Electronic Communications (Networks and Services) (Designated Vendor Directions) (Penalties) Order 2025
Baroness Jones of Whitchurch Excerpts(6 days, 18 hours ago)
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Baroness Jones of Whitchurch
That the draft Order laid before the House on 11 February be approved. Considered in Grand Committee on 25 March.
Employment Rights Bill: Productivity
Baroness Jones of Whitchurch Excerpts(6 days, 18 hours ago)
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Lord Hunt of Wirral
To ask His Majesty’s Government how the Employment Rights Bill will “support the Government’s mission to increase productivity”, as stated in their factsheet for the bill, and what evidence they have to suggest that it will increase productivity.
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, last year we published a comprehensive package of analysis showing how the Bill could increase productivity. Evidence included in that impact assessment shows that making workers happier and healthier helps boost productivity. This analysis draws on the best available evidence and consultation with external experts and stakeholders. For example, research from the University of Cambridge shows:
“The consensus on the economic impacts of labour laws is that, far from being harmful to growth, they contribute positively to productivity”.
Lord Hunt of Wirral (Con)
My Lords, the Minister will be aware that small and medium-sized enterprises are the lifeblood of our economy. What analysis have she and her colleagues in Government carried out of the effect on small and medium-sized enterprises of day one rights?
Baroness Jones of Whitchurch (Lab)
My Lords, of course we have taken into account the impact on small and medium-sized businesses, but having an entitlement to fair, flexible and secure working should not be available only to those who work for larger organisations. At the moment, 9 million employees—almost 40% of the whole private sector—work in small and micro businesses. Any exceptions to policy based on business size would create a two-tier labour market, with some workers facing fewer protections, leading to an uneven playing field between employers of different sizes and reducing incentives for small businesses to grow.
Lord Browne of Ladyton (Lab)
My Lords, the noble Lord, Lord Hunt of Wirral, will be familiar with the Cambridge Centre for Business Research 2024 policy brief, which my noble friend referred to. It is titled The Economic Effects of Changes in Labour Laws, and it tracks changes in legislative protection for workers around the world from 1970 onwards, including in the UK. The conclusions of this research speak directly to the Employment Rights Bill. On 5 March, Professor Simon Deakin, the CBR director and co-author of this brief, stated that
“stronger labour protection is associated with higher employment and lower unemployment”
and that
“laws, including those regulating flexible working, working time, and employee representation, can have positive productivity effect”.
In anticipation of Committee on the Bill, will my noble friend the Minister join with me in inviting Professor Deakin and his research colleague to come to Parliament and to brief us on their findings, and, if they accept, will the noble Lord, Lord Hunt, accept a challenge to put the case that the CBR’s conclusions are not supported by 50 years of global datasets underpinning its research and therefore do not justify the causative link?
Baroness Jones of Whitchurch (Lab)
I am grateful to my noble friend. He is citing one example. There are numerous examples of external support for our arguments. Academics at Warwick University, Oxford University, MIT and UCL all find a positive relationship between job satisfaction and productivity in their research—but, of course, I would welcome the opportunity to meet the academic to whom my noble friend referred.
Lord Fox (LD)
My Lords, clearly, we have many hours in front of us as we scrutinise this Bill. Much will depend on definitions and explanation, not least a proper definition of zero-hours contracts and the role of agencies in employment. But the glaring omission is the absence of any mention of freelancers. Does the Minister agree that freelancers form the mainstay of many important sectors, not least our creative industries? Will she undertake to ensure that the Bill focuses as much on freelancers as it does on other sorts of employees?
Baroness Jones of Whitchurch (Lab)
The noble Lord is right: we will have many happy hours debating this Bill in Committee and on Report in due course. On the issue of freelancers, he will know that this is only one piece of legislation. The make work pay programme includes a much more substantial piece of legislation. Where issues cannot be resolved fully in this legislation, they will come up in the wider Bills going forward.
Lord Londesborough (CB)
My Lords, this claim that the Bill supports productivity falls under the economic analysis section, which some have, perhaps rather unkindly, referred to as the economic fantasy section. The argument is similar to the one used for NICs Bill: increase the cost of employment; take out jobs at the lower-paid end; invest more in tech and innovation; and increase the average productivity of those left in employment. Does the Minister not agree that the danger with a flat economy, such as we have at the moment, is that we end up simply increasing unemployment, depressing real wages and lowering overall growth?
Baroness Jones of Whitchurch (Lab)
My Lords, we have to be clear about the fiscal inheritance which we inherited from the previous Government.
Baroness Jones of Whitchurch (Lab)
I know noble Lords do not like to hear it, but I am happy to repeat it again. That, of course, demanded tough choices to fix our public services and create long-term growth and investment. The Government have more than doubled the employment allowance to £10,500 for the smallest companies, meaning that more than half of businesses with NICs liabilities either gain or see no change next year. Businesses will still be able to claim employer NICs relief, including those for under-25s and under-25 apprentices, where eligible. These are tough times economically, but we are determined to do everything we can to ensure that our growth agenda remains undimmed.
Baroness O’Grady of Upper Holloway (Lab)
My Lords, is my noble friend aware of HSE analysis which shows that unionised workplaces have fewer accidents and injuries and better well-being, and of TUC research showing that unionised workplaces have more investment in skills, better family-friendly policies and a voice for working people? Does she agree that that is good for productivity?
Baroness Jones of Whitchurch (Lab)
I am grateful to my noble friend for making these points. I should reiterate that Britain’s working people and businesses will be the driving force of the UK economy, but the current labour market is not delivering for either. The productivity gap with France, Germany and the US has doubled since 2008; average salaries have barely increased from where they were 15 years ago; and the average worker would be more than 40% better off if wages had continued to grow as they did leading into the 2008 financial crisis.
A final point: alongside its productivity performance, the UK lags the OECD average on most employment protections. We inherited an economy that was in decline, with poor productivity, and we intend to fix that.
Baroness Coffey (Con)
My Lords, Jonathan Reynolds rightly met Rupert Soames, the chairman of the CBI, to listen to its concerns about the reference period for seasonal-hour workers. Will the Minister undertake to meet the FSB, which is looking for a rebate of statutory sick pay? The Government should consider this, at least for days 1 to 3.
Baroness Jones of Whitchurch (Lab)
My Lords, of course I am happy to meet with all the stakeholders. No doubt a programme will be put together to do just that.
Baroness Wheatcroft (CB)
My Lords, does the Minister accept that one of the best motivators in the workplace is employee share ownership? What do the Government intend to do to increase the extent of employee share ownership? What incentives might they consider?
Baroness Jones of Whitchurch (Lab)
The noble Baroness makes a very good point. It is slightly beyond my brief today, but I am sure that if there is scope we will embrace that idea, which is a very sensible one.
Lord Woodley (Lab)
My Lords, as a former leader of the Unite the Union, I warmly welcome this Bill, but I would like to see it go a little bit further when we deal with sectoral collective bargaining. Can the Minister listen to employment rights experts when they say that sectoral collective bargaining underpinned by legislation is the right way to achieve wider and broader growth in the economy and, importantly, a growth in productivity?
Baroness Jones of Whitchurch (Lab)
The employment Bill that we have before us today is a very substantial piece of legislation. There will be further opportunities in the make work pay plan to come back to some of the wider issues and I look forward to debating those when the opportunity arises.
