Employment Rights Bill

Debate between Baroness Bennett of Manor Castle and Lord Leong

Report stage
Monday 21st July 2025 Lords Chamber

[Baroness Bennett of Manor Castle (GP)]

My Lords, Amendment 127A in my name is a milder attempt to deal with the pressing issue of pay inequality and soaring executive pay in our society than the amendment I tabled in Committee, which was to provide for a 10:1 maximum pay ratio for enterprises. I hope this one has a slightly less inflationary impact on the blood pressure of the noble Lord, Lord Hunt of Wirral, while dealing with the excessive boardroom remuneration referred to by the noble Lord, Lord Monks, two groups ago.

The amendment simply seeks to put in the Bill a review of the impact of pay inequality in large enterprises, as defined by the Companies Act 2006—those with net turnover of more than £54 million, assets of £27 million and more than 250 employees. I hope that the Government will seriously consider this approach. It is not my intention to put this to a vote, but I want to be helpful to the Government here and offer them some constructive ways forward.

The noble Lord, Lord Katz, in part made the argument for this amendment for me in Committee when he said that:

“It is right that companies should be sensitive to wider workforce pay when setting pay for those in the boardroom and other senior leadership positions”.—[Official Report, 24/6/25; col. 201.]


However, suggesting that companies be sensitive is not really going to do it. That seems to be the Government’s position. I noted that the Water Minister, Emma Hardy, on LBC this morning, urged water company bosses to “read the room” and refuse huge wage hikes. Well, the room has been sending a very clear message about water company bosses’ pay for a long time and the voluntary approach has simply not worked.

We are talking here about the right of lower-paid workers not to be disrespected—insulted—by the soaring pay in the boardroom while they struggle to meet their basic needs, pay their bills and put food on the table. This is action that clearly needs to be taken, not just words of gentle encouragement.

As I said in Committee, the security and catering company Mitie, with a 575:1 ratio between its top-paid employee and the median employee, and a large number of low-paid workers, tops the High Pay Centre’s FTSE 350 companies hall of shame. I note that this month, the Labour Party postponed a London drinks reception for north-west MPs sponsored by Mitie after a backlash over the company’s employment practices. Unison had planned to picket the event. You have to question why it was ever planned in the first place.

A review such as the one proposed in the amendment could be a start towards the Labour Government generating policies such as those recommended by the High Pay Centre in its useful list of proposals—I recommend it to Ministers as a crib sheet, since the current Government were elected with so few policies of their own in place—such as all-employee profit-sharing or share ownership schemes. As the centre notes:

“One of the reasons why … the pay ratios between workers and CEOs are so wide is that CEOs receive large share-based payments in addition to their regular salary while workers do not … In France all companies are required to share an element of profits exceeding a set amount calculated using factors including taxable profits, net equity, wages and added value with their workforce”.


This has actually reduced inequality.

Another timely proposal from the centre, which again a review might throw up, is a cap on CEO-to-worker pay gaps for public service providers, such as water companies—here we have another way forward—or social care providers. The claim made by the noble Lord, Lord Katz, in Committee, that high pay means

“companies can compete for the best business talent in the UK and globally”,—[Official Report, 24/6/25; col. 202.]

certainly does not stack up in the water sector, if one looks at its outcomes. Fat cat pay has delivered only underinvestment, pollution and ill health for those unfortunate enough to have to rely on the services of the privatised companies.

Finally, I note that, responding to the call for even higher executive pay from the UK capital markets task force—drawn from the City of London and big business—a letter written by 20 leading academics specialising in executive pay, corporate governance and economic inequality made a number of points, including that there is a very “questionable” link between

“higher executive pay and better business performance”,

that any claim that there is a

“shortage of capable candidates for executive roles should … prompt scrutiny of companies’ leadership training and development processes”,

and that the “opportunity costs” of high top pay have impacts

“in terms of … pay for low and middle income workers or investment in the business”.

It is interesting that polling by the High Pay Centre suggests that the overwhelming majority of the public think that CEOs should not be paid more than 20 times more than their typical employee. If the Government want to consider the politics of this, I point to the conclusions in the report, The Spirit Level at 15, by Professors Kate Pickett and Richard Wilkinson, which articulates many of the ways in which inequality strengthens far-right politics. Executive pay is only part of that story, but it is a very visible part. This amendment offers the Government a way forward to start to tackle that political problem, as well as the economic and social issues. I beg to move.

[Lord in Waiting/Government Whip (Lord Leong) (Lab)]

My Lords, I thank the noble Baroness, Lady Bennett of Manor Castle, for tabling Amendment 127A. Although it rightly raises the important issue of pay inequality, it effectively duplicates a review process that we are already undertaking.

It is undeniable that average salaries have stagnated. In fact, they have barely increased from where they were 15 years ago. Had wages continued to grow at the rate seen prior to the 2008 financial crisis, the average worker would now be over 40% better off. This is not just about stagnant wages; it is about persistent and deep-rooted inequalities.

