance curse. She wrote that
“financialisation had progressed against the backdrop of deepening asymmetries—sectoral and regional—in incomes, wealth, employment and even access to public services”.
I think we would all have to agree with that. She went on to say that
“the system … appeared to serve the interests of global asset owners rather than those of the people of the United Kingdom”.
How are the Government going to ensure, if indeed their changes have the effect that they desire, that the benefits are going to trickle down to people outside the financial sector? How else is the rest of the economy going to benefit?
Lord Livermore (Lab)
I have already made it clear in previous answers that I disagree with that analysis. It is not at all how we see the financial services sector.
How are people going to benefit? I think the 1.2 million people employed in the financial services sector right across the UK will benefit from that. That is a pretty substantial benefit. The noble Baroness will know that we need to get more investment into our economy, and we are not going to get that investment unless we have a growing and thriving financial services sector. So I am very clear that I disagree with the noble Baroness’s analysis.
Lord Tunnicliffe (Lab)
My Lords, any system of regulation consists of rules and administration. If you have good rules and bad administration, you will get bad regulation. Is my noble friend satisfied that the quality of administration is sufficient? If not, what is he doing about it?
Lord Livermore (Lab)
My noble friend sums up quite nicely the balance between rules and administration. We are maintaining many of the rules that were put in place, as I have tried to make clear this evening. We are maintaining the architecture that was put in place after the global financial crisis, but the way in which those rules were administered was overly burdensome and probably disproportionate, placed too much of a burden on the sector and stifled the growth there that we want to see. As I have said, the pendulum swung too far in the opposite direction, and the balance of regulation has gone too far towards regulating for risk and not enough for also regulating for growth. As I have said before, no other globally competitive financial services hub imposes such bureaucracy on its businesses, so neither should we.
My noble friend asks what we are doing about it. What we are doing about it underpins the entirety of these reforms. We are seeking to recalibrate and rebalance the approach to risk so that it is more proportionate and that, in the right places, consumers and industry can take informed risks so that we create the space for the innovation and growth in the sector that I think we all want to see.
Viscount Chandos (Lab)
My Lords, I welcome the Leeds reforms that have been announced, and I thank my noble friend the Minister for his comments. I am delighted that the noble Baroness, Lady Neville-Rolfe, agreed that the balance was being successfully struck between achieving financial stability and growth objectives. If some in the financial services industry have expressed disappointment, I suggest that that came from unrealistic expectations—perhaps a reminder of the challenge that it is for the Government to communicate the striking of that balance.
I particularly welcome the commitment to review and prospectively reform bank ring-fencing. The headlines resulting from the Governor of the Bank of England’s comment to the Treasury Select Committee that it was “not sensible” to scrap ring-fencing perhaps exaggerate the difference between his views and those of the Government. Will the proposed review assess the effect of unreformed ring-fencing on the supply and cost of credit to business?
Lord Livermore (Lab)
I am grateful to my noble friend for his comments. He started his remarks on the reception for these reforms. I think there is quite a consensus that they are a sensible and proportionate attempt to rebalance the system in the way that he describes. He spoke specifically about the ring-fencing regime and the Governor of the Bank of England’s comments yesterday, which were also referred to earlier. What the governor said and what we are doing are entirely consistent because the Government remain committed to retaining the ring-fencing regime, and that is what the governor was saying should be the case. I think what he said and what we are doing are the same thing.
We have announced an intention to implement material reforms to the ring-fencing regime. This will be enacted via a Treasury-led review of the regime with input, crucially, from the Bank of England and the PRA, which will consider both legislation and PRA rules. The review will be published by early 2026. It will look in detail at how reforms to the regime could relieve unnecessary burdens, strengthen the banking sector’s ability to support economic growth and deliver against our commitment to ensure that post-global financial crisis regulation is balanced and proportionate. My noble friend asked about specific details of the reforms. These will be subject to the outcome of the review, so I am unable to detail them at this stage, but we will legislate to take them forward when parliamentary time allows if that becomes necessary.
Employment Rights Bill
Wednesday 23rd July 2025
(3 days, 12 hours ago)
Lords ChamberEmployment Rights Bill 2024-26 View all Employment Rights Bill 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 113-IV(b) Manuscript Amendment for Report (Supplementary to the Fourth Marshalled List) - (23 Jul 2025)
21:51 - Division on Amendment 154 - Ayes: 85 / Noes: 127 - Amendment 154 disagreed.
Lord Carter of Haslemere
Lord Carter of Haslemere (CB)
Amendment 154 in my name seeks to remove Clause 113 from the Bill. Clause 113 was tabled at the 11th hour at Commons Report and gives the Secretary of State the power to bring legal proceedings in the employment tribunal, and to do so not because the Secretary of State is directly affected by what the employer is doing, but rather in place of a worker as if the proceedings had been brought by the worker. This is whether or not the worker consents and even if they strongly object. This is legally bizarre, unworkable and totally unnecessary. It could well destroy the relationship between employer and worker—indeed, any future employment relationship since, remarkably, the clause also applies to individuals who are seeking work.
I will focus on three things: the legal implications, the clause’s workability and its policy flaws. I will start with the legal ramifications. It is unprecedented, as far as I can see, for a Secretary of State to be able to institute employment tribunal proceedings or any legal proceedings in place of someone who does not want those proceedings to take place. The Secretary of State says that the provision is modelled on the Equality and Human Rights Commission but, apart from the very different public law context of judicial review, the commission has never instituted a private law action in place of another individual as Clause 113 now envisages for the Secretary of State.
The case of Wilson, to which the Secretary of State referred in her letter of 7 July to noble Lords, was not such a case, since the commission did not act in place of another person. It is inconceivable that the Equality and Human Rights Commission would initiate proceedings in place of a worker in the employment tribunal, let alone where that person did not consent. For the Secretary of State to be able to do so goes against the long-standing principle that, in order to instigate litigation, a claimant should have a sufficient interest—that is to say, be directly affected by whatever issue is being litigated. Exceptions to this general principle have occasionally been made for pressure groups acting in the public interest but, as the High Court reaffirmed in 2022, not where there is a more appropriate potential applicant who has chosen not to bring proceedings, which is the type of case we envisage.
Moving on to the workability of Clause 113, the debate in Committee showed that one reason why there is no precedent for what is proposed is precisely because any litigation lawyer will tell you it cannot work. If the worker does not consent then how will the Secretary of State acquire the evidence to bring a claim? In Committee, the Minister rejected an eminently sensible amendment tabled by the noble Lords, Lord Sharpe and Lord Hunt, which would have required the consent of the worker before proceedings could be brought. This would have made a major difference, but the Government rejected it, which shows that they envisage the power being used even without the consent of the worker. Without that consent, one can see the possibility of a worker, disgruntled with the claim, trying to invoke Rule 25 of the Employment Tribunal Rules to withdraw the claim and the Secretary of State resisting that attempt—hardly a great use of taxpayers’ money.
Even if the proceedings continue, should the worker, who did not consent to the claim, really be liable for the costs if the claim fails, which could amount to thousands of pounds? Extraordinary as it is, this is the effect of Clause 113(6). It provides that:
“The Secretary of State is not liable to any worker for anything done (or omitted to be done) in, or in connection with, the discharge … of the Secretary of State’s functions”
under the clause. This immunity from liability for the Secretary of State applies irrespective of how incompetently the claim may have been handled.
Furthermore, as the noble Lord, Lord Murray, so graphically articulated in Committee, since it is a power for the Secretary of State to bring proceedings, the unions could judicially review the Secretary of State for not exercising the power. This means there could be, in the noble Lord’s words, litigation to require the Secretary of State to litigate
“on behalf of somebody who does not want to litigate”.—[Official Report, 18/6/25; col. 2048.]
As he suggested, we are in Alice in Wonderland here, but it is where Clause 113 takes us—and all at taxpayers’ expense of course.
Finally, on the policy flaws, Clause 113 is completely unnecessary. The Committee stage of this Bill in the Lords brought out the extraordinarily wide scope of the powers the Secretary of State will acquire via the so-called fair work agency. This is, of course, just the Secretary of State under a different name. These include the powers to summon people to give information, to enter any premises to inspect and seize documents and examine computers, and even police powers to search, arrest and interview suspects in relation to labour market offences. Most people would assume that these sweeping enforcement powers will be more than enough to crack down on labour market abuse without a power to bring legal proceedings in the name of a worker who may not want those proceedings to be brought.
This is especially so given that Clause 114 provides that the Secretary of State can give legal assistance to a worker who wants to bring legal proceedings against their employer. This is surely the way this should be handled, rather than the Secretary of State unilaterally launching such proceedings in the belief that this is in the best interests of the worker. Perhaps it is in the best interests of the Secretary of State.
What happened to personal autonomy, especially the basic right to decide whether or not to bring legal proceedings in one’s own name? It could come as a bit of a shock for a worker, who might know nothing about the proceedings, to receive in the morning post a summons to court, especially when they realise they are treated as having brought the proceedings themselves and against their own employer to boot. Talk about choking on cornflakes.
It takes some mental agility to imagine how all this will also apply to a person who is not yet a worker but is seeking to be employed. It is hardly likely to endear them to their prospective employer, is it? If and when the worker does not get the job, they will have no remedy against the Secretary of State for ruining their chances.
This is a bad clause which fails on grounds of legal incoherence, practical unworkability and policy flaws. It needs to come out. I beg to move.
Baroness Neville-Rolfe (Con)
My Lords, I will speak to the amendment in the name of the noble Lord, Lord Carter of Haslemere. He has spoken with great eloquence and killer arguments. I agree with him, so none of us needs to speak for very long.
As he has said, this clause was added late in the day in the other place and there is one aspect which particularly appals me. The clause provides that the Secretary of State, or rather, in practice, their Civil Service agents in the new enforcement body, or any other enforcement officer as in Clause 113(7)(b), will be able to take a case to an employment tribunal where an employee is unwilling to pursue their own complaint—that is, without consent. Consent is such an important principle. Subsection (6) makes it clear that the Secretary of State or enforcement officer
“is not liable to any worker for anything done (or omitted to be done)”,
such as an error or reputational or personal damage. The clause also risks putting further pressure on the hard-pressed tribunal system.
The Government’s recent implementation plan seeks expert help in getting the detail of the provisions right. I have worked for small companies, I have worked for a company with 500,000 people, I have worked with USDAW, I have been a member of two Civil Service unions and I have been head of HR in a government department. I believe that this lack of consent will cause untold trouble. The clause must be dropped, and I hope colleagues across the House will vote for the amendment of the noble Lord, Lord Carter.
Lord Murray of Blidworth (Con)
My Lords, first, I declare an interest as a barrister who occasionally practices in employment law. Secondly, in Committee on 18 June, Hansard recalls that I described the Bill as
“a complete Horlicks … truly bizarre”
and
“absolutely beyond belief”.—[Official Report, 18/6/25; col. 2048.]
I am amazed at my moderation. Nothing I have heard since addresses my concerns. As ably outlined by the noble Lord, Lord Carter of Haslemere, whose amendment I entirely agree with, this clause allows the Secretary of State to bring a complaint to an employment tribunal without the consent of the complainant. Have these people ever been to an employment tribunal? This is absurd.
Is it proposed, in the event that the claimant has the temerity to disagree with the Secretary of State’s assessment that they have a valid claim, to witness summons the claimant, on pain of arrest, if they do not come and give evidence in support of their claim? If, when there, they have the temerity to give evidence against the claim brought by the Secretary of State on their unwilling behalf, will the Secretary of State apply to the judge to treat their witness as hostile, thus permitting the former to cross-examine the latter on the basis that they really were badly treated by their employer? This is palpable nonsense. This clause cannot stand part of the Bill.
I also draw the House’s attention to the fact that, as raised by the noble Lord, Lord Carter of Haslemere, the wording of the clause is an exercise in discretion and is therefore subject to judicial review. There can therefore be a judicial review of both the decision to bring proceedings on the part of the unwilling claimant and of the decision not to bring proceedings. This is going to be marvellous for those of us who are both at the employment Bar and the public law Bar. There will be endless litigation, all at public expense on every side. This is absurd. I invite the House to remove this clause from the Bill as swiftly as possible.
Lord Pannick (CB)
My Lords, I cannot match the peculiar tones of the noble Lord, Lord Murray, but I do agree with the thrust of his remarks. Noble Lords often oppose clauses in government Bills; sometimes noble Lords are alarmed by such clauses, but, very occasionally, it is appropriate to say that a clause in a government Bill is simply bonkers—a technical term, but appropriate in this context. That is the appropriate term in respect of a proposal that the Secretary of State should be given power to
“bring proceedings … in an employment tribunal”,
in place of the worker who has the employment right, where
“it appears to the Secretary of State that the worker is not going to bring proceedings”.
This is a quite astonishing provision, for all the reasons given by the noble Lord, Lord Carter, the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Murray, in particular because the Bill does not require the Secretary of State even to consult the worker whose rights they are going to pursue, far less to obtain the worker’s consent.
Of course, the worker may have good reason not to want to bring proceedings. Not everyone wishes to spend more time with their lawyers. Not everyone wishes to have the finer details of their conduct picked over in public by lawyers for the employer and to be the subject of a public judgment. I declare my interest as a practising barrister, occasionally in employment law cases. I spend much of my time advising clients in all areas of the law that litigation is not necessarily the answer to their problem. The idea that the Secretary of State should decide whether to bring proceedings, and not the worker themselves, could appeal only to those who believe in a state that is ever expanding to take more and more responsibility for areas of life.