Lord Sharpe of Epsom (Con)
My Lords, at Second Reading last week, I asked the Minister to name one company—apart from the four that are routinely trotted out by the Government—that is supportive of this Bill. She did not answer the question, so I invite her to have another go, because we would really like to talk to them.
Baroness Jones of Whitchurch (Lab)
The noble Lord will know that we have had extensive discussions with all the employment bodies that are engaged. Those stakeholder discussions are continuing. I am sure that we can provide further details, but the important thing is that those stakeholders have been engaged and listened to. We are continuing with that engagement and that will help the policies going forward.
Scunthorpe Steelworks
Baroness Jones of Whitchurch Excerpts(6 days, 18 hours ago)
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Lord Hunt of Wirral (Con)
My Lords, the Minister will of course be aware that there would be severe economic and social implications if these blast furnaces are closed, but does she acknowledge there would be vitally important national security concerns as well? Will she ensure that such concerns are taken fully into account right across the Government?
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, as the Minister for Industry made clear on Thursday, this Government believe in the UK steel sector. Of course we take national security issues very seriously. We keep developments in all strategic industries, including steel, under constant review. For example, high-quality steel, including for defence programmes such as the Royal Navy’s new Dreadnought-class submarines, is already being made by UK EAF producers. British Steel is not a critical supplier for other defence programmes.
Lord Fox (LD)
My Lords, I am sure the Minister would join all your Lordships in expressing sympathy to the workers and communities not just in Scunthorpe but in Teesside who have had their steel industries whipped away from them. We have not heard much about the Government’s modern industrial strategy lately. We need one across the country and, as we have heard, we need steel to ensure we have the raw materials for manufacturing and our defence industries. If there is one, can the Minister set out for your Lordships what the Government’s steel industrial strategy is? What are the three key elements of that strategy?
Baroness Jones of Whitchurch (Lab)
My Lords, steelmaking in the UK is absolutely fundamental. We are in the process of developing a detailed steel strategy and we will come back to your Lordships’ House with further details. I make it clear that the Government will simply not allow the end of steelmaking in the UK, despite the situation we inherited, in which there has been a 50% decline in crude steel production over the past decade. We will continue to give steel, and steel in the UK, an absolute priority.
Baroness Redfern (Con)
My Lords, I refer to my interests in the register. The closure of Scunthorpe’s blast furnaces and other steelmaking sectors is devastating news for almost 3,000 workers and their families. British Steel must not allow the final two blast furnaces to close until the two arc furnaces are installed to continue producing steel and ensure customers do not have to rely on international supplies. Will the Minister reaffirm that all options remain open, including a strong national intervention to protect our proud steel industry and ensure that British steel continues to be made here in the UK? Will she also reaffirm support for Scunthorpe’s green growth zone and companies in the artificial intelligence sector?
Baroness Jones of Whitchurch (Lab)
I thank the noble Baroness for that question and reiterate that steel is an absolute top priority for this Government. We have made a generous conditional offer on financial support for British Steel, and negotiations are continuing with the company and trade unions to find the best possible outcome that will protect jobs, steel-making and taxpayers’ money.
We obviously cannot pre-empt the outcome of the consultation process. However, we have extensive cross-departmental contingency plans in place to ensure that British Steel workers, their families and the wider Scunthorpe community will be protected. They include plans to establish a task force, should this become necessary, which will consider and prioritise measures that create jobs and support the local economy through recovery.
Baroness McIntosh of Pickering (Con)
My Lords, is it really the case that neither the Scunthorpe nor the Teesside steelworks will remain open? Does that leave us as the only major country in Europe without any steel-producing facility?
Baroness Jones of Whitchurch (Lab)
The Government will simply not allow the end of steel-making in the UK. We are looking seriously at options for primary steel-making here. With the help of independent experts, we are reviewing the requirements and viabilities of technologies for the production of primary steel in the UK, including direct reduced iron. As I say, steel is an absolute priority for this Government, and we will be producing a steel strategy very soon.
Lord Sikka (Lab)
My Lords, it is good to hear the Minister talk about developing a steel-making strategy, but I am sure that she appreciates that it is impossible to have a successful steel-making strategy without controlling the cost of energy. The cost of industrial energy in the UK is about seven times that of China and three to four times that of France or Germany. I have met steel executives in this place, who are basically saying that their industry cannot survive unless the Government control the profiteering of energy companies. How are the Government going to control profiteering by energy companies?
Baroness Jones of Whitchurch (Lab)
My Lords, we continue to do everything that we can to protect the steel industry. That obviously includes looking at the costs concerned. If necessary, we are committed to providing £2.5 billion to help rebuild the steel industry over the next five years. This will be available through the National Wealth Fund and other routes. We are continuing to look at what further steps need to be taken to protect the steel industry in this country.
Lord Macpherson of Earl’s Court (CB)
My Lords, do the Government agree that in recent years private sector steel producers have effectively had the Government over a barrel in negotiations? Will they commit to protecting taxpayers’ interests alongside the jobs of those working in the steel industry?
Baroness Jones of Whitchurch (Lab)
The noble Lord is right that this is a balance, but there are many good reasons why we need a steel industry in the UK, although obviously not at any price. We have made a significant offer of financial support to British Steel, and I hope that when those discussions continue the matter will be resolved.
Lord Fox (LD)
My Lords, I detected a dissonance in the answers there. At one point, the Minister said that we will always have a steel industry, but she just said “not at any price”. Those two things do not work together, so which is it? Is it we will have a steel industry whatever or there is a price that we will not pay for the steel industry?
Baroness Jones of Whitchurch (Lab)
As I say, we have made a very generous conditional offer of financial support to British Steel and negotiations are continuing. This is a live negotiation, and I cannot comment on commercially sensitive details at this stage, but we believe that our co-investment offer is fair and generous. We call on British Steel to accept that offer and the associated conditions. Obviously, there is a point at which those negotiations will not come to fruition, and we are making contingency plans, but we very much hope that we do not have to use them.
Lord Hunt of Wirral (Con)
My Lords, we should all just reflect for a moment on the agonies that so many families who are so deeply involved in this crisis must be going through. Following the remarks that the Minister has just made, can she give us some idea of the timescale to which the Government are working? She has made much of the fact that a generous offer has been made and, obviously, there are so many different interests to balance. However, returning to the point I made at the start of this short exchange, there are, above all, huge areas of national security here. Will she ensure that, within a limited timescale, all the Government, in particular the Ministry of Defence, are involved in reaching the decisions that must be made?
Baroness Jones of Whitchurch (Lab)
First, the noble Lord is absolutely right that this is a very worrying time for British Steel’s workers and all those who are affected. First and foremost, we are thinking of them. The negotiations are live and continuing. We will continue to negotiate for as long as we can. There is certainly no deadline in our mind. We will continue to keep that pressure up. We want this matter to be resolved. We feel we have made a good offer and very much hope that those negotiations will be fruitful and that we can find a package with British Steel that is acceptable.
Employment Rights Bill
Baroness Jones of Whitchurch ExcerptsThursday 27th March 2025
(1 week, 3 days ago)
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Baroness Jones of Whitchurch
That the Bill be now read a second time.