The UK’s income inequality remains above both the OECD and G7 averages. In the financial year 2022-23, the richest 20% of the population received 44% of the UK’s gross income, while the poorest 20% received just 7%. The OECD has noted that higher inequality can lead to underinvestment in human capital and slower adoption of new technologies. It estimates that rising inequality between 1990 and 2010 resulted in UK output being nearly nine percentage points lower than it might otherwise have been.

As I said on day 2 on Report, in one of the world’s wealthiest nations, workers are still turning to food banks. Many cannot afford rent, let alone a mortgage. Morale is at rock bottom and motivation is vanishing. The noble Baroness is right: executive pay keeps climbing. In 2023 the average FTSE 100 CEO earned 118 times more than the median UK worker, up from 50 times in the late 1990s. This is not sustainable or fair.

The UK exhibits greater regional disparities in productivity, pay, educational attainment and health than many other developed nations. This Bill, by benefiting lower-paid employees most, will help reduce these disparities, not only in terms of income but in the quality of work experienced. Supporting this, analysis published in 2019 by the World Bank found that employment protections can play a significant role in reducing income inequality.

As I have previously outlined, we already have robust monitoring and evaluation mechanisms in place. By reinforcing the framework that supports our workforce, we are making work more secure and predictable. We are also putting more money into the pockets of working people by making wages fairer. I therefore respectfully ask the noble Baroness, Lady Bennett of Manor Castle, to withdraw Amendment 127A.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I thank the Minister for his answer, although I have to express disappointment that none of the other Front Benches wanted to engage with the issue of high pay. The Minister very much acknowledged the issues around low pay and talked about robust monitoring and evaluation of high pay, but he did not speak about any action on it nor even about any plans for action on it. We have a real problem with the inequality that has seen those executives’ salaries—those fat cat salaries—rise and rise. As I said in my introductory remarks, there is an opportunity cost where those resources are going to that, as well as, of course, the sense in society that there is a deep unfairness and the Government are not doing anything about it.

I remain disappointed. This is certainly an issue that I and the Green Party will continue to work on but, in the meantime, I beg leave to withdraw the amendment.

Product Regulation and Metrology Bill [HL]

Debate between Baroness Bennett of Manor Castle and Lord Leong

Consideration of Commons amendments and / or reasons
Thursday 10th July 2025 Lords Chamber

[Lord in Waiting/Government Whip (Lord Leong) (Lab)]

My Lords, I beg to move that this House do agree with the Commons on Amendment 1. With the leave of the House, I will also speak to Amendments 2 and 3.

On Amendment 1, the Government have been clear in their intention to maintain strong, co-operative relations with the devolved Governments and to ensure that the devolution settlements are respected in both principle and practice. This amendment, which the Government introduced in the other place, inserts a new clause that would place a statutory requirement on the Secretary of State to obtain the consent of the devolved Governments where regulations contain provisions within their devolved competencies. This amendment goes further than the amendments tabled during the passage of the Bill through this House, which provided only a consult mechanism. This amendment provides for a consent mechanism, with a decisive role for devolved Ministers. It will also underpin continued collaboration to develop product regulation to best support businesses and consumers in all parts of the United Kingdom.

I thank the noble and learned Lord, Lord Hope, whose knowledge in this area I have found extremely beneficial and helpful. He is not able to speak today, but I met him on 17 June and he is happy for me to say that he is pleased with the Government’s approach to devolution in this Bill. I thank him for his engagement and contributions during the passage of this legislation. I also thank the noble Lords, Lord Sharpe and Lord Wigley, the noble and learned Lord, Lord Thomas, and the noble Baroness, Lady Brinton, with whom I have engaged on this amendment. With this specific context in mind, I am pleased to inform the House that the devolved legislatures have all granted legislative consent Motions to the Bill. I thank ministerial colleagues and officials in the devolved Governments for their engagement and collaborative approach to the Bill.

Amendments 2 and 3 are technical amendments. The first deals with a technical correction to the drafting of the Bill, and I will briefly outline the need for it. The amendment makes a drafting change to Clause 12(4). This clause lists the regulation-making clauses in the Bill that are subject to the affirmative statutory instrument procedure. The previous drafting includes Clause 9 in the list, which was an unintended consequence of the previous amendment inserting Clause 9 into the Bill. Unlike the other types of provision specified in Clause 12(4), Clause 9 does not confer a power to make a particular type of substantive provision. Rather, it specifies that regulations can amend existing provisions distinct from making fresh regulations. This technical amendment removes this unintended impact by removing the reference to Clause 9.

On the final technical amendment, the House is aware that the Government have been clear that the Bill will ensure that we have the ability to deliver an effective product regulatory regime in the United Kingdom. The amendment the Government made in the other place is a necessary technical amendment to correct an amendment that was inserted at Lords Third Reading to ensure that the powers in the Bill can be used effectively, such as by introducing cost recovery provisions in accordance with Clause 8. I beg to move.