Lord Garnier (Con)
My Lords, there are several styles of advocacy and we have had a good experience of some of them this evening, but in every way those who have spoken before me have been devastating in their unpicking of the ludicrous nature of the clause that the noble Lord, Lord Carter of Haslemere, is seeking to have removed from the Bill. I cannot improve on the gentle forensic approach that he took to the ludicrous nature of this clause. The legal ramifications, its workability and its policy defects are plain on the face of the Bill and I am amazed that any sentient Minister—or any sentient member of any legislature—could come forward with a proposal in the form of Clause 113. It is manifestly absurd. As the noble Lord, Lord Pannick, thoroughly pointed out, the implications of this clause are so obvious for us all to see that it is even surprising that the Government have the nerve to come forward with it and maintain their support for it.
This clause brought me in mind of something—and now I am going to get into my anecdotage. I, too, remember the Bar, but I confess that I have never once, at least not knowingly, been in an employment tribunal. But what I do remember is that about 40 years ago I was asked by some visiting Chinese judges to this country to explain the English law of defamation, which I did. After I had given what I thought was a pretty uncontroversial explanation of the law of defamation in this country, one of the Chinese judges said to me, “Hang on a minute, do you mean to say that an individual has a reputation that can be injured and, if injured, he can receive compensation for that injury in the courts of England and Wales?” I said, “Yes, they can. It’s funny, isn’t it?” He said, “But surely no individual citizen, if there is such a thing, has a private reputation—it is subsumed in the interests of the state, subsumed in the Communist Party of China”. The possibility of bringing a libel action as an individual was just foreign to him and quite puzzling.
If your entire personality is a creature of the state, I suppose that you would support Clause 113, because it is the state that takes over your personal autonomy and makes all the decisions about whether to sue or not to sue, whether to bring proceedings or not to bring proceedings, and whether to give evidence, as my noble friend Lord Murray so graphically explained a moment ago. Why should we, on behalf of the people of this country, tolerate what is little more than an Orwellian intervention in the private lives of the citizen? I cannot believe that the Government have any decent excuse or explanation for this—to use the technical term that my good friend the noble Lord, Lord Pannick, introduced into the debate a moment ago—“bonkers” piece of legislation. The Bill has plenty wrong with it as it is. If we are not to laugh at the Government, not to ridicule the Government and not to lose such little respect as many of us still have for the Government, I suggest that they remove this ludicrous clause.
Baroness Fox of Buckley (Non-Afl)
My Lords, I hope that the devastating interventions that we have heard so far will make the Government rethink. They deserve the ridicule being poured on them. I just want to make two additional points.
Clause 113 completely undermines the Government’s idea that the Bill is all about enhancing workers’ rights by empowering them to have more control over their employment protections. When we scratch further, the real power is being accumulated by agencies and quangos; in this instance, it is the Secretary of State disguised as the fair work agency. It is an indication that workers are almost a stage army to the accumulation of power by the centre. I worry that the Government are using workers’ rights to colonise more aspects of people’s lives on the basis that the Government think that they can act on behalf of workers because they know better—that is outrageous. I want them to consider what this would mean for an individual woman at work. A female worker says no, but the Secretary of State comes up and says, “I don’t care; we don’t need your consent. You don’t want to go to a tribunal? We are not interested in what you as a woman think as a worker. We are going to act on your behalf because we know better than you”. It is an absolutely flagrant and outrageous attack on worker autonomy.
My other question relates to what the noble Lord, Lord Katz, said in Committee in response to a discussion about the overburdening of employment tribunals. He said that we will find that the fair work agency will pick up a lot of the work of the employment tribunals. The noble Lord implied that a lot of the work of the employment rights tribunals, which were clogged up, could be picked up by the agency and that fast-track routes would be used. I therefore cannot understand why, in this instance, the Government are piling more work on to the employment tribunals. They seem to be wallowing in this lawfare. If they do not want the Bill to be exposed as not in the interests of workers but more in the interests of quangos, this clause should be dropped before we come back.
Lord Marks of Henley-on-Thames (LD)
My Lords, I have not spoken on the Bill before and I apologise for entering these debates at this late stage. Indeed, I start by saying that I have considerable sympathy with the amendment moved by the noble Lord, Lord Carter of Haslemere, to leave out Clause 113. As he and others have said, it would enable the Secretary of State to take proceedings without the consent of the worker concerned, even against that worker’s will, which I agree is a very odd position.
I have considerable hesitation in doubting the analysis of all those who have spoken before me, eminent lawyers and colleagues among them, but I am bound to say that I take issue with the categorisation of this clause as “bonkers”. The reason I take that view is because, on reflection, I can see circumstances where the Secretary of State might legitimately wish to take proceedings before an employment tribunal where the worker concerned did not want to do so. That might be because the worker was concerned about the risk of losing, or did not have the time, resources or simply the inclination to become involved in contested proceedings.
Lord Murray of Blidworth (Con)
Perhaps the noble Lord could explain how it is envisaged that the Secretary of State will know that such a worker has a claim and should win.
Lord Marks of Henley-on-Thames (LD)
I do not understand why the Secretary of State should not have that information as a matter of public record, or why he should not have become aware of it. Plainly, if the Secretary of State and his department do not have the faintest idea about the case, they are unlikely to invoke Clause 113 and bring proceedings on that basis. However, given the knowledge, it is for the Secretary of State to make a decision. In very many cases, I suppose that the Secretary of State will make a decision against intervening. But another possibility is that a worker might not be proud of their own conduct and might not want it publicly ventilated. These were all reasons that the noble Lord, Lord Pannick, effectively covered in considering why litigation might not be an attractive option for the worker concerned. The Secretary of State has to make, or would have to make, a decision about whether the private right of the worker not to sue is outweighed by the public interest in having a point determined.
Lord Pannick (CB)
Is it really appropriate for a Secretary of State to insist that the circumstances relating to an individual are publicly exposed—subject to cross-examination, subject to a public judgment—when the individual whose private rights are the subject of those proceedings wishes, no doubt for good reason, that they not be so exposed? Is it really appropriate?
Lord Marks of Henley-on-Thames (LD)
I venture to suggest that in some circumstances it might be, but I add an important point, which is that my party has been involved in discussions with the Government about the protection of such a worker.
Lord Marks of Henley-on-Thames (LD)
There is nothing secret about any such discussions. They relate to anonymity for such a worker and the restrictions on publicity that might protect such a worker from exactly the dangers and difficulties that the noble Lord, Lord Pannick, suggests and envisages. But the Secretary of State might, in a given case, take the view that an issue of law or principle was involved, with wider ramifications going beyond that particular case, and that the public interest required the issue to be determined. With respect to all the arguments that have been put by those who have spoken before me, I am not sure that any of those arguments met that possibility, certainly not in the way in which the noble Lord, Lord Murray, expressed it. Even the moderate tones of the noble Lord, Lord Pannick, and the noble and learned Lord, Lord Garnier, a colleague of mine, failed to deal comprehensively with that suggestion.
Lord Pannick (CB)
This is a very important matter. Surely the answer to his concern that the individual case may raise wider, broader issues is that it is absolutely inevitable in those circumstances that there will be other affected workers, one of whom no doubt will bring proceedings. We do not need the Secretary of State to bring proceedings in those circumstances. It is inconceivable.
Lord Marks of Henley-on-Thames (LD)
There might be others. Then again, there might not. I quite accept that a Secretary of State would have to weigh up very carefully the competing considerations in favour of the public interest in having a point determined against the private interest of the worker concerned in not being involved in any way in litigation. Of course, the worker concerned does not have to be involved; proceedings are brought—this is a point I will come on to in a moment—as if he were involved, but the point may need determination in any case.
I think I have covered the point about the public interest, which I suspect is the argument that we will hear from the Government. Nevertheless, and on a point that the noble Lord, Lord Carter, made, in a case where Section 113 is invoked, I suggest that it would be utterly wrong for such a worker to be exposed to risk by the Secretary of State proceeding with such a case. I have dealt with the point about anonymity and circumscribing publicity, and I suggest that this must be addressed before this clause becomes law.
Lord Garnier (Con)
I am sorry for interrupting the noble Lord’s developing argument. He talks about anonymity; that is presumably so that the individual can have his case subsumed by the Government without his name being known. Is the noble Lord then going on to suggest that he will have to give evidence behind a screen, or using the other witness protection measures that we use in, for example, cases of rape, so that the complainant is not seen? Has he thought through to the end the practical consequences of this anonymity argument?
Lord Marks of Henley-on-Thames (LD)
Such protections as would be afforded would depend on the individual case and on such measures as the tribunal thought appropriate; they might indeed include anonymity or witness protection in an extreme case. I do not believe that that is likely, but I do believe that the right of the worker to some sort of privacy, in a case in which he positively did not want to be identified, would have to be protected.
Going on to my point about the risk in costs, I suggest that it would be simply unconscionable if the decision of the Secretary of the State to take proceedings could expose the worker to a risk in costs. There is no protection in the Bill for a worker on this point; indeed, in subsections (3) and (6) in particular, there is the clear suggestion that there would be a risk in costs for an unwilling worker claimant. Specifically, subsection (3) would provide that, if the Secretary of State brings such proceedings, they are
“to be proceeded with as if they had been brought by the worker”,
and that needs to be addressed. As the noble Lord, Lord Carter, pointed out, subsection (6) will provide that:
“The Secretary of State is not liable to any worker for anything done (or omitted to be done) in, or in connection with, the discharge or purported discharge of the Secretary of State’s functions by virtue of this section”.
That, in my submission, renders the worker vulnerable to an order in costs and there ought to be an indemnity against any such order. I accept that there is not one; the question is therefore whether that can be addressed by the Government. It is not a question that leads to a stand part decision that the clause should be left out of the Bill altogether.
We would of course hope that no employment tribunal would make a costs order against a worker in such circumstances, but this House should not proceed on the basis of hope alone; the possibility remains, particularly if the tribunal were to take a dim view of the worker’s conduct. That, we should remember, may be exactly the conduct that sensibly dissuaded the worker from launching proceedings in the first place.
I invite the Government to bring forward an amendment, hopefully by agreement at Third Reading, whereby protection from this risk in costs could be given to a worker, either by way of indemnity by the Secretary of State or by a prohibition on a costs order. I also urge the Government to look at the other protections that the worker might have. Alternatively, the Government might consider giving solid assurances to meet this point. I give way to the noble Lord.
Lord Pannick (CB)
Can I ask for the noble Lord’s assistance? He mentioned that, according to subsection (3),
“the proceedings are to be proceeded with as if they had been brought by the worker”.
Does he think that that means that if the worker decides to withdraw the proceedings, they are to be treated as withdrawn?
Lord Marks of Henley-on-Thames (LD)
The noble Lord has plainly given the Government solid pause for thought on that point, because of course any proceedings before a tribunal of first instance can be withdrawn by the litigants. The litigants in this case would be the Secretary of State and the other party—presumably the employer. If subsection (3) is given the interpretation that the noble Lord, Lord Pannick, suggests might be given to it, the worker would be treated as the litigant. That is a difficult point for the courts to resolve. It is a point that at Third Reading the Government really must resolve, and that I entirely accept.
Lord Goddard of Stockport (LD)
Follow that. I failed my Bar exam at 11 and I never retook it, so I am at a disadvantage to the House in trying to sum up the debate on this amendment. My noble friend Lord Marks made the case that this is not just an open-and-shut, bonkers piece of legislation; there is more to it.
Last week, I went for my health check, and I had my blood pressure and cholesterol checked. I recommend that the noble Lord, Lord Murray, keeps away from his doctor until probably next Wednesday, because his blood pressure will probably come down by then. That is meant in good spirit, because the noble Lord believed what he said and expanded on it.
For me, there is a different question here. This got a real going over in Committee too, where it all got a bit contentious with the lawyers. The noble Lord, Lord Pannick, always rises carefully and slowly and makes a forensic examination. Unfortunately, my noble friend Lord Marks tries to challenge that, and the noble Lord, Lord Pannick, has to have three or four more goes. However, we are not in the High Court, we are in the House of Lords, so we listen to the exchange.
The point that I am trying to make is that we have spoken to the Government. When somebody said, “We’ve spoken to the Government”, others went, “Ooh, no!” That is the point. There is the Bill and we should talk to the Government. We should raise our concerns with them and see what they have to say. But you do not do that because, “This is a good open goal. This is one we can really embarrass the Government with”. Well, you cannot—because the Secretary of State will have the power to look after somebody who needs looking after.
All those hundreds of years ago, when we had slaves, it was not the slaves who were petitioning to be freed; it was liberal-minded people who thought it was wrong that they should have no say and no place. That is what happens. Workers get jobs. They may be illegal or migrants, but whatever they are, they are human beings and they deserve support. Yes, the state is ultimately the last resort. When everything else fails—health, sickness, drug addiction or whatever it is—the state is the ultimate provider of care from the cradle. In my opinion, there is nothing wrong with the state saying—
Baroness Falkner of Margravine (CB)
My Lords, I too need to apologise to the House because I have not spoken previously on the Bill. I am therefore required, I am afraid, to add a few seconds of tedium in declaring my interest as chair of the Equality and Human Rights Commission. I am required to do that, but I emphasise that I am speaking tonight in a personal capacity.
I rise to question what was said by the noble Lord, Lord Goddard, and others who referred to the Government’s desire to protect those people who are vulnerable, who might be migrants or new arrivals, and who might not know their rights under the law. Of course that is a laudable aim. However, as someone who is a first-generation migrant—I came to this country in my own capacity—and who has slowly learned of my rights and my ability to exercise them, I can say to the noble Lord, Lord Goddard, that there is very good reason why those people need autonomy and privacy. They may not wish to be the subject of litigation because they have very palpable concerns about safety and their economic and familial status, particularly in a world with social media and high levels of media attention, if they are exposed as having done anything at all these days.