Welsh, Scottish and Northern Ireland legislative consent sought
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, when this Government came into office, we made a commitment to deliver the biggest upgrade to workers’ rights in a generation—a commitment I particularly support, given that I have been a proud member of UNISON for many years. We promised to introduce a Bill focused on improving workers’ rights and creating the necessary conditions for long-term economic growth within 100 days of taking office. This was delivered in October last year, fulfilling a key manifesto commitment.
This Bill addresses the pressing issues workers face today. Workers have waited too long for change due to the legislative stasis over the past decade and more. Average salaries barely increased under the previous Government and the average worker would now be over 40% better off if wages had continued to grow as they did leading up to the 2008 financial crisis. This lack of action means that there are far too many people in low-paid and insecure work. As few as one in six low-paid workers moves into and stays in better-paid work, and 2 million employees report feeling anxious about hours worked or shifts changing unexpectedly.
This is why Labour committed to making work pay as a key pillar of our election manifesto last year. In that manifesto, we were clear that our core mission as a Government would be not just economic growth but growth which raised living standards in every part of the United Kingdom so that working people have more money in their pocket. The mandate that the British people returned was clear. Further polling by Opinium and Focaldata since the election has highlighted that there is broad and strong support across the political spectrum for the policies in this Bill. British people have waited long enough. They now urgently want protections in their workplaces from day one of their job, an end to exploitative zero-hours contracts, and greater flexibility so that work works around their lives.
This legislation was developed in close collaboration with business and trade unions, and we are committed to ongoing engagement to ensure that all stakeholders, including SMEs, receive appropriate time to prepare for the ensuing changes. The improvements it offers in improving workers’ well-being, increasing productivity, reducing workplace conflict and creating a more level playing field for good employers would grant significant benefits worth billions of pounds per year. The Bill seeks to address the gaps and outdated provisions in current employment law and helps us turn the tide on the debilitating trend of in-work poverty.
I will now speak to the specifics of the Bill. Part 1 introduces changes to various high-profile areas of employment law. Here, we make good on our commitment to end exploitative zero-hours contracts. The Government are committed to ending one-sided flexibility, ensuring that all jobs provide a baseline of security and predictability so that workers can better plan their lives. The changes set out will require employers to offer qualifying workers guaranteed hours, reflecting the number of hours they work regularly during a reference period. This will be set out in regulations but is expected to be 12 weeks.
We will also require employers to provide in-scope workers with reasonable notice of shifts, as well payment for shifts that are cancelled, curtailed or moved at short notice. Corresponding rights are being introduced for agency workers who may also experience that one-sided flexibility. These changes could improve the security of work for around 2.4 million people, which is approximately 8% of all employed people in the UK.
On flexible working, this will be made the default, except where not reasonably feasible, to benefit workers and their families. Businesses also benefit from this change, as it will help give them access to a larger pool of candidates. However, we recognise not all workplaces can accommodate requests for flexible working. Businesses will still be able to reject unfeasible requests, provided the decision is reasonable and based on one of eight business grounds.
On statutory sick pay, the Government’s view is simple: no one should feel forced to struggle through work when they are unwell. This legislation will mean that the 1.3 million lowest-paid employees will have access to the safety net of sick pay at a rate of 80% or the flat rate, whichever is lower. We are also removing the waiting period for SSP, meaning employees will be able to access it from the first day of sickness, benefiting millions of people.
The previous Government took laudable steps to improve the law around tipping. We are building on this by strengthening the law to make it mandatory for employers to consult with workers at the place of business when developing their tipping policies.
Turning to entitlements to leave, we will improve access to paternity and unpaid parental leave by making them day-one rights and by allowing paternity and shared parental leave and pay to be taken in any order. This will give employees the peace of mind that changing jobs will not affect their access to this leave, and it will provide working parents with greater flexibility.
We will also establish a statutory entitlement for a day-one right to bereavement leave. Under this, at least 900,000 workers will benefit from bereavement leave following the death of a loved one every year. This sensitive issue is one we will consult on, with the detail to be set out in secondary legislation.
Regarding harassment in the workplace, it remains a sad reality that too many people often find their workplace unsafe. This can have a detrimental impact on people’s lives and careers, and this is particularly true for women. We are clear as a Government that we will do all we can to tackle this. We are legislating to strengthen the legal duty for employers to take all reasonable steps to stop sexual harassment before it starts, including harassment by third parties, and we will strengthen protections for whistleblowing to make it clear that, if an employee speaks up about sexual harassment, they can qualify for whistleblowing protections.
We are making changes around dismissal as well. First, we will make it unlawful to dismiss pregnant women and mothers during maternity leave and for a six-month period after their return to the workplace, although there will exceptions to this in specific circumstances. Secondly, we will create a new automatic unfair dismissal right for employees who have been unscrupulously fired and rehired, or fired and replaced, ending the unnecessary threats of these practices. Thirdly, we will ensure that all employees are better protected from unfair dismissal by making it a day-one right, benefiting nearly 9 million people.
Turning to Part 2, changes will be made to collective redundancy. These will ensure employers fulfil collective consultation obligations which will be triggered where 20 or more redundancies are proposed at one establishment, as is currently the case, or where a threshold number of employees are proposed to be made redundant across the organisation. The threshold number will be set in regulations following consultation with those with a stake in good employer-employee relations, and we will set the thresholds for this requirement at a level that balances the needs of growing business and protecting employee rights.
We are also amending notification requirements so that employers must notify the Government when they are proposing to make employees redundant across their business, and when they meet the new threshold. This will ensure employers acting in bad faith cannot circumvent their consultation obligations by proposing smaller numbers of redundancies across multiple worksites, allowing more employees to benefit from those collective consultations.
We are closing a loophole in the maritime sector to ensure seafarers have the collective redundancies protections they deserve.
We will also deliver on our commitment to reinstate and strengthen the two-tier code on workforce matters. This was first introduced by the last Labour Government and repealed by the coalition Government of 2010. By reinstating the code, we are taking a step towards ending unfair two-tiered workforces, where employees hired from the private sector to work on an outsourced contract have less favourable employment terms and conditions than those transferred from the public sector.
Our country has a national gender pay gap that stands at over 13%, so we are also taking overdue action through action plans. These will require employers to take action to improve gender equality, as well as to better support staff during the menopause. This is good for women, economic growth and our country as a whole.
Part 3 addresses pay and conditions in specific sectors. Chapter 1 will reinstate the school support staff negotiating body to give a voice to support staff, who make up roughly half of the school workforce. This body will not only negotiate pay and conditions but advise on training and career progression to properly recognise the vital role these staff undertake. While an important part of reinstating the body is to improve consistency, it does not commit us to a one-size-fits-all approach. Our intention is for support staff in all state-funded schools in England to benefit from a core pay and conditions offer, while allowing the flexibility for all schools to respond to local circumstances, above minimum agreements reached. We will be consulting on this over the summer. The body will help address the recruitment and retention challenges that state schools of all types face and drive up standards to ensure we give every child the best possible chances in life.
Chapter 2 will establish a framework for fair pay agreements in adult social care in England, and, after constructive discussions with the Scottish and Welsh Governments, this will be the case for the adult and children’s social care sectors in those nations too. This will help empower workers’ representatives and trade union officials, employers and others in partnership to negotiate pay, terms and conditions. The introduction of sectoral agreements aims to ensure that care professionals are properly recognised and rewarded for the important work they do. It will help tackle the long-standing workforce issues in this sector and improve the situation for workers and those for whom they care across Great Britain.