[Baroness Bennett of Manor Castle (GP)]

My Lords, briefly, I welcome Commons Amendment 1. It is very pleasing to see this Government, in contrast to the last Government, acknowledging that we have nations on these islands which have devolved powers that need to be respected. Indeed, when we are talking about the standards here, hopefully there is an understanding that devolution can also mean divergence in terms of democratic choices. Within the sometimes unfortunate limits of the internal market Act, Scotland, Wales and Northern Ireland should be able to lift to higher standards if that is what they want, and I hope this will help to facilitate that.

Since I am on my feet, I will make just a couple of short remarks, having been heavily involved in the Bill. I want to again thank the Minister and his team for the time that they gave for discussions with me about the Bill. I reiterate what I said then and stress to the Government that I hope they will keep three points in mind as this becomes law and it starts to be implemented, because most of this will not have any impact until we have the regulations.

First, where we are now is way behind the best global standards. This is an area where we should be talking about being world-leading for the health of our nation and of our environment. Secondly, I would like the Government to acknowledge that we are already on a poisoned planet and in an environment where our water, soil, air and indeed our food and our homes are saturated with far too many chemicals and other substances that are damaging to our health and, again, to environmental health. Thirdly, we have to start to consider the cocktail effect. With most of the testing of products, when companies go to put this product or that chemical into the environment, they say, “Look, what’s the safe limit for this product?” But all of our bodies, our young people and our environment are being exposed to rising levels of microplastics, pesticides and PFASs—all those chemicals and products—and when we consider what is allowed for the future, we have to remember that it is going out into that already poisoned environment.

UK Modern Industrial Strategy

Debate between Baroness Bennett of Manor Castle and Lord Leong

Monday 30th June 2025 Lords Chamber

[Lord Leong (Lab)]

The noble Lord may say that about the Employment Rights Bill, but I speak to many businesses and many of them do more than what that Bill does; but that is a conversation for another day.

The whole landscape is changing. We have to be responsive to that, and we are not leaving any sectors behind.

[Baroness Bennett of Manor Castle (GP)]

My Lords, in its introduction, the industrial strategy says that

“we live in a world dominated by the rise of superstar firms, whose success spills over to the wider economy”.

It seems that the Government are adopting a trickle-down theory of business, but is this not assuming a future that looks like the past two decades? It has been an era of cheap, abundant financing for firms that have often burned through enormous sums of money—money used to force competitors out of business and to buy out genuine innovators and swallow them up, or squash them, not to deliver genuinely productive, useful, substantive products and services.

This is the idea of the unicorn: a biased picture of entrepreneurship that favours valuation over value creation. This is the model that has given us the massively unequal, deeply unstable society we have today. Surely, we cannot keep going the way we are. It has got us to the disastrous point we are now at.

[Lord Leong (Lab)]

I do not quite agree with the noble Baroness. At the end of the day, the Government have to make a choice. We have identified the top eight sectors that we will support with this strategy going forward. At the same time, other industries will also benefit from the support because of its roll-on effect. Yes, ideally, we would like to support every sector, but we need to pick and choose. It is just like running your own business: you pick and choose who your customers are and you work with them, but you still serve everybody.

The industrial strategy focuses on eight sectors, but other foundational sectors will also be supported through the various plans set out in the strategy.

Corporate Liquidations

Debate between Baroness Bennett of Manor Castle and Lord Leong

Tuesday 10th June 2025 Lords Chamber

[Lord Leong (Lab)]

Apologies; it is 0.7% growth. I thank the noble Lord for that. At the end of the day, what is really important is that we have to support businesses, and the Government are supporting businesses. Capital gains tax is still the lowest in Europe. In the G7, only the US and Japan are lower than us. Frankly, most employers go into business to create businesses. Sometimes they exit business, and some of our tax reliefs are still better than those of many other countries in Europe.

[Baroness Bennett of Manor Castle (GP)]

My Lords, several of the corporate collapses that the Minister referred to earlier were associated with private equity ownership and high levels of debt. Moody’s reports that default rates have been twice as high for private equity-owned firms as for others. The Financial Times leading article on 6 June noted that, with exit activity from private equity funds slumping to a historically low level, some private equity firms

“are resorting to … risky … methods of generating liquidity”.

Are the Government concerned about private equity’s impact through these means on both the real economy and financial stability?

[Lord Leong (Lab)]

My Lords, private equity plays an important role in business support in this country. We have seen private equity companies that have acquired businesses and actually grown them as well. Yes, their track record is not great, but there is definitely a role for private equity in business in this country. Do not listen to the Government. Listen to people in the private equity business. Jamie Dimon said:

“I’ve always been a believer in the UK’s … strengths as a place to do business and there’s much to like about the new government’s pro-growth agenda”.


Yesterday, Nvidia CEO Jensen Huang argued that the UK was in the “Goldilocks” zone with great universities, a good start-up culture and the third-largest amount of investment in AI companies globally outside the US and China.

Ukraine

Debate between Baroness Bennett of Manor Castle and Lord Leong

Tuesday 25th February 2025 Lords Chamber

[Baroness Bennett of Manor Castle (GP)]

My Lords—

[Lord in Waiting/Government Whip (Lord Leong) (Lab)]

May we hear from the Greens first?

[Earl Attlee (Con)]

Of course.