The reason that migrants and vulnerable new arrivals in our country keep a low profile, when they choose to do so, is very understandable. The idea that the state should pluck them, decide that they have been badly treated and use them as an example is pretty shocking and deleterious to their interests. It will not help them; they will hide under cover even more than they already do.
Lord Goddard of Stockport (LD)
I heard what the noble Baroness said, and I accept her premise. By the same rule of that premise, those people suffer or are treated badly until they become accepted in society and can then raise their heads above the parapet—if that is the logic of the argument the noble Baroness is trying to make to me. The noble Lord, Lord Marks, makes it quite clear that anonymity is absolutely four-square in this, so it does not happen that the media get hold of it or it appears on the networks and makes things different.
Where a case ends up with the Secretary of State and the evidence is there that somebody is in such a situation, why should the Government not intervene and say, “You have been treated so badly that we are going to stand up for you in a tribunal” or, “We are going to try to do something”? If you look at the bigger picture rather than the individual pictures, there is a way through this, without thinking that it is—this is the last time I will say it—a bonkers Bill. It is not bonkers. The theory behind it is sound. Perhaps it has not been explained clearly enough.
Lord Murray of Blidworth (Con)
How does the noble Lord envisage the Secretary of State knowing which cases to bring?
Lord Goddard of Stockport (LD)
I said at the beginning that I am not a legal person. But there must be something that will happen: a whistleblower or somebody will inform somebody of someone’s condition that they find intolerable, it ends up with someone and somebody has to deal with it. If you go to see the person and they do not want to get involved, are frightened, are unsure or do not know their rights, who scoops that person up and just asks the question? Maybe it is not worth pursuing, but what is wrong with just asking the question?
I ask the Minister to confirm this flexibility that we need to understand the powers. Will they be used proportionately and transparently? We need to hear that. The Government need to tell us how this legislation will work practically. If they can explain, and perhaps not allay all the House’s fears but begin to give some clarity to the thinking behind it, because this is something that has been thought out quite seriously, the House should listen to that.
Baroness Fox of Buckley (Non-Afl)
I was just going to ask a question, as others did. As we are passing law, is it not the case that—
Lord in Waiting/Government Whip (Lord Katz) (Lab)
As it is quite late and we still have a lot of business to do, it is worth respectfully pointing out not just to the noble Baroness but to other noble Lords that the Companion is pretty clear about the rules of debate on Report. At 8.145 it states:
“On report no member may speak more than once to an amendment, except the mover of the amendment in reply or a member who has obtained leave of the House”.
We have a lot of business to go through. People have had the opportunity to state their case. Perhaps we should proceed with Front-Bench wind-ups.
Lord Sharpe of Epsom (Con)
My Lords, that was a fascinating debate. I am not a lawyer either, but I was very taken by the arguments made by the noble Lord, Lord Carter of Haslemere, which I thought were quite superb, by my noble and learned friend Lord Garnier and by my noble friend Lord Murray of Blidworth. I thought my noble friend Lord Murray displayed exemplary moderation—I think that was his word—in his delivery. I cannot improve on the legal arguments made by the lawyers, the noble Lord, Lord Pannick, my noble and learned friend and my noble friend. For a moment I wondered whether the noble Lord, Lord Marks of Henley-on-Thames, had—to use my noble and learned friend Lord Garnier’s phrase—subsumed his legal personality to be a creature of the state for a moment. He seemed to come back fighting, so I applaud him for that.
Frankly, Clause 113 is one of the most chilling and illiberal proposals in the entire Bill, and there is competition for that accolade.
Let us also consider somebody who has not been considered in this particular debate so far: employers. What sort of message does it send to them? Your employees’ silence cannot be taken as peace or resolution, but rather as a vacuum that the state may fill with litigation. The noble Lord, Lord Goddard, has a rather more touching faith in the state than I do. How does that promote trust or fair resolution in the workplace? I cannot see how it does. It would fuel paranoia, it invites conflict and it certainly undermines mediation. If a worker feels intimidated by their employer, as has been claimed before in these debates, do they really imagine that an employee will feel less intimidated by the prospect of a Secretary of State marching into their dispute, as the noble Lord, Lord Carter, stated, without any liability and then turning it into a tribunal case in their name? That is not empowerment; it is political theatre at the expense of personal agency. We should not accept or normalise that.
I have a question to those who have been pushing the argument about anonymity. I am not a defendant—or rather, I am not a lawyer; I may be a defendant—so I may have phrased this slightly incorrectly, but the defendant presumably will be known in these cases, and if the defendant is known, it is not especially difficult to find out who the plaintiff is. I think that is the correct terminology. So how on earth would granting an individual anonymity achieve the purpose that is desired? I do not get that—somebody would have to explain it to me.
This clause represents a fundamentally dystopian instinct that the state can somehow supplant the will of the individual and act on their behalf without their active participation or consent. I say to the noble Lord, Lord Goddard, that this is paternalism being taken to an authoritarian extreme.
In this debate we have heard “ridiculous”, “manifestly absurd”, “ludicrous” and “bonkers”—which I think won on a split decision. But there is one last point. The tone of this debate has been to invite both horror and ridicule in equal measure. Is that really what the Government want to achieve with this piece of legislation?
The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)
The words that the noble Lord just said come from the Opposition Benches and do not reflect what we are intending by the Bill, or indeed these particular clauses.
I will first speak to government Amendments 156 to 158 in my name, which are minor but important technical amendments to Schedule 10. Amendment 156 makes a small correction to paragraph 36(6), replacing the phrase “that subsection” with a reference instead to “subsection (3)” of Section 15 of the Gangmasters (Licensing) Act 2004. Amendment 157 ensures that Schedule 1 to the Immigration Act 2016 is repealed following the abolition of the Director of Labour Market Enforcement, and Amendment 158 removes specific reference to paragraphs 9 and 11 of Schedule 3 to the Immigration Act 2016. The purpose of these changes is to ensure that the provision functions as intended and provides legal clarity. They do not alter the policy or substance of the Bill in any way but ensure that the schedule functions as intended.
On Amendment 154 tabled by the noble Lord, Lord Carter, the Government were elected on a manifesto pledge to deliver the plan to make work pay in full. This sets out that the new employment rights enforcement agency would have the power to bring civil proceedings to uphold compliance with employment law. This clause delivers that pledge.
The noble Lord, Lord Carter, referred to the precedent, and yes, the precedent that we are citing is the example of the Equality Act 2006, Sections 28 to 30 of which are the precedent for Clauses 113 to 115. Section 28 of the Equality Act enables the Equality and Human Rights Commission to assist an individual who is or may become party to legal proceedings. Section 30 of the Equality Act, which is the precedent for Clause 113, affords the EHRC the capacity to institute and intervene in legal proceedings, including for breach of EHRC rights, even though it is not a victim.
The noble Lord, Lord Carter, said there was not an example of where the EHRC had taken over a case. However, in the case of MS (Pakistan) v Secretary of State for the Home Department, the EHRC in fact substituted itself once the original appellant withdrew from the proceedings. This was a substitution, with the consent of the Supreme Court, by the EHRC in the same way that the fair work agency could substitute itself in place of a worker without their consent.
The EHRC uses Section 30 strategically to clarify the law and act where there are egregious breaches. We envisage that the fair work agency, rather than the Secretary of State as such, will use this power in Clause 113 similarly. Noble Lords have misrepresented what is intended by this clause. It is intended to address some of the worst employment practices that current regulations do not adequately cover. I agree with the noble Lord, Lord Marks, that there are of course cases where individuals or groups of workers are unable or reluctant to take a case, but that does not necessarily mean that the case should not be taken, because there are wider issues at stake. For example, the fair work agency could use the power to clarify entitlement to holiday pay where enforcement officers do not have enough information to confidently issue a notice of underpayment, or the fair work agency could exercise the power to clarify the employment status of a group of individuals. Currently, employers may misclassify workers as self-employed to get out of giving them the rights that they are entitled to. Without this power, the fair work agency has no ability to challenge such claims.
To give a specific example on the possible application of Clause 113, the Director of Labour Market Enforcement has flagged endemic bad practice in the hand car wash sector. A particular challenge in this sector is misclassification of workers, which stymies HMRC’s efforts to enforce the minimum wage. Currently, if a hand car wash claims that its workers are self-employed, HMRC has no means to test this in the courts. It must go through the full notice of underpayment process and wait for the employer to appeal against the notice of underpayment. This can lead to nugatory work if the appeal is upheld and otherwise delay workers getting their due rights. This is a gap in the existing system of state enforcement, which this power will go some way to remedy.
Just as the current system works, the fair work agency will take a whole-employer approach to enforcement. This has the advantages of a resolution for more workers than individual cases against the employer. But in such circumstances, where the fair work agency may be taking action for hundreds or thousands of workers, it is simply not practical to get consent from every individual concerned. As a strategic approach, this power will be used when acting in workers’ best interests to clarify the law. As with the EHRC’s powers under the Equality Act, the fair work agency will not need the consent of each individual concerned to take on cases. The fair work agency will therefore be able to decide when to seek clear, neutral and authoritative guidance from a tribunal on the application of employment legislation.
As we know, in the worst cases of serious exploitation, workers may be reluctant to give their consent due to fear of retribution from the employer. The noble Lord, Lord Goddard, was quite right to say that there are circumstances in which we have the responsibility to look after the individuals who are suffering at the hands of rogue employers and feel powerless in those circumstances. We know that many migrant workers with legal rights to work in the UK, particularly low- paid workers, are reluctant or unable to enforce their employment rights. These workers have understandable concerns, including fear of retaliation, lack of awareness or language barriers. For legal migrants, employment is their prerogative and, for those workers, there are wider implications in challenging an employer that could bring about repercussions for their employment or potentially impact on their visa. We believe that requiring consent from workers would make it easier for employers to attribute blame to individual employees, and they would suffer as a result.
Baroness Jones of Whitchurch (Lab)
I am going to carry on. When exercising this power—
Baroness Jones of Whitchurch (Lab)
My Lords, we have had advice already about what the Companion says on this. The noble Lord has spoken once.
Baroness Jones of Whitchurch (Lab)
I think that the Companion overrides anything that I have to say.
When exercising this power, the fair work agency will of course act in accordance with the rights under the European Convention on Human Rights, including Article 8, and comply with data protection legislation. In doing so, it must act in accordance with the law and for a legitimate purpose.
The noble Lord, Lord Marks, raised the issue of anonymity. In appropriate cases, the fair work agency will consider applying under Rule 49 of the Employment Tribunal Procedure Rules 2024. Rule 49 allows the tribunal to restrict public disclosure of aspects of the proceedings. That means that workers’ names can be kept from the public domain—
Lord Garnier (Con)
My Lords, I can see that the Minister is in a conflict between the advice that she is getting from her Whip and the need to answer questions from the House. Would she not agree that rather than the Government bringing proceedings through their agency in the name of the worker, the simple thing would be to pass a law allowing the Government to bring proceedings in their own name, bearing the risks and burdens of bringing litigation in their own name and bearing the costs if it fails?
Baroness Jones of Whitchurch (Lab)
The point that we were making is that this is about test cases, which, as we know, is a frequent way of clarifying legislation, rather than primary legislation.
The noble Lord, Lord Marks, raised the issue of anonymity. In appropriate cases, the fair work agency will consider applying under Rule 49 of the Employment Tribunal Procedure Rules 2024. Rule 49 allows the tribunal to restrict public disclosure of aspects of the proceedings. That means that workers’ names can be kept from the public domain to protect their anonymity and to protect them from any reporting in the media, where it is necessary to do so in the interest of justice or to protect their convention rights. When deciding whether to give an order, the tribunal must give weight to the principles of open justice and the convention’s right to freedom of expression. The tribunal can do this on its own initiative, or the fair work agency can apply for such an order. The fair work agency must also comply with convention rights and data protection legislation, ensuring appropriate protections for individuals and fairness of proceedings.
I understand noble Lords’ interest in how this power will operate and confirm to the House that the Government will publish guidance on how the fair work agency will exercise this power in practice. We will develop detailed guidance, following deep and extensive engagement with social partners and the fair work agency’s advisory board. It will then be for the fair work agency, acting within this guidance, to determine which cases it brings to the tribunal. That will ensure that this power supports those who play by the rules. This approach enables the fair work agency to protect workers’ rights and to tackle injustice and abuse against legitimate workers.
This clause presents an opportunity to make a genuine difference in tackling the scourge of labour exploitation in the UK. Unchecked labour exploitation is unfair on the individuals who are being exploited. It is unfair on the majority of employers, who want to do right by their staff, and it is unfair on workers who are denied jobs by employers exploiting loopholes. The new power will complement the existing powers of the fair work agency, such as the powers to issue notices of underpayment, while enabling the fair work agency to act where these powers cannot be accessed. The fair work agency will exist to end labour exploitation and create a fair and level playing field for employers and for workers. A fair work agency with any less power to act for these most vulnerable would be an unacceptable failure for workers’ rights.
To the noble Lord, Lord Carter, I remain open to discussing how best to deliver this power and to ensure that it is appropriately safeguarded. However, I reiterate that this power is neither novel nor unprecedented and that it delivers a manifesto commitment. I therefore ask the noble Lord to withdraw Amendment 154.
Lord Marks of Henley-on-Thames (LD)
My Lords, I am sorry to get up again, but would the Minister like to say something about adverse costs orders against workers?
Baroness Jones of Whitchurch (Lab)
My Lords, when we debated this in Committee, we made it clear that there would not be any cost to workers. The noble Lord, Lord Carter, suggested that the worker would be liable to costs where they had not consented to the Secretary of State taking a case on their behalf. Let me be clear that the worker will not be liable for the costs in these circumstances.