Chapter 3 focuses on two measures relating to seafarers. Together, these changes will benefit our seafarers, who are the present-day standard bearers of the UK’s proud maritime history, and send an important signal that we will continue to be a world leader in international maritime employment law. The first change will deliver a legally binding seafarers’ charter. This will be achieved by expanding the scope of the Seafarers’ Wages Act to provide powers to require harbour authorities to request safe working and remuneration declarations from operators in scope. It will require operators to confirm that they are meeting the requirements of these declarations, the exact details of which we will consult on in due course. Secondly, we will give effect to international maritime conventions the UK has ratified, such as the Maritime Labour Convention, which will fix a powers gap that has been left following the UK’s exit from the European Union.
Part 4 focuses on trade unions and the right to take industrial action. First, we will introduce a legal duty for employers to inform workers about their right to join a trade union. This aligns with the Government’s focus on empowering workers by ensuring they are fully informed of their rights. We will also be providing for a right of access for trade unions. This will provide a framework for the negotiation of access agreements between employers and trade unions. Once agreement is reached, trade union officials will be able to access the workplace to represent, recruit or organise members and to facilitate collective bargaining. These agreements can also cover digital forms of communication.
Changes will be made to the conditions for trade union recognition too. Where an employer refuses to recognise a trade union voluntarily, currently it can apply to the Central Arbitration Committee to obtain statutory union recognition. There are, however, unnecessary hurdles that apply to that CAC process that hinder the recognition process. The Bill will tackle these hurdles by, for example, deleting the current requirement for unions to have the support of at least 40% of the workforce in the proposed bargaining unit in a trade union recognition ballot. In future, unions will need only a simple majority of those voting, ensuring greater fairness in the process.
Other changes we are making include strengthening the existing right to reasonable paid facility time for union representatives to carry out their duties, simplifying the information required for industrial action notices, changing the law around blacklisting, ensuring those lists produced by predictive technology cannot be used to discriminate, protecting against detriment for those who take industrial action and protecting against dismissal for taking such action.
Turning to the punitive trade union legislation passed by recent Governments, we will be making repeals to the Trade Union Act 2016 to effectively return the law to its pre-2016 position. There are three exceptions to this. First, we will retain the industrial action ballot mandate expiration date but extend it to 12 months. Secondly, we will shorten the notice period for industrial action from 14 days to 10 days, rather than the seven days it was before 2016. Thirdly, we will retain the independence of the Certification Officer from political control.
We are also repealing the Strikes (Minimum Service Levels) Act, which has failed to prevent a single day of industrial action. The framework set by the Bill will foster a new partnership of co-operation between trade unions, employers and the Government.
The current system of state enforcement is fragmented and inefficient, which is complicated for workers and employers. Part 5 focuses on the enforcement of labour market legislation and lays the groundwork for the establishment of the fair work agency. This agency will deliver upgrades to enforcement of workers’ rights. It will bring together existing state enforcement functions, including the regulation of employment agencies, national minimum wage enforcement, gangmaster licensing, action against serious labour exploitation and the unpaid employment tribunal award penalty scheme. This will simplify the overall enforcement process and improve access to rights for workers, while levelling the playing field for the vast majority of businesses that already operate in good faith.
We also expect the agency to be able to make more effective and efficient use of the resources currently used by enforcement bodies. Creating this agency is more than just shuffling deckchairs. It will have a wider remit than just the existing enforcement bodies, such as enforcing holiday pay for workers. These reforms will help to ensure that non-compliance does not pay. That is fair for workers and fair for businesses, too.
Finally, Part 6 contains provision to increase employment tribunal time limits for making claims from three to six months. This will benefit both employees and employers by providing more time for disputes to be resolved internally, potentially reducing pressure on the employment tribunal system. The additional time will support employees to consider the merits of bringing a case to the employment tribunal, which will help improve the quality of claims entering the system.
The Bill is a significant upgrade to legislation and I look forward to the forthcoming debate, including the maiden speeches from my noble friends Lady Gray and Lady Berger, and the noble Baroness, Lady Cash, and the noble Lord, Lord Young of Acton.
In the context of our ambitions to make work pay, I hope noble Lords will agree that this Government are delivering on improving workers’ rights. I emphasise that this legislation seeks to benefit employers and the economy by levelling the playing field between good employers who already go beyond measures in the Bill and the less scrupulous ones. These benefits are recognised by many of the businesses we have engaged with throughout the Bill’s development and passage to date, including Centrica, the Co-op, Richer Sounds and Thomas Kneale & Co.
In the words of Nick Cooper, managing director of the Manchester-based SME Adept Corporate Services,
“fair treatment and job security aren’t luxuries—they’re the foundation of a high-performing workforce”.
When less scrupulous businesses are challenged, it is those that are already doing right by their workers—as the vast majority already do—that benefit.
I urge the House to support the Bill and the commitment it represents to improving the lives of millions of people and growing the economy. I beg to move.
Baroness Jones of Whitchurch (Lab)
My Lords, it is a pleasure to be able to conclude this debate, which has been as insightful as it has been passionate and informed. The debate today has been very well attended and I hope that noble Lords will understand that time constraints mean that I will be unable to respond to every individual contribution, as I would normally do, but I shall do my best. Where I have not been able to respond, I am of course available to talk to noble Lords and to discuss: I am sure that we will have plenty of discussions between now and Committee, and after that. I hope that this will be an ongoing dialogue.
I know that many noble Lords have considerable expertise in running their own businesses. The noble Lords, Lord Londesborough and Lord Pitkeathley of Camden Town, and the noble Baroness, Lady Cash, spoke with these valuable insights. The Bill seeks to raise the floor for employment rights in our country and includes practices that many good employers—such, no doubt, as those operated by those noble Lords—already have, to the benefit of themselves and their workforce. I am sure that noble Lords will value the level playing field for employers that the Bill will ensure.
I dare say that the noble Lord, Lord Balfe, was preaching to the choir with his much-needed intervention from the Benches opposite on why people joint trade unions, and the range of benefits that collective bargaining brings: I hope that his Front Bench were listening to those points. I thank the noble Lords, Lord Barber of Ainsdale, Lord Pitkeathley of Camden Town, Lord Hendy, Lord Katz, Lord Watson, Lord Monks, Lord Prentis of Leeds, Lord Browne of Ladyton, and the noble Baronesses, Lady Carberry of Muswell Hill, Lady Hazarika, Lady Bousted and Lady Lister, all of whom expressed their strong support for this landmark legislation and powerfully articulated the need for it to reach the statute book.
I take this opportunity to pay tribute to those who made their excellent maiden speeches. I congratulate my noble friend Lady Berger on her marvellous maiden speech. My noble friend brings a valuable perspective to this debate, and it is great to hear how she is proudly advocating for, and championing, strong employment rights. It is warming to see her back in Parliament, and I am sure your Lordships’ House will value her wisdom and expertise, as well the courage and integrity she embodies so well. I thank my noble friend Lady Gray of Tottenham, whose extensive career in the Civil Service is greatly respected in your Lordships’ House. My noble friend brings a wealth of experience and insights to our discussions on advancing workplace rights. It was a pleasure to hear from the noble Baroness, Lady Cash, whose roles as commissioner of the Equality and Human Rights Commission and as an employer bring unique insight into many important issues regarding workplace equality. Finally, I pay tribute to the noble Lord, Lord Young of Acton. Having another strong voice in your Lordships’ House is always welcome. The perspective the noble Lord brings through his work with the Free Speech Union is important, and I have no doubt his discussions on this legislation will continue to be of great interest.
