Life Sciences Businesses

Baroness Deech Excerpts

Monday 26th February 2024 Lords Chamber

[Lord Johnson of Lainston (Con)]

I am grateful to my noble friend for that point. This is very much the work of the Office for Life Sciences, the Department for Business and Trade, and the Office for Investment. We do a huge amount of work liaising with companies and investors. One of our missions is to get more life sciences funds established in the UK, so that we can, I hope, benefit from the home buyer. I was particularly pleased a few months ago to celebrate the opening of the Flagship Pioneering office in London, which is precisely that sort of life sciences fund. It was part of the incredible investment in companies such as Moderna. We want them here and they want to come to the UK. If we can encourage them to do this, it will have a huge advantage in bridging the gaps my noble friend mentioned.

[Baroness Deech (CB)]

My Lords, I wonder whether the atmosphere is too pessimistic. The University of Oxford has propelled itself to the forefront of the world in its life sciences and science parks, notably one by Magdalen College that has more than 100 start-ups and is expanding. Does this not mean that the Government should support universities, their freedom and their ability to do science? It is from that that the great success of these life sciences start-ups has come.

[Lord Johnson of Lainston (Con)]

I totally agree with the noble Baroness. I would go further and say that one policy motor that has been successful so far is these life science investment zones, particularly in Liverpool. I had the privilege to meet with Steve Rotherham today and the metro mayors, who have been leading across the board and in Yorkshire, to find an essence of focus for the investment into these new technologies. We are doing a huge amount of work on university spin-offs as well—organisations such as Northern Gritstone and Midlands Mindforge are the absolute core of the work I am doing to get money internationally into these pools of capital.

Employment (Allocation of Tips) Bill

Baroness Deech Excerpts

2nd reading
Friday 3rd March 2023 Lords Chamber

[Baroness Deech (CB)]

My Lords, there cannot be anyone in this House who has not been affected by, and thought about, tipping. We all face the question of how much, and whether an amount added automatically can be removed without embarrassment. On many occasions, we wonder about the etiquette of tipping or not tipping. I had thought that it was less likely that many of us had been on the receiving end, except when we were younger. But, having listened to the noble Lord, Lord Mitchell, I will never again not think of how a young person to whom I am giving a tip might in fact be a future Peer.

Nevertheless, there are both detailed and broad questions that can be raised. The insertions that Sections 27D and 27F made into the Employment Rights Act have fairness as their theme. It is not defined. How can it be applied, or how can issues between employees and tronc operators be handled when the troncs are operated independently of the employer? The tronc system also means that, if a customer really wants to reward a particular employee, the tip may still go into a pool if that is how the tronc system is set up. Where tronc systems exist, there is little incentive for employers to offer much beyond the legal minimum wage levels. The more they pay, the higher the national insurance and other wage-related costs mount, which does not apply to tips, and, if the employer pays more, he or she will still remain obliged to distribute the tip income.

Proposed new Section 27G requires a tip to be paid out by the end of the month following its payment by the customer. But there is no definition of what is meant by paid. Charges in hotels may be accumulated during the stay: for example, the tip might be added at the time of the meal, but payment by the customer might be added long after. Payment might be delayed or even never received, or the charge in question to which a tip was added at a particular time might have to be reversed or reduced later due to error or disputes.

While the Bill rightly calls for information to be supplied to the employee, it could be argued that best practice means that explanation of the treatment of tips and service charges should be included for the customer on menus and tariffs. Given the lack of uniform standards, and the variety of systems and technicalities involved, it would be difficult to explain these in simple terms, let alone ones for which there is room on a menu.

Let me range to a broader level. Will this legislation serve only to cement out-of-date pay practices that will serve to inhibit the hospitality industry’s recruitment efforts? Pricing and employment practices in that industry need to be brought into line with best practice. Instead of relying on tips, employers need to be able to set salaries that offer fair and competitive levels of pay and provide prospects for promotion, bonuses and recognition of long service. The employee needs to know exactly how much they will be earning and ensure that they benefit fully from pension and other pay-related benefits such as holiday and sickness pay. Those pay-related benefits should relate to their total earnings. Those full earnings should be liable for tax. Employees and employers affected by tips should be subject to the same tax and national insurance contributions as any other business. They are not now, because of the special arrangements affecting tips. Ideally, all prices quoted by service and hospitality businesses should be fully inclusive, with no additions expected. Customers would be relieved and grateful.

In sum, the Bill as it stands needs more definition, which may yet be found in the guidance to be issued. But, overall, it is backward-looking rather than forward-looking, and many of us wish that there could be some end or curtailment to the system of tips. Will the Minister tell the House why it was thought necessary to set in stone schemes that could be said to be out of date?