Lord Carter of Haslemere (CB)
My Lords, I am grateful for all the powerful interventions we have heard this evening from very eminent speakers indeed, including the noble and learned Lord, Lord Garnier, the noble Lords, Lord Murray and Lord Pannick, and the noble Baronesses, Lady Fox, Lady Neville-Rolfe and Lady Falkner. Some really powerful points have been made around the importance of personal autonomy, the unworkability of the clause in relation to witness summonses and adverse witness results, and a duty to consult, which was a powerful point made by the noble Lord, Lord Pannick.
The noble Lord, Lord Marks, referred to the fact that the worker might not want to bring proceedings and therefore would be happy for the Secretary of State to do so in his or her place. That misses the point, which is that the worker might object to legal proceedings being brought in their name and might not give their consent. That is, for me, fundamental in this whole clause.
I believe that this is legally unprecedented—we can have further discussions about that. I think it is unworkable. I think it is completely unnecessary, given that the Secretary of State can support a worker to defend proceedings themselves. I read the manifesto and all I saw was “make work pay”. Those three words cover a multitude of sins. There was no mention of a power to bring proceedings on behalf of a worker—I read it very carefully. I feel that there has been enough power and passion in this debate to warrant seeking the opinion of the House, which I now do.
Member’s explanatory statement
This amendment corrects an incorrect cross-reference.
“(ga) Schedule 1;”Member’s explanatory statement
This amendment provides for the repeal of Schedule 1 to the Immigration Act 2016 as a consequence of the abolition of the Director of Labour Market Enforcement.
Member’s explanatory statement
The effect of this amendment is to repeal paragraph 10 of Schedule 3 to the Immigration Act 2016, which is not needed as a result of the repeal of paragraphs 11 and 12 of that Schedule by the Bill.
Lord Hunt of Wirral
Member’s explanatory statement
This amendment will ensure that the early conciliation period is proportionate to the extended limitation period for tribunal claims. This is necessary to promote the early resolution of claims and to clearly convey that, from a policy standpoint, there is active support for avoiding litigation.
Lord Hunt of Wirral (Con)
My Lords, we now move to consider the employment tribunal system. I shall speak first to Amendments 158A and 158B. The Government are extending the time limit for individuals to bring claims to an employment tribunal, but if that is the case, and if, as the Government have repeatedly said, they value early conciliation and the vital role that ACAS plays in resolving disputes before they reach litigation, then surely the same principle must apply to the conciliation period itself. Extending the early conciliation period from six weeks to three months would provide claimants and employers alike with more breathing space to resolve matters amicably, reducing the burden on the tribunal system and promoting quicker, less adversarial outcomes.
I will also speak to Amendments 180 and 186. I will not repeat the arguments that I and many noble Lords across this House have already made about the state of the employment tribunal system, but let us be clear: the situation is now dire. We have spoken to a range of people involved in the system and hear the same message: employment tribunals are in disarray, with claimants waiting for up to two years for their cases to be heard. We believe that justice delayed is justice denied.
The Government say they are investing in tribunals, pledging to hire more judges and providing additional funding, so I hope the Minister will be able to answer these questions. First, how many new judges have been appointed? Secondly, what is the scale of the funding and how will it be allocated? Thirdly, will the Government also commit to hiring more administrative staff to ease the backlog? If so, how many? Until we have clear, credible answers to these questions, we believe it is simply irresponsible to bring forward clauses in this Bill that will place even greater strain on a system that is already buckling under pressure. I just hope that the Minister will have answers to these and other questions.
I will also refer to Amendments 186 to 188. We believe that there is this difficulty with the existing system and we have already seen the Government push back implementation of parts of this legislation to 2027. I do not know whether this is because they have at last had a moment of clarity and realised just how damaging some of these measures could be in practice. We now have an amendment asking to delay further until 2029. Frankly, this is not just reasonable; we believe it is necessary. A four-year delay might be the bare minimum to avoid the disasters which would otherwise be presented by this legislation.
Let us not pretend this delay is some kind of political foot-dragging on the part of the Government. To seek to delay implementation until 2027 of what was said to be a vital Bill is an admission that this legislation is deeply flawed and that rushing it through risks wreaking havoc on businesses, workers and the tribunal system alike. What is more, with the Government and the unions now seeming less like allies and more like wary rivals, this delay might be something the Government are willing to accept. I beg to move.
Lord Katz (Lab)
I am pleased to have a contrast in terms of debate length. It is good to hear from the noble Lord, Lord Hunt of Wirral. I will speak to this quite large group of amendments and, for the sake of brevity, try to cover as much ground as I can in time.
On Amendments 180 and 186. We recognise the concerns of the noble Lord, Lord Hunt of Wirral, over the employment tribunal system. I reassure noble Lords that we have heard the concerns of your Lordships’ House, the other place, and broader stakeholders representing employers and employees, and we are already acting. This includes recruiting more judges and legal caseworkers, and providing significant additional funding to ACAS for 2025-26. ACAS’s annual report shows that, of the approximately 125,000 early conciliation notifications received by it, approximately only 33% proceeded to employment tribunal claims.
I can try to answer some of the direct questions from the noble Lord, Lord Hunt, on the increased resources for the system. On new judges, 50 new fee-paid part-time employment judges were appointed in 2024-25 and a further three recruitment exercises to increase capacity are being undertaken in 2025 and 2026. I will reflect on Hansard and, if there are other questions on this I have not covered, I will of course write to the noble Lord.
As was pointed out earlier in the debate, we are also considering other areas such as the role the expanded fair work agency could play, where this would reduce the need for costly and lengthy tribunal claims. We are happy to receive further constructive suggestions from noble Lords on their ideas for reform, but we are of the view that it would be disproportionate to make the vital improvements to workers’ rights contained in this Bill dependent on the kind of review the Opposition propose.
Amendments 158A and 158B were also tabled by the noble Lord, Lord Hunt of Wirral. The suggestion about increasing the time for early conciliation is indeed constructive. As we have said previously on a number of occasions, we are engaging with businesses and unions to consider the ways to address growing demand and improve the efficiency of the employment tribunal system. Part of this work involves looking at how we can improve the already good work that ACAS is doing to help parties reach mutually agreed outcomes without the need for stressful and expensive litigation.
The six-week early conciliation period takes place prior to a claim being brought to the employment tribunal and provides an opportunity for employers and employees to try to reach an agreement without having to go to a tribunal. Increasing the time for early conciliation could provide some benefits to parties, but we need more time to consider how this would interact with other reforms and identify potential unintended consequences. Changes to the period of early conciliation can be made using secondary legislation and therefore it is not necessary to use primary legislation for this purpose. Perhaps the compromise I might suggest is that we will be happy to reflect on the suggestion that has been made as part of our wider work, and I thank the noble Lords and other colleagues for their amendments.
I turn next to Amendment 185, which was tabled by the noble Lord, Lord Sharpe of Epsom. The Strikes (Minimum Service Levels) Act 2023 unduly restricts the right to strike and undermines good industrial relations. It has proven to be ineffective and has contributed, one might argue, to industrial unrest. It is worth pointing out again, as we have already heard this evening, that no employer has ever issued a work notice under the Act and not a single day of strike action has been prevented since it was introduced. Indeed, reflecting on Questions earlier today, I repeat that we lost a record number of days to strike action in 2022 and 2023—the highest number since 1989, if I recall correctly. That Act definitely did not prevent more industrial action taking place.
Rather, we believe negotiation and co-operation are better ways to ensure that essential services continue during strikes, while respecting workers’ rights. For these reasons, we are committed to removing this legislation as soon as possible. Our commitment to repeal the legislation has been trailed for over a year. We made the commitment to make work pay, it was reiterated in our manifesto, and we announced it again in August last year, so it will not come as a surprise to any employer. As I said, in any event, employers are not using the legislation anyway.
Amendments 187, 189, 190 and 191 were tabled by the noble Lord, Lord Leigh of Hurley—he is not in his place—and the noble Lord, Lord Sharpe of Epsom. We have always said that we would engage and consult comprehensively on implementation to ensure that strengthened rights, protections and entitlements work for all. We want employers, workers, trade unions and others to have the time and space to work through the details of each measure with us.
On Amendments 187 and 189, I remind noble Lords that our road map, which the noble Lord, Lord Hunt of Wirral, referred to, sets out our plans for consulting on key provisions in Part 1 and Part 4 this autumn and into early 2026. We will then publish our response to each consultation, in line with published guidance. This will include a summary of responses received and a breakdown of the type of respondent. This reflects what we have already done in published consultation responses.
Through all these consultations, we will continue to engage with SMEs to ensure that their vital perspectives are fed into policy development, and we will provide sufficient support to prepare for these reforms. We value the constructive feedback and insights that such businesses and organisations give, and we will continue to prioritise engagement moving forward.
On Amendment 190, I remind noble Lords that, since 2016, there have been 33 reports and strategies on the effectiveness of labour market enforcement. I also remind noble Lords that the single enforcement body, regardless of the name, was a policy pursued by both the Opposition and the Liberal Democrats. Indeed, I believe that the proposal, under different titles, was in all three manifestos at the general election. So, whereas previous Governments have dithered and delayed in taking action, we are taking action to tackle the fragmented and ineffective enforcement system by bringing it all under one roof in the fair work agency.
Lord Hunt of Wirral (Con)
My Lords, I am very grateful to the Minister for his response. I believe that he accepts that there is grave concern across the board about the state of our employment tribunal system today. That concern is among workers, employers and, especially, employment lawyers.
I welcome the fact that the Minister accepts that there is a need to extend the early conciliation period. He said that it could be done by secondary legislation; well, let us reflect on that. It would certainly help to reduce the pressure on the system, which is already under immense strain, but we lack clarity on some basic questions. How will employment tribunals be funded? There are so many question marks about how many further judges are needed and how many administrators will be appointed. What is the plan to bring the backlog under control? It is very serious at the present time. If rights cannot be enforced in court, they effectively do not exist. I urge the Government to take these concerns seriously and bring forward proper solutions. In the meantime, I beg leave to withdraw the amendment.
The Earl of Clancarty
“Independent Freelance Commissioner(1) There is to be an office known as the Office of the Freelance Commissioner.(2) The Office in subsection (1) must be established by the Secretary of State by regulations three months after the day on which this Act is passed.(3) The Office of the Freelance Commissioner will be led by an individual appointed by the Secretary of State titled the “Independent Freelance Commissioner”.(4) The role in subsection (3) is referred to as the “Freelance Commissioner”.(5) The Freelance Commissioner may appoint staff to the Office of the Freelance Commissioner they consider necessary for assisting in the exercise of their functions in subsection (6).(6) The Freelance Commissioner is responsible for—(a) representing the interests of freelance workers in the application of employment rights under this Act,(b) ensuring fair treatment of freelance workers across different sectors,(c) regularly engaging with sectors with high proportions of freelance workers about the application of provisions of this Act,(d) gathering and analysing data about the freelance workforce,(e) identifying issues and finding solutions to challenges faced by freelance workers as a result of provisions in this Act, and(f) ensuring that the duty to consider the freelancer workforce under section (Duty to consider freelancer workforce) of the Employment Rights Act 1996 is discharged properly.(7) The Freelance Commissioner must publish an annual report on the discharge of their functions set out in subsection (6) and lay this report before Parliament.(8) For this purpose of this section, a freelancer is defined according to section (definition of “freelancer”) of the Employment Rights Act 1996.(9) Regulations under this section are subject to the negative resolution procedure.”Member’s explanatory statement
This amendment establishes the office of the Freelance Commissioner and makes provisions for relevant duties and responsibilities.
The Earl of Clancarty (CB)
My Lords, I will speak to my Amendment 160, although I support all the amendments in this group. I declare an interest as a self-employed visual artist. Amendment 160 seeks to establish a freelance commissioner. It is closely tied to consequential Amendments 161 and 162, in the name of the noble Lord, Lord Clement-Jones, which seek to define what a freelancer is and to give the freelance commissioner greater teeth. I am very grateful for the support on this from the noble Lord, Lord Clement-Jones, and I welcome the support of my noble friend Lord Freyberg and the noble Lord, Lord Sharpe of Epsom, as well as that of my noble friend Lord Colville, who I know would have signed this amendment if there had been room to do so.
The first thing to say is that the creative industries welcome the appointment of a champion for this sector, as announced in the industrial strategy after Committee, and are pleased that that champion will be a member of the Creative Industries Council. These are things that the creative industries have been asking for for a long time, so there is appreciation that the Government have listened in this respect. Yesterday, I also had sight of the draft terms of reference—which is, of course, interesting timing. Those terms of reference, which are the result of conversations between relevant organisations and the DCMS within the framework of the Good Work Review, are impressive, if not yet entirely comprehensive, tasks and concerns. It is important to stress that this also illustrates the immense challenges a freelance champion will have. Nevertheless, I applaud the Government for opening the lines of communication between the DCMS and other organisations; long may that continue.
However, there remain questions concerning the champion. What powers will the champion really have, if any significant powers at all? Is this to be a salaried position? How much, in practice, will the champion be able to cut across different departments? Will this role be more about guidance for the sector rather than the really necessary action required for freelancers in terms of the many rights that standard employees have—and to a large extent take for granted—but that freelancers lack? I would be very grateful if the Minister could fill in some of those gaps if she is able to do so.