I thank the noble Lord, Lord Palmer of Childs Hill, and the noble Baronesses, Lady Lister and Lady Smith of Llanfaes, for their passionate interest in those with caring responsibilities. An important part of our plans to modernise the world of work is ensuring carers can enjoy a good job and contribute their skills alongside their valuable role as carers. The Government will examine the feasibility of introducing paid carer’s leave in the upcoming carer’s leave review. On making caring a protected characteristic, many people with caring responsibilities are already likely to be afforded protections under the Equality Act 2010, by the provisions relating to age and disability discrimination which specifically protect people from direct discrimination by association. Individuals with caring responsibilities for someone who is, for example, elderly or disabled within the meaning of the Act are likely to be protected from unlawful discrimination from their association with someone with a protected characteristic. I am sure that noble Lords will understand that this means that this intervention would be unnecessary.
I thank the noble Baroness, Lady Barran, and the right reverend Prelate the Bishop of Newcastle for raising the issue of kinship care and foster caring. We are committed to ensuring that all employed parents and carers receive the support they need to strike the appropriate balance between their work and family lives. For the first time, the Government’s Children’s Wellbeing and Schools Bill will create a legal definition of kinship care, for the purposes of specific measures in that Bill. By defining kinship care in law, the legislation will ensure that all local authorities have a clear and consistent understanding of what constitutes kinship care. I hope this assures noble Lords of the Government’s intentions in this sensitive area.
A number of noble Lords, including the noble Lords, Lord Hunt, Lord Ashcombe, Lord Vaux and Lord Sharpe, and the noble Baronesses, Lady Foster and Lady Cash, raised the issue of the financial implications of the Bill. The noble Lord, Lord Sharpe, suggested that we should listen only to business voices, but I have to say to him that our history and our economy is based on partnership. That is always what has made us thrive, and that will underlie our growth strategy going forward. This is not a case of hearing one voice over another. The noble Lord, Lord Sharpe, also raised the issue of business confidence. According to the latest Lloyds Business Barometer, which surveys 1,200 businesses every month, business confidence has increased 12 points, to 49% in February, the highest since August 2024. This shows that the Government are improving the business environment.
Of course, we recognise the concerns about the cost to business. The £5 billion figure from our impact assessment is a top-end estimate which will largely represent a direct transfer to the lowest paid in society, with the bottom end of the range close to £1 billion. The costs, therefore, are likely to be under 0.4% of our national wage bill and could even be as low as 0.1%.
A number of noble Lords also mentioned the OBR comments, but I stress that it has yet to make an assessment, so it is premature to read anything into its comments so far. Meanwhile, improving worker well-being, increasing productivity, reducing workplace conflict and creating a more level playing field for good employers will grant significant benefits worth billions of pounds per year, off-setting those costs.
The noble Lords, Lord Hunt of Wirral, Lord Palmer of Childs Hill, Lord Vaux and Lord Fox, the noble Baronesses, Lady Noakes and Lady Coffey, and the noble Viscount, Lord Colville of Culross, raised the issue of parliamentary scrutiny. I reassure your Lordships’ House that the approach we are taking to many of the delegated powers in the Bill is in line with existing precedents for use of delegated powers in employment law, and the department believes that these are necessary and justified. They will enable the Government to remain responsive to the changing needs of the modern labour market and the economy, and to ensure that the employment rights framework remains relevant to these needs. Of course, we will give the Bill full scrutiny in its stages here, and I look forward to the many conversations we will have with noble Lords about this.
Noble Lords also raised the issue of amendments made by the Government in the other place. Throughout the development and passage of the Bill, the Government have made great efforts to listen to a range of views from businesses, trade unions, representative organisations, civil society and others. The insights gained, including from the formal consultations the Government have conducted since introducing the Bill, have informed the amendments made in the other place. These have been invaluable in ensuring that the Bill works in practice both for workers and for businesses of all sizes across the country.
The noble Baroness, Lady Barran, raised concerns about the school support staff negotiating body. While an important part of reinstating the body is to improve consistency, it does not commit us to a one-size-fits-all approach. Our intention is for support staff in all state-funded schools in England to benefit from a core pay and conditions offer, while allowing the flexibility for all schools to respond to local circumstances, above minimum agreed standards. We will be consulting on this over the summer.
My noble friend Lady Whitaker asked about seafarers. My noble friend is right to point out the important role that seafarers play in our economy and the necessity of improving protections. These clauses provide powers to require operators of frequent international services to the UK to meet certain standards on board their vessels in order to continue having access to UK ports without having to pay a surcharge or risking refusal of access. We will continue to engage at consultation stage with the trade unions representing seafarers and seafarer charities to ensure that the unique needs and voices of seafarers are represented in this process.
The noble Lords, Lord Whitty and Lord Fox, the noble Viscount, Lord Colville of Culross, and the noble Baroness, Lady Coffey, raised issues concerning the fair work agency. Better enforcement against the non-compliant minority of businesses means that more workers will get their due and that businesses are on a level playing field. That is fair for business and fair for workers. We will discuss extensively with businesses and employers how to use this power most effectively, and take the view of the fair work agency’s tripartite advisory board. This will include discussing what to do when workers are unwilling to enforce their rights.
On inspecting umbrella companies, the Bill will bring umbrella companies’ activities that are not currently captured in existing frameworks within scope of state enforcement. This will allow the application to them of a bespoke regulatory framework, which will be set out in regulations and, in time, enforced by the fair work agency. We will consult on these regulations. I hope that this alleviates noble Lords’ concerns.
On the structure and actions of the fair work agency, it will subsume three existing agencies and additional functions from HMRC into one single body—so we are reducing the number of quangos, not adding to them, while increasing efficiency. The agency will take a balanced approach to enforcement. It will have strong powers that will enable it to take action against rogue employers that exploit their staff, and it will provide support to businesses to help them comply with the law.
The noble Lords, Lord Young of Acton and Lord Strathcarron, and the noble Baroness, Lady Bray, raised concerns about third-party harassment. Conduct that is merely upsetting or causes minor offence will not be sufficiently serious to meet the Equality Act 2010’s definition of harassment, which requires significantly more than that for it to be unlawful. It is not enough for the claimant to simply feel that someone’s conduct is offensive. There is an objective test in which the reasonableness and the facts of the individual situation will always be considered. The steps an employer can reasonably take in respect of third parties are clearly more limited than those for their employees. Employers will not be penalised for failing to anticipate the unforeseeable or to take other impractical steps. Likewise, any step that was disproportionate interference with a customer’s right to freedom of expression would not be reasonable. Therefore, we do not expect this Bill to have the chilling effect on free speech that the noble Lords envisage.
Several noble Lords, including my noble friends Lady Whittaker and Lady O’Grady, the noble Lord, Lord Palmer, and the noble Baronesses, Lady Morrissey and Lady Kramer, raised the issue of non-disclosure agreements. The Bill means that a provision in the NDA seeking to prevent a protected disclosure about sexual harassment will be unenforceable. An NDA entered into in respect of sexual harassment may still stand to protect confidentiality in other circumstances, such as requiring the employer to keep the identity of the worker and the details of the incident confidential. This is the case now and is not changed by this measure.
I respect noble Lords’ interest in this important topic, and we are progressing with some reforms through other legislative means. The Government are pressing ahead with plans to commence the provisions relevant to NDAs in the Victims and Prisoners Act 2024 and in the Higher Education (Freedom of Speech) Act 2023. The provisions in the Higher Education (Freedom of Speech) Act 2023 that will, when commenced, ban NDAs for staff members, visiting speakers and students in cases of bullying, harassment—including sexual harassment—and intimidation were made by an amendment from this Government when in opposition, of which we remain proud. When commenced, Section 17 of the Victims and Prisoners Act 2024 will ensure that confidentiality clauses, including those in non-disclosure agreements, cannot be legally enforced to the extent that they seek to prevent victims of crime reporting a crime, co-operating with regulators in relation to the crime, or accessing confidential advice and support.
I recognise the points raised by the noble Baroness, Lady Browning, and my noble friend Lady Rafferty about the adult social care negotiating body, to be introduced by the Bill. The Government’s immediate work to support the social care sector will help to professionalise the workforce by expanding the national career structure, identifying and funding quality learning and development, and ensuring that there are progression and development opportunities so that people can build their careers in care.
To reassure noble Lords on the scope of the negotiating bodies, the bodies will be established through regulations, which will have the option to include more details on their remit and could include specifying that training and career progression are included. These regulations will follow further engagement and consultation with the sector.
I will address the comments made by the noble Lord, Lord Burns, the noble Baroness, Lady Coffey, and others on the political funds and the supposed contradiction between subscription traps and the reminder to opt out of a political fund. Subscription traps often occur when consumers are misled into signing a contract that they do not want through a free or reduced-price offer, or face unnecessary barriers to exit a contract. This is absolutely not akin to how trade union political funds work. The situations are not comparable.
A union is a collective of workers, and its political fund should be considered in that light. A union member should be aware of what their monthly fees will be, and that will include the political fund levy. The rate payable stays the same from day one; therefore, the member should know what they are paying and are free to opt out. There is no deadline after which their contribution rate will rise significantly. For opt-outs, the Bill will simply restore the position as it was before the passage of the Trade Union Act 2016. This has been the position for 70 years, and I am sure that noble Lords will understand that it is fair and definitely not the same as a subscription trap.
My noble friend Lord Prentis of Leeds raised the dispute involving Livv Housing in Knowsley. I hope that I can give him some reassurance on this issue. The Government are looking into how the pre-existing range of protections are currently operating and if and where the law may fall short. We are also conscious that this particular case has not been tested in the courts to see whether the existing law offers sufficient protection. The law on inducements and detriments is complex and needs to be carefully considered. I will continue to liaise with my noble friend on that issue.
This Bill is but the first part of the much wider make work pay agenda that this Government are endeavouring to implement. Many noble Lords have made vital contributions to this debate, suggesting reforms that go further than this Bill does now. The noble Lord, Lord Freyberg, and the noble Viscount, Lord Colville of Culross, proposed the creation of a commissioner for freelancers. My noble friend Lady Prosser proposed further action to tackle gender equality. The noble Baroness, Lady Penn, and my noble friend Lady Lister both raised the importance of reforms to parental leave. I respect these contributions and the desire to go further, but we must strike the right balance, while continuing to ensure that this remains a pro-worker, pro-business Bill. I stress that this is part of our bigger reforms under the ongoing make work pay agenda.
To conclude, this Bill is a crucial step towards the Government’s manifesto commitment to enhance workers’ rights and improve the lives of millions. Alongside our new industrial strategy, it will increase productivity and create the right conditions for long-term, sustainable and secure economic growth. This Bill is a testament to the Government’s resolve to improve workers’ rights, while levelling the playing field between good employers and less scrupulous ones. I urge all noble Lords to support the Bill.
Baroness Jones of Whitchurch
That the Bill be committed to a Committee of the Whole House, and that it be an instruction to the Committee of the Whole House that they consider the Bill in the following order: Clauses 1 to 4, Schedule 1, Clauses 5 and 6, Schedule 2, Clauses 7 to 23, Schedule 3, Clauses 24 to 35, Schedule 4, Clauses 36 to 53, Schedule 5, Clauses 54 to 57, Schedule 6, Clauses 58 to 87, Schedule 7, Clauses 88 to 128, Schedule 8, Clauses 129 to 132, Schedule 9, Clauses 133 to 146, Schedules 10 and 11, Clauses 147 to 149, Schedule 12, Clauses 150 to 157, Title.
Electronic Communications (Networks and Services) (Designated Vendor Directions) (Penalties) Order 2025
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Baroness Jones of Whitchurch
That the Grand Committee do consider the Electronic Communications (Networks and Services) (Designated Vendor Directions) (Penalties) Order 2025.
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, the Government take the security of public telecoms seriously. As noble Lords know, the Telecommunications (Security) Act 2021 received Royal Assent on 17 November 2021. The Act established powers to introduce a new telecommunications security framework and introduced new vendor security powers. It is these vendor security powers that are relevant to this statutory instrument.
The Act allows the Secretary of State to issue a designation notice to a vendor whose presence in the UK networks poses national security risks, and designated vendor directions to public communications providers placing controls on their use of equipment or services by a designated vendor. The Act also gives the Secretary of State powers to impose a penalty on a public communications provider that does not comply with a designated vendor direction issued to it. That penalty can be up to 10% of a provider’s turnover. The Act states that the Secretary of State must set out rules for how they intend to calculate a provider’s turnover. That includes what relevant business the Secretary of State will take into account when calculating that turnover.
The Electronic Communications (Networks and Services) (Penalties) (Rules for Calculation of Turnover) Order 2003 sets out rules for Ofcom to calculate a provider’s turnover when it contravenes conditions set under the Communications Act 2003. The statutory instrument makes changes to the 2003 order so that rules in that legislation apply when calculating turnover for the purposes of determining a penalty for enforcement of designated vendor directions. It also defines what is to be treated as a network service facility or business by reference to which the calculation of turnover is to be made.
The Secretary of State could have relied on the 2003 order for the purposes of enforcement of a designated vendor direction. However, this SI removes any ambiguity and provides legal certainty and absolute clarity on the rules that apply. Turnover will be calculated in line with accounting practices and principles generally accepted in the United Kingdom and will be limited to the amount derived by that provider after the deduction of relevant taxes.
In conclusion, this is a narrowly focused but important statutory instrument through which we are ensuring legal certainty and clarity. It makes clear the Secretary of State’s approach to calculating turnover, which will underpin any decision to penalise a provider in relation to the designated vendor directions. I beg to move.
Lord Clement-Jones (LD)
My Lords, I thank the Minister for her introduction to this draft statutory instrument; it was brief and to the point. These penalties will be able to reach 10% of turnover or £100,000 per day for continuing breaches, so getting the calculations right is crucial. However, I have some concerns about the SI, the first of which is about timing.