There are broadly two reasons why we should have a statutorily appointed and independent freelance commissioner. The first is that we urgently need someone to look at the whole landscape of freelance and self-employed work, which constitutes a not-negligible 15% of the workforce—and this is a sector that is growing. As my noble friend Lord Londesborough pointed out in Committee, this includes not just the creative industries but construction workers, agricultural workers and others. My amendment covers that landscape, one that the Bill—which is supposed to be an Employment Rights Bill, not an employee rights Bill—does not cover. Instead, as freelancers are always asked to do, we are told to wait in line. This of course happened during Covid, when so many freelancers fell through the gaps in support.
Even looking just at the creative industries, there is a question as to whether the whole of the creative industries themselves would necessarily be served by the new champion, in whatever guise that comes. The DCMS’s current understanding of these industries may be narrower than the reality, and this is certainly true of those craft industries—hugely important for our economy—that may not necessarily fall within the champion’s remit because of the manner in which parts of the creative industries are currently defined. This is something for the Government to look closely at, and I know that my noble friend Lord Freyberg intends to flesh out some of the detail of this very real concern about invisibility in both this and the debate that follows.
The second crucial reason for having a statutory appointment is not just that that role would have the requisite powers to argue for and effect real change, with the necessary authority to do so, but that it is a long-term position that cannot be rescinded easily because we are in this for the long haul. There is no doubt that freelancers’ concerns—this is certainly true of the creative industries—have grown more critical in terms of rights; income; the problems with late payment; Brexit, which has affected and continues to affect so many of our creative industries, not just music; AI, of course; and, crucially, the downturn in the funding of the sector. All these things have become immense pressures, which demand the appointment of an independent commissioner with the requisite powers to effectively address all these concerns and influence government policy.
I talked at some length in Committee about these increasing pressures as they affect the creative industries, and I will not repeat those arguments, except to add some conclusions from a survey to be published tomorrow by the organisation Freelancers Make Theatre Work—I am grateful for its permission to do so. It says:
“A striking headline in this year’s data is that 44% of respondents earned less than the 2024 UK National Living Wage in the 23-24 tax year … a significant worsening of the already critical situation from the previous year … where the equivalent figure was 34%”.
It goes on to say:
“These levels of pay would be illegal in salaried positions”.
I was worried by Chris Bryant’s recent evidence to the Culture, Media and Sport Committee, in which he said that he wants to see a reduction in the number of freelancers over the next 10 years. My understanding was that he is thinking about workers such as his mother, a make-up artist for the BBC, who lost their salaried jobs and were pushed into becoming freelancers. However, this is but one part of the landscape, and this exclusive emphasis ignores all the other freelancers, many of whom are creators—artists, writers, composers and many others—for whom there never has been any option other than being a freelancer for the work they do. Again, we need to understand the whole landscape—the reality of that landscape and the ecology of that landscape.
It becomes difficult to imagine how effective a champion with close proximity to the DCMS will be if the DCMS is actively trying to reduce the total number of freelancers—something it ought to be agnostic about. We need an independent commissioner—in other words, someone in a position of authority—who will support and, importantly, promote the practice of freelance work. We need it in law; we need it in the Bill. I beg to move.
Lord Clement-Jones (LD)
My Lords, it is extremely disappointing that we are debating something of this order of importance at this time of day and at the fag-end of this Bill. However, unusually, I shall try to ingratiate myself with the House by being as brief as possible.
First, I want to thank the noble Lord, Lord Katz, for his letter of 30 June and for the publication of the draft terms of reference for the freelance champion, referred to by the noble Earl, Lord Clancarty, who set out the stall extremely cogently for these amendments. I do not need to go over the ground that he has explained extremely well. The lack of a single clear voice representing the interests of freelancers to government is what this is all about—a clear definition of what a freelancer is and clear duties for the freelancer commissioner.
The freelance champion has some similar characteristics to the freelance commissioner, but there are significant differences from the independent freelance commissioner. It is not going to be a statutory office, unlike the freelance commissioner. The structure proposed in our amendments would be more permanent and more independent of government. The terms of reference explicitly state that the champion will focus on freelancers working in the creative industries only, so it will not be cross-sectoral. As we heard from the noble Lord, Lord Londesborough, it is clear that freelancers are extremely prevalent not only in the creative industries but in many other industries as well, including construction, professional, scientific and technical activities, business support, health and social work, IT, digital services and education and training.
While welcome, the freelance champion for the creative industries under the sectoral plan does not go nearly far enough across the board in making sure that there is a real advocate and one with teeth who is able to influence policy towards freelancers across all those different sectors. The question really is why the Government have failed to grasp the urgency and widespread nature of the challenges faced by freelancers across all sectors. It is not unclear that freelance work covers much broader areas than just the creative industries. These amendments would offer recognition to a workforce that contributes enormously to our economy and cultural life and is too often unprotected and unheard in legislative terms.
I urge the Government, even at this time of day and at this time in the Bill, when they cannot really change their approach, really to think about this. We have heard so much about how, on AI or dependent contractors, the Government are considering these things. They really need to shape up in terms of the modern economy. Freelancing is on the increase and they need protection—and the freelance commissioner would be by far the best way forward.
Lord Freyberg (CB)
My Lords, it is a pleasure to follow my noble friend Lord Clancarty and the noble Lord, Lord Clement-Jones, who have each set out the case for a more coherent and strategic approach to freelance policy with great clarity. I shall not repeat their arguments but will attempt to build on them.
I support Amendments 160 to 162, to which I have added my name, and I will speak to my own Amendments 163 to 165. I declare my interest as an artist member of DACS, the Design and Artists Copyright Society.
Viscount Colville of Culross (CB)
I declare an interest as a freelance television producer. Although I was not able to add my name to Amendment 160, my support for it is undiminished. Fortunately, I was able to add my name to Amendment 161, which I know would also give much needed clarity to freelancers.
Much of the creative industries’ employment, particularly in television, is in crisis. Hundreds of thousands of people working in the industry are unemployed, and many of them are freelance. Action needs to be taken now to protect some of the most skilled and experienced talent in this country. They need support in legislation, and urgently. The actions suggested in Amendments 160 and 161 would go some way to help their predicament.
Like my noble friend Lord Clancarty, I support the Government’s creative industries sector plan, which will set up a creative freelance champion. I welcome the Government saying that the champion’s role will be developed in discussion with industry. However, I have spoken to freelance advocates in various sectors of the economy and they all say that the champion’s powers need to be laid down in the Bill if they are to be effective.
I echo my noble friend Lord Clancarty in his concern about the powers of the champion. As it stands in the industrial strategy document, the champion will be giving out advice, which might make the Government feel good but will not definitively improve the lot of freelancers.
My fear is that the new champion will be nothing more than a data collector, whereas the problems of freelancers need to be addressed with decisive legislative powers. Their success will come down to the powers they wield. Noble Lords have only to look at the Office of the Small Business Commissioner. The outgoing commissioner, Liz Barclay, has done extraordinarily well as a vigorous campaigner for small business, but she has limited powers to mediate. She cannot make decisions, nor take enforcement action. I believe that proposed new subsection (6), to be inserted by Amendment 160, especially paragraph (b), would be some remedy when setting up the freelance commissioner.
The Good Work Review sets out a whole series of commitments to the self-employed, including badly needed strengthening of their rights to a written contract, action to tackle late payments, and extended health and safety protections, all of which are obstacles faced by freelancers and many of which cannot be tackled by the freelancer themselves without damaging their reputation and limiting their careers. Amendment 160 would give specific powers to the freelance commissioner to deal with this problem.
If the Government are not going to accept this proposal for a commissioner, I press the Minister on what kind of action can be taken to implement effective solutions in these areas. I am particularly exercised over the area of contracts. How will the new champion examine the myriad contracts in existence and the variety of issues they tackle? For instance, many freelancers are asked in their contracts to opt out of the Working Time Regulations so that they can work up to 15 hours a day and, on some days, 18 hours a day. This trend is increasing in the current climate of diminishing budgets and ever-tightening schedules.
This plays into one of the most pressing issues for freelancers: health and safety. Many big film and television productions set up discrete, single-vehicle companies solely for the period of the production. They often do not have an HR person or anybody who is concerned specifically with health and safety. These vehicles are dissolved once the production has ended so that there is nobody with long-term responsibility for what happens to a production team. As a result, so many companies create schedules in which 15-hour working days are becoming the norm, rather than the exception, as used to be the case. A freelance commissioner should be able to examine and stop these abuses.
The commissioner also needs to examine the financial issues faced by freelancers. The nature of their work has the advantage of flexibility and variety, but many disadvantages when it comes to pension provision. Most are covered when in work, but often there are lacunae between contracts which leave freelancers with poor pension provision. A commissioner needs to be able to sort out a hybrid pension product, like a lifetime ISA. This would give an option of adjustable contributions or those that could be paused, or consolidating retirement savings into a single annual event.
Just as importantly, the commissioner would need to champion professional career development. At the moment, there is so little training or continuous career development for freelancers. Successful training programmes would create qualified and technical staff for the industry. The solution should include tax relief, with a structural cap on expenses relating to career development.
Part of the problem in protecting freelancers is defining who they are. So many production workers operate on non-permanent contracts. They are technically classified as self-employed, but their working conditions do not support the definition. They cannot negotiate the hours nor send substitutes in their place, nor operate with genuine autonomy. The creative industries sector plan lists a range of self-employed categories which could be covered by the freelance champion—these were mentioned by my noble friend Lord Freyberg.
This brings us to Amendment 161. The noble Lords, Lord Clement-Jones and Lord Freyberg, set out many reasons why this amendment is crucial to ensure that freelancers are treated properly. Definition is crucial in so many areas of work in the creative industries, which once again brings me to highlight the lack of health and safety enforcement for freelancers. The Health and Safety at Work etc. Act 1974 says there needs to be adequate training of staff to ensure that health and safety procedures are understood and adhered to. Unfortunately, so many independent production companies regard only their small full-time core teams as staff, and not the majority of the production team, who are freelance and treated differently. One result is that the production company pays only for the core team to go on health and safety courses, and the freelance staff are forced to pay hundreds of pounds to fund themselves to go on the same courses, which are essential for the safe delivery of the production. Even when the production company does pay for freelance staff to go on these courses, there are problems. I have spoken to health and safety course providers who say the productions have asked them to drop the module on long working hours.
If Amendment 161 is accepted, the confusion over what constitutes “staff” would be clarified. Freelancers have problems with the IR35 status when HMRC claims that the freelancer is employed and so cannot benefit from the tax advantages of being self-employed. It can take time for a freelancer to prove their status.
I know that the Minister and the Government are on the side of freelancers, but we need to make sure that the freelance champion can do so much more than just deliver warm words. A freelance commissioner would have clearly defined, effective decision-making and enforcement powers. Only then will many hard-pressed freelancers be properly supported.
Lord Parkinson of Whitley Bay (Con)
My Lords, I support the noble Earl, Lord Clancarty, and others who have tabled amendments, and I congratulate them on persevering to Report on this important issue. Like the noble Lord, Lord Clement-Jones, I think it is regrettable that it has come so late, towards the end of term, but this is an important issue.
I welcome what the Government have done in appointing a freelance champion and look forward to the impact that that will have. However, as noble Lords on the Cross Benches have said, the proof will be in the pudding about this person’s clout and purchase, and their authority to speak across Whitehall.
The noble Lord, Lord Freyberg, spoke about the anonymity of many freelancers in the creative industries and the arts, and the noble Viscount, Lord Colville, talked about the way that they lose out in terms of their employment rights, including in some very serious ways that affect their safety. I will add a few words about my perspective, having been a Minister at DCMS, to note how they also lose out in the conversations that are had in Whitehall. When ministerial round tables are assembled, it is very easy for officials to gather the employers or the heads of trade unions who can speak on behalf of large numbers of workers. However, it is very difficult to find somebody who can speak on behalf of all freelancers; they are a more nebulous and disparate group of people, and they lose out in the conversations that are sometimes had.
There needs to be the understanding, which noble Lords have expressed, that, in parts of the performing arts and the creative industries, people work as freelancers not because it is a career choice but because it is a structural necessity of having a career in these rewarding sectors. It is also the case, when we ask people to help advise the Government, to sit on advisory panels or to take part in government commissions, that, if they do not have the safety net of a regular employer, they are not able to give as much time as those who are in more structured forms of employment can. They are therefore also losing out in terms of feeding into the policy-making conversations there.
It is important that the voices of freelancers, particularly in the creative industries and the arts, are heard. The questions about the clout and purchase that the new champion will have—particularly about whether this person will be paid and have some authority—are important. I congratulate the noble Lords on continuing with this important set of amendments.
Lord Londesborough (CB)
My Lords, I promise to be very brief. I support all the amendments in this group.
The arguments are building for the establishment of an independent freelance commissioner, mainly because the number of freelancers is growing and will continue to do so in the face of increasingly adverse conditions for both employers and employees. The current 2 million freelancers could easily grow to 3 million within the next 10 years, as employers continue to shed staff from payroll because they are weighed down by increased NICs, national minimum wages in excess of inflation, and some of the onerous new rules and regulations coming along in this very Bill.
I have argued that we could broaden out the need for an independent commissioner for the self-employed—who total about 4.5 million in this country, and the number is growing—but I will leave that issue to the next group, as it is addressed by my noble friend Lord Freyberg’s Amendment 167.
In conclusion, freelancers offer a great diversity of skill sets and flexibility in an economy that is suffering from stagnation and rigidity. They deserve greater recognition, and I implore the Government to take the proposal for a commissioner seriously. I absolutely agree with the noble Lord, Lord Clement-Jones, that we do not want a toothless, woolly token champion; we need an advocate with teeth—let us hope that that is what we will see.
Lord Hendy (Lab)
My Lords, no one hearing the speeches of the noble Lords who have spoken could be other than sympathetic to the objects of the amendments in this group.