I do not understand why we are looking at a three-year gap between the enabling powers and the calculation rules. The Telecommunications (Security) Act 2021, which I worked on, was presented to this House as urgent legislation to protect critical national infrastructure, yet here we are, in 2025, only now establishing how to calculate penalties for breaches in the way set out in this SI. During this period, we have had enforcement powers without the ability to properly determine penalties. As I understand it, tier 1 providers had to comply by March 2024, yet the penalty calculation mechanism will not be in place until this year—no doubt in a few weeks’ time.
Secondly, there is the absence of consultation. The Explanatory Memorandum cites the reason as the SI’s “technical nature”, but these penalties—I mentioned their size—could have major financial implications for providers. The telecoms industry has complex business structures and revenue streams. Technical expertise from the industry could have helped to ensure that these calculations are practical and comprehensive. The technical justification seems remarkably weak, given the impact these rules could have. For example, the current definition of “relevant business” for these calculations focuses on traditional network and service provision, but modern telecoms companies often have diverse revenue streams. There is no clear provision for new business models or technologies. How will we handle integrated service providers? What about international revenues? The treatment of associated services needs clarification.
Thirdly, the implementation sequence is an issue. We are being asked to approve penalty calculations before seeing the enforcement guidelines. There is no impact assessment, so we cannot evaluate potential consequences. I understand that the post-implementation review is not scheduled until 2026, and there is no clear mechanism for adjusting the framework if problems emerge. The interaction with the existing penalty regime needs clarification.
There are also technical concerns that need some attention. The switch from “notified provider” to “person” in the 2003 order, as a result of this SI, needs rather more explanation. The calculation method for continuing breaches is not fully detailed, there is no specific provision for group companies or complex corporate structures and the treatment of joint ventures and partnerships remains unclear.
Finally, I hope that, in broad terms, the Minister can give us an update on progress on the removal of equipment covered by the Telecommunications (Security) Act 2021. That was mandated by the Act; I know it is under way but it is not yet complete.
This is about not merely technical calculations but creating an effective deterrent to the telecoms industry, while ensuring fair and practical enforcement of important security measures. Getting these rules right is essential for both national security and our telecoms sector. I look forward to the Minister’s response on these points.
Baroness Jones of Whitchurch (Lab)
My Lords, I thank noble Lords for their valuable contributions to this debate. We believe that legislative certainty is important, which is why we are seeking to resolve potential ambiguity by making this instrument at the earliest opportunity. This SI will ensure that important decisions on national security, specifically the enforcement of national security powers introduced by the Telecommunications (Security) Act, have clear rules underpinning them.
I will now have a go at answering the questions raised in the debate. The noble Lord, Lord Clement-Jones, asked about the three-year gap and why the SI was not taken forward earlier. I should thank Secondary Legislation Scrutiny Committee clerks for asking for clarification on the operability of the regime. The system has not been inoperable for four years. The Secretary of State can and has used their powers to monitor compliance with a direction under the current rules. The Secretary of State could have taken enforcement action without this SI being in place. The 2003 order could have applied for the purpose of enforcement of a designated vendor direction. However, there is some ambiguity concerning whether the rules set out in the 2003 order can apply to the enforcement of a designated vendor direction. This could have left enforcement action imposing a penalty on a provider vulnerable to legal challenge. We are therefore making an SI to ensure that there is legal certainty and clarity when penalties are imposed, and that position was set out in a letter to the Secondary Legislation Scrutiny Committee clarifying that.
The noble Lord, Lord Clement-Jones, also asked about the lack of consultation, but this is a technical clarification for rules that were already in operation. He asked about how turnover would be calculated. It will be done in conformity with the accounting practices and principles that are generally accepted in the United Kingdom. The turnover will be limited to the amount derived by that provider from the relevant business after deduction of sales rebates, value added tax and other taxes directly related to turnover. If the provider’s relevant business consists of two or more undertakings that each prepare accounts, then the turnover should be calculated by adding together the turnover of each undertaking. Any aid granted by a public body to a provider should be included in the calculation of turnover if the provider is a recipient of the aid and if that is directly linked to the carrying out by that provider of the relevant business. The business activities to be included in the turnover calculation for a provider are as follows: the provision of public electronic communications network; the provision of the public electronic communication of services; and the making available of facilities that are associated with facilities by reference to such a network or service.
The noble Lord, Lord Clement-Jones, asked about the removal of equipment and the progress report on that. Using the powers provided by the Telecommunications (Security) Act, the former Secretary of State for Digital, Culture, Media and Sport issued a designation notice to Huawei and a designated vendor direction to 35 providers in October 2022. The direction gives 12 specific requirements for telecom providers’ use of Huawei equipment. The previous Secretary of State decided that these legal controls on the use of Huawei equipment or services were necessary and proportionate to the national security risks they were designated to mitigate. The UK is now on a path towards the complete removal of Huawei from its 5G networks by the end of 2027.
The noble Viscount, Lord Camrose, asked whether the application was being applied in a fair and consistent way. I would say that this was an evidence-based decision, reflecting the national security risk. The designation notice issued to Huawei set out the reasons why the use of its equipment is viewed as a national security risk; it includes concerns about, among other things, corporate control, cybersecurity and engineering quality. This action builds on long-standing advice from the National Cyber Security Centre and the Government on the use of Huawei equipment in UK public tele- communications networks.
The noble Viscount asked about the cost to business of removing this equipment. The Government have estimated that the removal of Huawei equipment due to the designated vendor directions will cost providers up to £2 billion in total.
The noble Viscount also asked how the Secretary of State monitors compliance with a direction. The Communications Act 2003, as amended by the Telecommunications (Security) Act 2021, provides the Secretary of State with powers enabling the monitoring and enforcement of requirements imposed in designated vendor directions. The Secretary of State is responsible for determining compliance with a direction, based on evidence provided by the industry and Ofcom. The Secretary of State may give Ofcom a direction requiring Ofcom to monitor providers’ progress in complying with the direction and to report to the Secretary of State to inform their assessment of compliance. The former Secretary of State received Ofcom’s report in spring 2024 on the removal of Huawei from relevant providers’ core network functions, and that ongoing appraisal continues.
I hope that I have answered all the questions that were asked. If I have not answered on something that is very technical, I can write to noble Lords, of course. In the meantime, I hope noble Lords agree on the importance of introducing this instrument to ensure legislative certainty and therefore agree that enforcement through these powers should be introduced as swiftly as possible.
Lord Clement-Jones (LD)
Is the Minister confident that the 2027 deadline will be met; that no vendor, purchaser or telecoms company will be caught by the Act; that no fines will be levied; and that what we are talking about today is, therefore, entirely theoretical?
Baroness Jones of Whitchurch (Lab)
I am sure that it says in my brief that we are on target to meet the 2027 deadline. If I am mistaken about that, I will write to noble Lords, obviously.
In response to the noble Viscount, Lord Camrose, of course Ofcom reports to Parliament in the normal way, through its annual report, and I am sure that this activity will be included.
Israel: Arms Exports
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Lord Howard of Lympne
To ask His Majesty’s Government, further to the remarks by Baroness Chapman of Darlington on 3 September 2024 (HL Deb cols 1065-69), whether they had discretion not to suspend the arms exports to Israel which they suspended.