However, although it may seem churlish, I have a point on the definition of freelancers in Amendment 161. It is not a technical point; it is about the fact that another categorisation of workers would be added to the already complex pattern of the status of workers. I know that the Government intend to conduct a comprehensive review of the status of workers later, and the issue of freelancers will no doubt be addressed in that.
One issue affecting freelancers, as defined in the amendment, is the use of substitution clauses in workers’ contracts. Two points arise here; my noble friend Lord Berkeley will say a few words about one, and I will deal with the other. The issue is that the insertion of substitution clauses by employers can be used to deny self-employed workers, such as freelancers, all employment rights. The particular value to some employers of this device was established in the Deliveroo case in the Supreme Court in 2023, in which I had the honour, or perhaps the misfortune, of representing the union representing the workers.
The issue is that self-employed workers are by definition not employees, and so they do not have the rights of employees. But they could be what lawyers call limb (b) workers, with limited employment rights. In order to fall into that definition, such workers must undertake
“to do or perform personally any work or services”.
The delivery companies have realised that this condition could be defeated by the inclusion of a right to substitute on the part of the worker. Clearly, a legal provision that such a clause should not be a factor in the determination of personal service is needed, but doubtless that will be a matter for consideration in the Government’s review.
Lord Berkeley (Lab)
My Lords, I will just add a few words to my noble friend’s contribution. This little item that we are discussing came out of a debate we had in Committee when we established that there was a link between the small boats with what we might call illegal immigrants coming across the channel and the delivery vehicles, mostly bicycles with trailers and mostly in London, but in other places as well. There was strong evidence that the riders do not have permission to work in this country and have probably not passed any of the tests necessary for what they are doing. We all know what the problem is with these bicycles and trailers going around London: they seem to forget that there are things such as traffic lights and rules about keeping to the left.
Ministers were sympathetic, and we had a very useful meeting with the Ministers, for which I thank them. The real problem is that once one of these drivers has a job at one of the companies my noble friend mentioned, they can contact their brothers, sisters and cousins on the continent and say, “Why don’t you come across too? You can share the job”, which sounds fine. They spend the money and come across the channel, hopefully still safe and alive.
Once two of them are trying to do the same job as if one person, it gets very difficult. There is no easy solution to this, apart from—we had a very useful meeting with the Minister on this—adding the word “substitution” to many of the issues that noble Lords in the creative sector spoke about so well earlier. They are often substituting for their brothers and cousins but are still working without the necessary insurance, certification or anything else. I hope that when my noble friend the Minister comes to respond, she will look favourably on the idea of having a wider interpretation of the type of work we are talking about. Apart from people not paying their tax and everything else, hopefully there are not going be too many road accidents, but at the moment it is a little dubious.
I am grateful to other noble Lords who have listened to something that is 100 miles away from creative, but it is just as important. I look forward to the Minister’s response.
Lord Hunt of Wirral (Con)
My Lords, I do not believe that for a moment.
This has been such an important debate. I thank the noble Earl, Lord Clancarty, the noble Lord, Lord Freyberg, the noble Viscount, Lord Colville of Culross, and my fellow lawyer—not solicitor—the noble Lord, Lord Clement-Jones, for what has certainly been a long-standing advocacy on behalf of freelance workers. As my noble friend Lord Parkinson of Whitley Bay said, with all his experience as a Minister, there is no doubt that freelancers play a vital role in our economy and their interests deserve proper attention.
We on these Benches have also made the case that this issue is likely to become more urgent after the passage of the Bill. We cannot avoid the suspicion that the Bill is going to drive more workers into at least considering turning freelance. Time will tell, but as the noble Lord, Lord Londesborough, pointed out, the number could rise towards 3 million freelance workers.
We are all very grateful indeed to the Minister for organising an important meeting on this subject, because it was most useful. We welcome the Government’s intention to create a freelance champion, announced last month as part of the creative industries sector plan. That may be half a loaf, but it is a welcome enough commitment. We recognise the intent behind the amendment to establish a freelance commissioner, but at the moment, in the light of the assurances given by the Minister, we feel that the Government should have the benefit of the doubt for now, not least because we are not totally persuaded that the creation of another public body is the only solution.
What freelancers certainly need is clarity, simplicity and proportionate support. If the new champion can deliver that, all well and good. But we remain of the opinion, as came across in some of the contributions we had in Committee and just now, that socialists despise the very concept of freelancing. “How dare workers choose to avoid our elaborate structures?”, some of them say. So we will be watching with a very keen eye to see how this proceeds, particularly in the light of the speeches we just heard from the noble Lords, Lord Hendy and Lord Berkeley.
As we salute the expertise of the noble Earl, Lord Clancarty, on the creative arts, I take this opportunity to assure him that if he is unsatisfied that the Government’s measures adequately address the issues that have been raised, we will certainly be on his side. So I encourage him to remain vigilant and to keep the Government’s feet to the fire. In the meantime, we look forward with great interest to what the Minister will say in response to the many questions that have been raised in this debate, in particular about the urgency of this problem.
Baroness Jones of Whitchurch (Lab)
My Lords, I am very grateful to all noble Lords who have spoken in this debate. We have indeed had a very good debate, which once again has identified the significant contribution that the creative and cultural sector makes to our industries and our lives. The Government share your Lordships’ passion for supporting the creative and cultural sectors, and we previously spelled out in detail the significant work we are already doing in this area.
The creative industries and cultural sectors are a distinct part of the wider UK workforce. They have a significantly higher proportion of self-employed individuals, reflecting the sector’s entrepreneurial and freelance nature, which is one of the points that has been well made this evening. In the latest published data, as of 2023, there were 2.4 million filled jobs in the creative industries and 666,000 filled jobs in the cultural sector. Of these jobs, 49.6% in the cultural sector were self-employed, and 27.9% in the creative industries, compared with 14% of UK jobs overall. This reiterates the point that noble Lords have made about the significance of freelancers in the cultural and creative sectors. This flexibility not only drives innovation but supports the more project-driven nature of the creative industries. However, we also know that freelancers’ creative careers, while offering a more flexible and autonomous way of working, can also be precarious and come with lower job security.
The Earl of Clancarty (CB)
My Lords, I thank the Minister for that response, for the meeting that we all attended a few weeks ago, which was very useful, and, perhaps, for future meetings, because we want to know much more about what this champion will do. The Minister says that the champion will be independent. That is very interesting.
Three key themes have come out of this discussion. A number of noble Lords talked about whether the champion will be able to move between departments. This is really important. A number of noble Lords raised the question of visibility, including my noble friend Lord Freyberg and the noble Lord, Lord Parkinson, who talked about his insights into the visibility of freelancers. There is visibility and invisibility in a number of ways, which the Government must look at very carefully. There was also an interesting sub-debate from the noble Lords, Lord Hendy and Lord Berkeley. I was trying to work out how it fitted into the debate. It fits because this whole area is so interconnected. I take that on board.
Crucially, as we drafted in the amendments, the commissioner will have those powers and the authority to do what we worry that the champion will not be able to do and will be able to effect those changes. We wish the champion well. We hope that the champion will be able to do these things. This is an area that we will come back to, not least to see how effective the champion will be. For now, I beg leave to withdraw the amendment.
Lord Freyberg
“Report: freelancers, self-employed persons and sole traders(1) Within nine months of the day on which this Act is passed, the Secretary of State must publish a report setting out—(a) fixed definitions of the following categories of workers—(i) freelancers,(ii) self-employed persons, and(iii) sole traders,(b) an assessment of how the categories of worker in subsection (1)(a) may be impacted differently by the provisions of this Act, and(c) recommendations to ensure fair and equitable treatment of workers across the categories in subsection (1)(a).(2) The Secretary of State must lay the report under subsection (1) before Parliament.”Member’s explanatory statement
This probing amendment seeks to clarify how the Government defines freelancers, self-employed persons and sole traders, and to understand how this Bill may affect those categories of worker.
Lord Freyberg (CB)
My Lords, Amendment 167 is in my name and that of the noble Lord, Lord Londesborough, whose support I am extremely grateful for. I will also speak to Amendments 177 and 178. Many of my points are likely to coincide with those to be made by the noble Lord, Lord Moynihan of Chelsea, on his Amendment 184A. However, his amendment takes a much broader view of the employment landscape than I do. I look forward to hearing his speech, and that of the noble Lord, Lord Clement-Jones, who will revisit the definition of the independent contractor.
Amendment 167 is a probing amendment that draws attention to the lack of consistent and widely accepted definitions of “freelancers”, “self-employed persons” and “sole traders”. These terms are often used interchangeably but carry distinct legal and practical implications.
A helpful approach would be for the Government to adopt a three-tier taxonomy, defining “freelancer” as a person who provides services on a project or contract basis, often to multiple clients, without being an employee. Amendment 161 from the noble Lord, Lord Clement-Jones, serves as an effective model for this, notwithstanding the comments by the noble Lord, Lord Hendy. The annexe in the draft terms of reference for the freelance champion, which I have seen, like the noble Earl, has also attempted to define a freelancer, which is a useful first step but by no means definitive.
A self-employed person is someone who runs their own business and is responsible for its success or failure, typically registering with HMRC for tax purposes. According to July’s House of Commons UK Labour Market Statistics report, self-employed people make up approximately 13.5% of the labour market, which currently has 4.43 million self-employed individuals.
A sole trader is a specific legal and tax classification in which an individual runs a business in their own name without forming a limited company. Although all sole traders are self-employed, not all self-employed persons are sole traders, and some may operate through partnerships or limited companies. Freelancers may span both categories, depending on their business structure.
The amendment also asks for
“an assessment of how the categories … may be impacted differently by the provisions of this Act”.
This provides an opportunity to examine disparities in access to employment protections, financial services, taxation and eligibility for public support. For instance, while a sole trader may more easily access certain types of finance or insurance, freelancers working intermittently across sectors often face barriers in securing mortgages, pensions, sick pay and other forms of welfare.
A government report could use illustrative case studies to clarify the lived experience of these categories—for example, contrasting the experience of a freelance illustrator, a self-employed plumber and a sole trader café owner. To ensure fair and equitable treatment across these groups, the Government may wish to explore options for harmonising entitlements and protections where possible. This might include developing portable benefits for freelancers, expanding access to contributory social protections or encouraging the adoption of freelance codes of good practice. The Creative Industries Council’s freelance toolkit is one model that could be promoted across sectors.
Amendments 177 and 179 raise closely related concerns regarding the visibility and classification of workers in the visual arts and craft sectors. These sectors often involve individuals working across multiple roles, such as creators, educators, curators and consultants, and frequently combine freelance and part-time employment in complex ways. Employment and legal status in these fields is therefore especially difficult to define clearly, which can leave individuals underprotected or misrepresented in government data and support schemes.
The Government could respond by convening a time-limited working group with representatives from relevant sector bodies, such as the Artists Information Company, the Crafts Council, Heritage Crafts, CVAN, DACS, the Cultural Policy Unit and Creative UK, to develop practical guidance on employment classification in the arts and crafts sectors. This could be an initial task for the creative freelance champion to prioritise early in their role.
Both amendments also highlight the significant limitations in how current standard industrial classification, SIC, and standard occupational classification, SOC, codes capture creative labour. For example, SIC code 9003 for “artistic creation” groups together visual artists, authors, composers and digital designers, obscuring the distinct needs and contributions of each group. SOC codes similarly fail to disaggregate fine artists, applied artists and craftspeople.
I understand that government departments may use a threshold of approximately 4,000 practitioners as a cut-off point for counting people working in various sectors—if the Minister could clarify this, it would be most helpful—as this approach would exclude virtually all heritage craft makers from official statistics. The Red List of Endangered Crafts includes 285 crafts, but not all of them are covered by the current SIC and SOC codes.
Lord Clement-Jones (LD)
My Lords, I am going to be extremely brief because it is now 11.20 pm. We need to finish these proceedings at least before midnight, but that may be an ambition too far. I declare an interest, as I should have done in the last group, as chair of the Authors’ Licensing and Collecting Society.
It would have been extremely useful to have inserted the speeches of the noble Lords, Lord Hendy and Lord Berkeley, because that is precisely what my amendment is all about. It is about ensuring that our employment law ensures the rights of a growing segment of our workforce. Our current system is based on statutory definitions and case law, and it settled on three categories: self-employed; worker—also known as limb (b), as the noble Lord, Lord Hendy, mentioned —or dependent contractor; and employee. However, determining whether an individual falls within this framework is often inconsistent and reliant on lengthy and expensive court cases, such as the landmark Uber v Aslam case. The Minister has extremely helpfully undertaken a consultation on employment status, and that is exactly what this amendment was designed to provoke, so I feel that to a large extent we have succeeded in pushing the Government further towards defining that kind of employment status.
I have had some useful conversations with Evri, which engaged in a legal case when it was under the name Hermes. As a result of its engagement with the GMB, it has come forward with what I think is an extremely interesting and satisfactory form of dependent contractor status that grants certain rights as if they were employees, and that is precisely what I hope this consultation will come up with in terms of family leave, entitlements, the right to request fixed hours and so on. The GMB, while awaiting formal policy setting through its democratic process, has expressed a positive stance towards retaining and reforming the limb (b) worker status. So I hope that the consultation that the Government engage in will not try to force everything into two categories but will make sure that that third category is recognised and given enhanced rights.
I think there was some misunderstanding in Committee in what the Minister said. She talked about complications and so on, and I hope that does not mean that what we are all trying to get to is two categories, employment or self-employment. I hope that the result of the consultation will be to come forward with some kind of dependent contractor status for precisely the kinds of people that the noble Lord, Lord Berkeley, was talking about—however fast they may go on their scooters.
Lord Moynihan of Chelsea (Con)
My Lords, I rise to introduce at this late hour Amendment 184A in my name. I refer to my registered interests as an employer and investor. I thank the many noble Lords on the Labour Benches who have kindly stayed to hear the noble Lords, Lord Freyberg and Lord Clement-Jones, and myself; it is very decent of them. The noble Baroness, Lady Jones, kindly committed just now to publishing the Government’s consultation on employment status, which relates strongly to the amendments that the three of us have introduced to this clause, and it is very welcome to hear that commitment. For me, that takes us half way to what my amendment proposes.
The Minister’s focus just now was on freelancers, while that of the noble Lords, Lord Freyberg and Lord Clement-Jones, was on both freelancers and the self-employed. My amendment focuses on protecting the self-employed and the so-called middle worker status, in particular for so-called platforms, which I will elaborate on briefly in a minute. I do hope to get your Lordships out before midnight; I will do my best.
The Government’s make work pay document, part of their manifesto, has, as we all know, made various commitments—or threats, as we call them on this side of the House—relating to workers’ employment status. Some are included in the Bill and some are promised for an unspecified future Bill or other kind of regulation. In particular, the employment status of worker, a middle stage between self-employed and fully employed, as just described by the noble Lord, Lord Clement-Jones, and as decided in the ruling in the Uber case, is to be reviewed, and there is the threat that that category will be tightened or even abolished. To date, the Government have said little else about its future although, in the Bill we are discussing now, Clause 1 on guaranteed hours and Clause 2 on shift contracts both significantly constrain what an employer can agree with an individual holding worker status.
It is depressing to note how the Government’s financial and regulatory policies are already hitting employment—the very topic of this Bill—not just in traditional areas such as pubs and entertainment, but in those advanced sectors where the economy’s hope for the future lie: AI or gene modification, for example, and now, in this Bill, the platform businesses that drive the gig economy.
Take driver platforms. In surveys, 76% of drivers say being self-employed is the key attraction; 60% of them value flexible hours above all else, rising to 72% among working parents. Nearly nine in 10 use multiple platforms to earn a living, which would be near impossible if rigid employment frameworks were imposed. A strong entrepreneurial spirit runs through the sector: 34% already see themselves as entrepreneurs and 49% aspire to be.
Platform companies such as Bolt, which has 100,000 drivers on its books, are currently at sea as to what the rules will be. Will they, because of all this, be forced to offer full employment packages to those who would rather be flexible worker employees? Will this then increase the platform company’s costs and lead to layoffs, as more hours have to be offered to these workers, leaving fewer hours available to the self-employed?
My amendment seeks to get a commitment to a formal review of all this—and we just got that from the Minister—in order to ensure that the Government stand by their stated intent to consult fully, and I think that word is key, before changes are made. Platforms need to know what future employment categories will be allowed and how they will be defined because, one way or another, all of this will lead to their having to make very significant changes to their platforms. It is important that the Government have a full review and consultation before they decide on their detailed approach.
Platform companies can and must form a leading part of our future economy. As the noble Earl, Lord Clancarty, the noble Lord, Lord Clement-Jones, and others explained, as was the case with freelancers, so it is with platform workers. All employers and employees agree that, in these areas, flexibility is key and the Government have elsewhere committed to reducing, not increasing, inflexible regulation. This amendment seeks to hold the Government to that commitment.
Platform employers are investing hundreds of millions in their activities per country, per platform employer, in other countries around the world, yet are not doing so here in the UK. One platform company recently contacted me to say that they had withheld £170 million of investment from this country precisely because of this Bill and the threats it imposes on it.
We are falling further and further behind other modern economies, and it is precisely because of ever-increasing taxes and regulation, and the threat of more to come, from this and future mooted Bills. Removing the middle-stage worker status would both increase unemployment and deter further inward investment.
My amendment seeks to hold the Government to account on their promises to consult on the expected outcome of this part of the Bill, which the Minister has just done, and to figure out the likely impacts carefully in the hope that the most detrimental potential regulations might not be imposed. As we go into the summer break, we already see employment, particularly youth employment, plummeting. The NIC increases, the now very high minimum wage and the fear created by this Bill are causing employers to hold off further employment. All of this is leading to less and less hiring. I ask the Government to have pity on the employer, to have pity on the self-employed and indeed to have pity on our economy overall by agreeing to this, I hope, helpful amendment.
Lord Londesborough (CB)
My Lords, I will briefly speak to Amendment 167 tabled by my noble friend Lord Freyberg, to which I have added my name. It is a thoughtful, pertinent and probing amendment which—dare I suggest at this late hour—the Government should embrace with enthusiasm.
I say this because we have often heard during what I think has been 13 days of debate on this Bill that the Government want equal workers’ rights to apply across the board, whatever the size of the business or sector and whether it is private or public. Whenever I and others have argued for exemptions, especially for small and micro businesses, there is a proverbial bucket of cold water thrown our way, accompanied by the message “We don’t want a two-tier workforce”. That view appears to be shared by the Liberal Democrats. I respect that, but I do not agree with it as it fails to recognise the multitude of tiers in the workforce that already exist.
This brings me to Amendment 167, which points out that we have several very important groups of workers that do not belong to this single tier, specifically freelancers, the self-employed and sole traders. There are key differences between freelancers and the self-employed, many of whom are sole traders or running their own businesses or partnerships with just one or two contractors. However, they are all treated by HMRC as self-employed and taxed the same way.
As my noble friend pointed out, the overall number we are talking about is 4.3 million and growing; that is approaching 14% of the workforce. Given the current dynamics of the jobs market, with falling vacancies in particular, an increasing number look set to join their ranks—whether or not they want to. That is why it is incumbent on the Government to fix the definitions, understand the numbers and assess how they are being impacted by the provisions in this Bill. The Secretary of State should think through how to recognise and treat freelancers, the self-employed and sole traders.
Lord Hunt of Wirral (Con)
My Lords, this has been a very important debate about employment status. I thank my noble friend Lord Moynihan of Chelsea for his important and thoughtful contribution to the debate. I also thank the noble Lords, Lord Freyberg, Lord Londesborough and Lord Clement-Jones, for their extremely important contributions.
As my noble friend Lord Moynihan rightly pointed out, the Government in their make work pay document have committed to consulting on a simpler employment framework—one that distinguishes clearly between workers and the genuinely self-employed. However, the reality is that platform workers and the innovative businesses that rely on them remain in the dark. There is no detail, no timeline and no clarity as to when or indeed whether these major reforms to employment status will materialise.
In the meantime, uncertainty reigns, and that uncertainty is not without cost. It risks holding back investment, stifling expansion and deterring new entrants into the UK market. We now hear so often from the Government about making the UK the best place in the world to do business, but a failure to provide clarity on the future of employment status, particularly in the growing platform economy, sends the opposite signal. The Government would therefore do well to heed my noble friend’s intervention. If they are serious about supporting flexibility, entrepreneurship and modern ways of working, then they have got to provide both the sector and the self-employed with confidence and clarity on what exactly lies ahead.
Lord Katz (Lab)
My Lords, I wish I had also brought my white hanky to the debate, but sadly I do not have that cop-out. This been a short but focused and interesting debate. I will begin with Amendments 177 and 179, tabled by the noble Lord, Lord Freyberg. The Government are well aware of the importance of accurate occupational categorisation, especially for those in culturally important occupations, and the noble Lord and I have separately discussed this issue and the complexities around it.
More specifically, we understand that some stakeholders feel the four-digit standard occupational classification—SOC—system is not detailed enough for their needs. To address this, in 2023 the ONS published an extended six-digit system that includes more accurate categories for groups like those mentioned by the noble Lord in his amendments. In addition to this, the ONS is now beginning work on the next update to the SOC system, which will be published in 2030.
I am afraid that I do not have some of the details on disaggregation, the levels of qualifications and so on that the noble Lord, Lord Freyberg, asked about, but I will undertake to write to him with more details. However, I would be very happy to facilitate contact between the noble Lord and the ONS team that is responsible for this work. He has demonstrated great interest and no little expertise in this subject area, and I am sure that they would appreciate his views and detailed analysis on the system, how it could be improved and how it could better reflect the complex ecosystem of craftspeople and other creative workers.
I turn to Amendment 167, again tabled by the noble Lord, Lord Freyberg, and supported by the noble Lord, Lord Londesborough, as well as Amendments 183 and 184A, tabled by the noble Lords, Lord Clement-Jones and Lord Moynihan, respectively. I hope that the noble Lords are reassured from the debate on the previous group that the Government take the commitment to tackling pressing issues with the existing employment status framework very seriously—and from the comments of the noble Lord, Lord Clement-Jones, I think that is the case.
As the noble Lords, Lord Moynihan and Lord Clement-Jones, said, consultation in the fullest sense is imperative on this issue. It will allow us to receive and consider the widest range of views and engage fully with relevant stakeholders, including those mentioned by the noble Lord, Lord Moynihan, in his amendment. Consulting on employment status was a commitment in the plan to make work pay, and as my noble friend Lady Jones outlined to your Lordships’ House in the debate on the previous group, today we are confirming that we will publish a consultation on this by the end of the year. As the noble Lord, Lord Moynihan, said, we will risk undermining the value of this work if we introduce new definitions without prior consultation.
The noble Lord also mentioned requiring an impact assessment of any legislative proposals brought forward as a result of this consultation. I can reassure your Lordships’ House that, in keeping with our better regulation requirements, we will produce impact assessments alongside any such legislation.
I hope this assures noble Lords that the Government are committed to consulting on employment status and are doing so with the care, focus and full engagement that this important issue requires. On this basis, I ask the noble Lord, Lord Freyberg, to withdraw Amendment 167.
Lord Freyberg (CB)
My Lords, I am very grateful to all noble Lords who have contributed to this thoughtful and wide-ranging debate. In particular, I welcome the announcement of the employment status consultation, which will be very helpful in looking at this matter in the round. I also am very grateful to the Minister for his offer to put me in touch with the ONS; I would be delighted to accept that and take it up at a later point. Given the lateness of the hour, I will not comment further. I beg leave to withdraw my amendment.
Baroness Wolf of Dulwich
“Consideration of apprenticeships in consultations(1) In any consultation related to provisions in this Act, the Secretary of State must ensure that due consideration is explicitly given to the impact of such provisions on apprenticeships, specifically in relation to recruitment of young people by small and medium sized businesses.(2) For the purposes of this section, “small or medium-sized business” has the meaning given in section 7 of the Small Business, Enterprise and Employment Act 2015.”Member’s explanatory statement
This amendment seeks to ensure that the Secretary of State gives due consideration to the impact on apprenticeships in any consultation carried out in relation to provisions in this Act, such as the consultations proposed in the implementation roadmap: “Implementing the Employment Rights Bill: our roadmap to deliver change”, published in July 2025.
Baroness Wolf of Dulwich (CB)
My Lords, I will speak to Amendments 181 and 182 in my name and those of the noble Lords, Lord Aberdare and Lord Knight, and the noble Baroness, Lady Garden. I thank my fellow sponsors, and the noble Lord, Lord Londesborough, for so ably standing in for me in Committee.
Apprenticeship is central to this Government’s policies and to this country’s future. Yesterday, I had the privilege of being part of the Economic Affairs Committee’s annual session with the Chancellor of the Exchequer. One of the things she said—and I am quite sure truly meant—was that she wants more young people to get apprenticeships. Unfortunately, the Bill is likely to reduce, not increase, the opportunities for young people to become apprentices. I am absolutely sure that this was not intended by the Government, but we need to take note of it and start thinking fast about how to offset the impact.
Apprenticeship for young people is in a very poor state. As recently as 2008, 41% of apprenticeship starts were among young people aged under 19. This has now fallen to just 23%. Young people typically start off with what are called intermediate apprenticeships, but these are in decline too, both absolutely and proportionately—crowded out by higher apprenticeships, which are equivalent to university qualifications. The latest figures show a continuing drop, down from 162,000 intermediate starts in 2023 to 143,000 in 2024—that is a 12% fall in just one year.
Moreover, around half of our current starts now involve people who are over 25, and large numbers of these older apprentices were already working for their employer before they became an apprentice. This is especially true among the large employers, which account for a growing proportion of apprenticeships, whereas it is small employers which are more likely to take on young apprentices, and they who are decreasingly likely to do so. Moreover, the more deprived an area, the more likely it is that there will be no big employers— sure enough, the decline in apprenticeship numbers has been most marked in disadvantaged regions.
All this is happening against a background of many young people being in neither education, employment or training—NEET. I had seen a figure of one in 10, but the Chancellor yesterday referred to one in eight; whichever it is, it is far too many. So we need more openings for young apprentices. But there is a serious danger that the Bill will make large employers even more inclined to give apprenticeships to existing employees, with whose employment they take no risks, rather than hiring new young apprentices. Where employers do take on young people, they will play it very safe.
But what about the rest of young people? What about the young people who make up the growing number of NEETs? Small and medium businesses are the main employers of young apprentices. It is their apprenticeship recruitment which, as I have just pointed out and as was pointed out in Committee, has been plummeting in absolute and relative terms. Small businesses find our current apprenticeship regime burdensome and bureaucratic, and often too expensive: they do not have HR departments or lawyers on tap. At the moment, many feel under intense pressure, and business confidence figures reflect this. So, in this environment and in this context, giving young apprentices full employee rights from day one, with no provision of a probationary period, is a further turn of the screw. Taking on an untested young person is always risky, and the Bill would make it much more so.
I recognise that there is no simple way to make an exception for apprentices or to find a way that recognises that they are in key respects as much students as they are workers. Unfortunately, in this country, unlike many others, apprentices have no special legal status. In law they are simply normal employees who happen to have an apprenticeship training agreement. My noble friend Lord Aberdare highlighted this in his speech in Committee and, as so often, identified the key issue. This is still his last but one day, and at midnight it will become his last day in the House. He will be greatly missed.
At present it would be very difficult for the Government to make an exception for apprentices or treat them differently, and we need to change the situation as a matter of urgency and look to other countries’ apprenticeship laws for guidance. I also think that unless we get a clearer picture of how the Bill’s measures are impacting employers, especially small employers, we will not have a clear picture of exactly what needs to change and how. We need evidence and details, and that will enable us to see the best remedy. That is why we have tabled Amendments 181 and 182. I hope very much that the Minister will be able to respond positively and commit to monitoring the impact of the Bill’s measures, especially day-one rights, on employers’ willingness to employ apprentices, and especially on the situation with SMEs and young people. I beg to move.
Baroness Garden of Frognal (LD)
My Lords, it is very late and I will be very brief, but I want to associate these Benches with all that the noble Baroness, Lady Wolf, has raised. Apprenticeships should be for those starting out in working life. A level 7 apprenticeship is surely a contradiction in terms, but the perversity of the apprenticeship levy has meant that many employers choose to use their contributions on existing employees rather than face the possible problems and uncertainties of employing an untried and untested young person.
We need many more opportunities for employment for those young people who have been turned off by the academic programmes of schools. Many will have the very skills that the country needs but were not encouraged at school because the Conservatives stressed knowledge, not employability, and practical and artistic skills disappeared from many state schools.
The measures in the Bill for day-one rights for all employees will not encourage large or, particularly, small employers to take the chance on a youngster new to paid work. We have been encouraged by some of the words from Ministers, and we hope that they will look again at managing to exempt apprentices from these privileges and finding ways for employers actively to look for opportunities to enable the young not in education, employment or training to fulfil potential and make a contribution to the economy, instead of gearing up to a lifetime on benefits.
Lord Aberdare (CB)
My Lords, I put my name to the two amendments in the name of my noble friend Lady Wolf because I entirely share her concern that the Bill as drafted could have a damaging effect on apprenticeships, especially for young people and especially in small firms.
I am very grateful to my noble friend for her kind words, but I do not think that in this particular debate I would be greatly missed, because she and the noble Baroness, Lady Garden, have said everything that I could possibly have said—so I am not going to add a great deal to that. It is just as well that I did not choose 24 July as my departure date because, if I had, I would turn into a pumpkin at midnight and apparently we would have to adjourn the House for me to continue my speech—it has been done in the past.
I very much welcome the fact that the Government are undertaking some important consultations in this area, including on employment status. It is very important that they should look at the issues impacting apprenticeships for young people and in small firms, and they should, I hope, come up with some evidence for what sort of action might be needed to address those issues and prevent the kind of impacts that my noble friend described. That may well involve recognising, as so many other countries do, the fact that apprenticeships are a different form of employment from other forms and involve commitments on behalf of both the apprentice and the employer that will make undertaking particularly the day-one employment rights much harder to live with for the small firms involved.
With that, I encourage the Government to look very seriously at this and to consider the possibility of a separate legal employment status for apprenticeships. I will look forward to some sort of positive response from the Minister before I turn into a pumpkin—or wave a white flag, like the noble Lord, Lord Goddard.
Lord Goddard of Stockport (LD)
My Lords, very briefly, I was a bound apprentice for four years, from when I was 17 or 18 on a council estate outside Greater Manchester. Apprenticeships are a little jewel in the employment Bill that have somehow been missed. We need to advocate the opportunities for apprentices and the pride that apprenticeships give to young people, especially NEETs, and there should be no one better to do that than a Labour Government who are trying to generate income, prosperity and jobs. There is a little place there and, with more consultation—I have spoken to Ministers, who are mindful to be supportive of that—if we can get this right for apprentices and take away the obstacles to creating apprenticeships, more people will take them on.
Apprentices tend to stay with a company. If you are an apprentice and you have been trained for three or four years, you will tend to stay with that company and repay the loyalty they have given you in giving you a skill that will carry you through your life. So we support the sentiment and hope that the Government will say some kind words tonight, at least to stop the noble Lord disappearing at midnight and looking for Cinderella’s glass slipper.
Lord Sharpe of Epsom (Con)
My Lords, there is really very little to say, but obviously I thank the noble Baroness, Lady Wolf of Dulwich, for bringing forward this very thoughtful and necessary amendment. She is right that apprenticeships represent one of the most important pathways into skilled employment and a vital investment in our nation’s future workforce. I agreed with everything that the noble Baronesses, Lady Wolf and Lady Garden, and the noble Lord, Lord Aberdare, said, and I wish the noble Lord well. I hope that the noble Baroness, Lady Wolf, gets the reassurance that she needs and, if she does not, she should probably test the opinion of the House.
Lord Leong (Lab)
Good try.
My Lords, I am grateful to all noble Lords who have spoken. On behalf of these Benches, I wish the noble Lord, Lord Aberdare, all the best for his forthcoming retirement, which is not today; it will be on 31 August. We wish him well and he will definitely be sorely missed in this House.
I will address the amendments tabled by the noble Baroness, Lady Wolf of Dulwich. Amendment 181 proposes to insert a provision in the Bill to require that the Government give due consideration to the impacts on apprenticeships during consultation. Amendment 182 proposes a review process specifically on the impact on apprenticeships. Although these amendments rightly raise the importance of apprenticeships, they effectively duplicate what we are, and will already be, doing.
We know that our country’s greatest asset is its people, and apprenticeships are one of the most powerful ways, as stated by the noble Lord, Lord Goddard, that we can invest in that potential. They open doors, build confidence and provide a ladder of opportunity for those who might otherwise be left behind. Whether it is a young person taking their first step into the world of work or someone retraining for a new career, apprenticeships offer a route to success that is both practical and aspirational.
We are transforming the apprenticeship levy into a new growth and skills levy, giving learners and employers more flexibility. This will fund shorter apprenticeships and open up more tailored, responsive training options compared with the current system, where apprenticeships must run for at least 12 months. When we launch the consultations as described in the road map, every effort will be made to ensure that the consultations reach a wide audience. The Government are keen to hear from employers of all sizes and their representative organisations, as well as workers and their representative bodies, in order to understand the distinct perspective of these different stakeholders. They will play a crucial role in policy development. In developing options in our consultations, the Government will consider their potential impacts. The options analysts will, as is standard, consider the impacts on the labour market for different groups of workers and micro, small and medium businesses.
In addition, the road map shows that full implementation of the Bill will take years, so seeking to publish a review too early would prevent meaningful assessment of its effects, especially on young people.
The Government value apprenticeship, as I said earlier, and apprentices. We want to continue to engage with businesses that offer apprenticeship and encourage their contributions to forthcoming consultations, including on employment status, under the Bill. We will be happy to continue to engage with and meet the noble Baroness, Lady Wolf, to that end, and to listen to all young people and apprentices themselves.
These amendments are unnecessary and duplicative. Supporting young people and small businesses will already be at the forefront of our minds as we work to implement our reforms. I therefore respectfully ask the noble Baroness to withdraw Amendment 181.
Baroness Wolf of Dulwich (CB)
My Lords, I thank the Minister for his words and definitely accept the invitation to continue to talk to the Government about this issue and about how we might improve the current legal framework so that it encourages apprenticeships in a much more positive way. I totally accept that the Government are doing a large number of consultations already, and I am delighted to know that in that context the Minister thinks that our amendments are unnecessary, since that would imply that they are definitely going to look at apprenticeships. On that basis, with thanks, and looking at the time, I beg leave to withdraw the amendment.
“Review of the impact of high temperatures on workplace health and safetyWithin 12 months of the day on which this Act is passed, the Secretary of State must publish a review of the impact of increasing temperatures on workplace health and safety.”Member’s explanatory statement
This amendment seeks to ensure the Government is considering the impact of increasing temperatures due to climate change on the safety and health of workers.
Baroness Bennett of Manor Castle (GP)
My Lords, aware of the hour, I begin with a promise that I will not test the opinion of the House, although I am afraid that I cannot speak, of course, for the numbered amendments after this one.
Just to explain very briefly—it is fairly self-evident—my amendment calls for a new clause to review the impact of high temperatures on workplace health and safety. Of course, this is in consideration of the rising issue that this presents for the rights of workers in the climate emergency. I did not table a comparable amendment in Committee. I tried to table a broader amendment which was ruled out of scope and I never managed to get back to it, but I feel it is really important to bring this amendment here today, in light of events between Committee and Report.
Noble Lords may be aware of a novel by Kim Stanley Robinson called The Ministry for the Future, which features a mass mortality event as a result of extraordinary high temperatures and humidity. If we ever get to that stage in Britain, we will be beyond deep trouble. None the less, what we have just experienced at the end of June is what one expert described as a “quietly devastating” heatwave across Europe, which killed 2,300 people in 12 major cities and, it is estimated, will have caused several hundred deaths in London alone. The climate emergency means that, through that period, the temperatures were four degrees higher than they would have been otherwise, and one of the important things that has happened is that we have seen a large increase in so-called tropical nights, when the temperature does not drop below 20 degrees centigrade, people struggle to rest and that then has a cumulative effect on workers’ health.
We have not just seen the heatwave. We have also seen the TUC launch a large-scale, serious campaign to ask the Government to look at this and, in fact, to go further and set a maximum working temperature. It is worth stressing that, unlike other countries such as Spain—which might not surprise noble Lords—and Germany, we do not have a maximum working temperature. There is an obligation on employers to provide a safe workplace, but without that maximum temperature, and with circumstances arising that neither workers nor employers have encountered before, we really need to set some guard-rails for the safety of workers.
The TUC did a recent study on this and produced some horrifying examples, starting with what is happening in schoolrooms. It surveyed almost 6,000 teachers; some 94% reported they worked in excessively high temperatures during the summer, with 42% doing so regularly. A union rep reported on 27 telephone exchanges, in which the highest temperature was 36 degrees centigrade. A chicken factory reported high temperatures leading to incidents of tiredness and dizziness in a place where there was a lot of hard physical activity—that sounds like hell. In tissue culture and virology rooms, the temperature was 32 degrees and the room was full of ethanol fumes, which is another issue all to itself.
I am acutely aware of the hour, but I hope I will hear from the Minister that this is something that the Government will look at very seriously and consider the TUC’s call for a maximum temperature. That would obviously vary according to the circumstances. When we think about working outside, we have the issue of sun exposure, which also has longer-term risks for health and skin cancer, et cetera. I hope that I will hear something positive from the Minister and that the Government will take this seriously, listen to what the TUC is saying, acknowledge that the climate emergency is making this a fast-rising problem and take action. I beg to move.
Baroness Jones of Whitchurch (Lab)
My Lords, I am grateful to the noble Baroness, Lady Bennett, for tabling Amendment 184B.
We recognise that workplace temperatures are changing, especially as the climate changes. We are committed to ensuring that workplaces are safe in the modern world, and we committed in Next Steps to Make Work Pay to look at how to modernise health and safety guidance for extreme temperatures.
The Health and Safety Executive is Britain’s national regulator for workplace health and safety. It is dedicated to protecting people and places, and helping people lead safer and healthier lives. To deliver on our commitment, the HSE is reviewing the approved code of practice for the Workplace (Health, Safety and Welfare) Regulations 1992 to ensure it is fit for purpose for a modern workforce. This includes monitoring emerging evidence around the impact of extreme temperatures on workplaces. The HSE will bring forward detailed proposals on workplace temperature in due course and there will be an opportunity to comment, which I encourage the noble Baroness and others to respond to.
I assure the noble Baroness that the workplace regulations currently require that, during working hours, the temperature in all workplaces inside buildings should be reasonable. All employers must make a suitable assessment of the risk to employees and take action where necessary. This includes assessing the risk from heat stress. The Environment Agency has also issued guidance on how employers can plan for climate change impacts to their sites of work and integrate climate change adaption into their management systems. Nevertheless, I hope this broad scope of work, which is currently under way, provides the noble Baroness with the reassurance that this is a matter that we already recognise as important, and that we are actively taking steps to address the impact of increasing temperatures on health and safety at work.
Before we conclude this group, my noble friends Lord Leong and Lord Katz and I would like to thank your Lordships’ House for the extensive and energetic debates that we have had throughout Report, as well as its continued engagement and scrutiny. Indeed, we have held over 50 engagements with noble Lords since the Bill came here from the other place, excluding the debates here in the Chamber.
This Bill will benefit 15 million people—half of the UK workforce. We were elected with a manifesto commitment to make work pay, and the Bill is a vital step in delivering that commitment. With that, I ask the noble Baroness, Lady Bennett of Manor Castle, to withdraw Amendment 184B.
Baroness Bennett of Manor Castle (GP)
My Lords, I thank the Minister for her response. The problem is that words such as “reasonable” and “assessed risk” refer to what may happen in well-regulated, well-controlled workplaces; in contrast, it is the most vulnerable workers who are the most vulnerable to that not happening. However, many of the cases I cited were very mainstream workplaces, such as schools.
As promised, I will withdraw my amendment. Before doing so, I finish with an apology to the staff. We should give thanks to them for supporting us right through the Bill and throughout all the time it has taken. I also note that we should think about the impact of heat on their health and well-being in our workplace. We might want to think, as employers ourselves, about what reasonable adjustments we might need to make for them, as the temperatures in this workplace change. I beg leave to withdraw the amendment.
Lord Katz (Lab)
My Lords, with thanks to the clerks, the doorkeepers and all the staff of the House for staying so late, I beg to move that the House do now adjourn.