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, the assessment that there was a clear risk that certain UK exports might be used to commit or facilitate serious violations of international humanitarian law meant that such exports were no longer permitted under our strategic export licensing criteria, and were thus suspended. The SELC are statutory guidance, from which the Government may depart only when there is a good reason. Moreover, the UK’s international obligations, such as under the Arms Trade Treaty, remain binding on the UK under international law, irrespective of whether the SELC are being applied. My noble friend Lady Chapman was therefore quite correct to say that, under the criteria, the Government were required to suspend certain licences.
Lord Howard of Lympne (Con)
I thank the Minister for that answer but, when the Foreign Secretary announced the suspension, he was careful not to use the word “required”, and specifically referred to the fact that international humanitarian law was not the only factor to be taken into account. Whether one thinks that all arms exports to Israel should be suspended or no arms exports to Israel should be granted, surely we can all agree that Parliament must be given an accurate reason for the Government’s decision. Is not the very fact that the suspension is only partial proof that, contrary to what the noble Baroness, Lady Chapman of Darlington, told your Lordships on 3 September and subsequently, the Government had a discretion in this matter that they chose to exercise in a particular way?
Baroness Jones of Whitchurch (Lab)
I must reiterate that my noble friend Lady Chapman was absolutely correct to say that, under the criteria, the Government were required to suspend certain licences. The decision not to suspend the F35 licences was a departure from the criteria, and Ministers anticipated such a course when the criteria were introduced.
However, our international obligations remain binding on the UK under international law, regardless of whether the SELC are being applied. So, for example, our actions to depart from the SELC and continue the export of items for the F35 programme still have to comply with the Arms Trade Treaty. Article 7 of that treaty requires a balancing exercise, considering factors including the risk of serious violation of international humanitarian law and whether exports
“would contribute to or undermine peace and security”.
Exports are prohibited under this article unless the risk of negative consequences is overriding.
Finally, the Government have been clear about the international humanitarian risks in this case, but also that F35 licences cannot be suspended without serious prejudice to the entire programme and, therefore, to international peace and security. Thus, the exemption of F35 licences was a case-specific decision based on specific factors, while the suspension of other licences was mandated by the criteria.
Lord Singh of Wimbledon (CB)
My Lords, the United Nations, Amnesty International, Human Rights Watch and others have all condemned Israeli brutality and genocide against Palestinians in Gaza and the West Bank. The International Criminal Court has declared Israel’s Prime Minister, Benjamin Netanyahu, guilty of war crimes and issued a warrant for his arrest. Will the Minister agree that, in continuing to supply arms to Israel, however diplomatically we put it, we are complicit in the genocide of Palestinian men, women and innocent children?
Baroness Jones of Whitchurch (Lab)
Ultimately, these are matters for the courts to determine, not the Government. However, the clear risk of serious breaches of international humanitarian law has led us to suspend those licences. I will say one further thing: Prime Minister Netanyahu has not been found guilty of any breaches up until this date.
Baroness Deech (CB)
My Lords, are the Government taking a bit of a pick-and-mix attitude to international law? In the case of Prime Minister Netanyahu, what about the law of sovereign immunity? He has immunity as a head of state, and it is a state that never signed up to the International Criminal Court. The Government need to be clear on what they consider to be international law and what is not, and not just pick and choose.
Baroness Jones of Whitchurch (Lab)
I can only reiterate what I have just said, which is that this is a matter for the courts, not the Government, to determine. However, we have made our own decisions about the clear risk of serious breaches of international humanitarian law, which have led us to suspend the licences being debated.
Lord Wolfson of Tredegar (Con)
My Lords, on 15 October my noble friend Lord Howard of Lympne asked a Written Question of the Attorney-General, who I am pleased to see in his place. He asked whether the Attorney-General’s advice was that licences to export arms to Israel had to be suspended. The Attorney’s reply cited the usual convention that his advice was confidential. But, on 5 September, the noble Baroness, Lady Chapman of Darlington, referred expressly to the substance of that advice when explaining to this House why arms exports had to be suspended. Her answer therefore both breached the convention on Attorney-Generals’ advice and contradicted the Foreign Secretary’s explanation, because he said in the other place that the Government had a “discretion” on whether to suspend the licences. Can we now finally have a clear answer to a clear question? Were the Government legally required to suspend those arms export licences or did they have a discretion that they chose to exercise in a particular way?
Baroness Jones of Whitchurch (Lab)
As I have made clear, our assessment was that there was a clear risk that there would be serious violations of international humanitarian law, so my noble friend was correct in her decision. The strategic export licensing criteria are cumulative, in that before a licence can be issued it must comply with all the criteria. Criterion 5 of the SELC is a separate criterion that allows the Government to weigh national security concerns when considering whether to license an export, and as such provides a discretionary basis on which to refuse exports. There is no scope to balance criterion 2(c) on international humanitarian issues against criterion 5.
Lord Grocott (Lab)
My Lords, is it not a fact that we all know and can agree on that, during the course of the war in Gaza, schools, hospitals and aid convoys have been attacked, and families have been attacked in areas that the Israel Defense Forces has declared as being safe to go to? Rather than looking at the intricacies of legal arguments, is it not an absolutely clear fact, bearing in mind the proportionality principle of international humanitarian law, that it would be an astonishing argument to say that there have been no violations of international humanitarian law?
Baroness Jones of Whitchurch (Lab)
I thank my noble friend for raising those issues. We strongly oppose Israel’s resumption of hostilities and urgently want to see a return to a ceasefire. More bloodshed is in no one’s interest. The reported civilian casualties resulting from the recent strikes are appalling and we urge all parties to return urgently to talks, implement the ceasefire agreement in full and work towards a permanent peace. For the sake of the remaining hostages and their loved ones, for the people of Gaza and for the future of two peoples who have suffered so much for so long, we will continue to strive for a return to the path of peace.
Lord Purvis of Tweed (LD)
My Lords, these Benches agreed with the assessment carried out last summer. But, given that there have been considerable and grave breaches since then, why have the Government not reviewed their assessment, to take into consideration the more recent developments and the concerns over breaches? Given that the assessment concerned the risk of grave breaches in Gaza, we have also seen—with almost impunity—the deteriorating situation in the West Bank. Surely the Government should be using the precautionary principle and we should not be trading with the Occupied Territories and should be restricting further activities, because these export licence restrictions represent less than 10% of all licences. Surely the Government must now use the precautionary principle and widen restrictions even further, especially with regard to the West Bank?
Baroness Jones of Whitchurch (Lab)
My Lords, we keep all these decisions under review. The noble Lord is right to say that not all the licences have been suspended. Some of the items are not being used actively in combat; they are being used for humanitarian aid and other issues, to help, for example, the NGOs in those territories, so we did not feel that a full suspension was necessary.
US Tariffs on EU Goods
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Baroness Ritchie of Downpatrick
To ask His Majesty’s Government what assessment they have made of the implications of tariffs imposed by the United States of America on EU goods for trade in Northern Ireland, having regard to the Windsor Framework.
The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)
My Lords, I am grateful to my noble friend for raising this issue. Northern Ireland is part of the United Kingdom customs territory and internal market. Northern Ireland exporters will not be impacted by these new US tariffs any more than exporters from elsewhere in the UK. We are looking closely at the retaliatory tariffs announced by the EU and any impact that they might have on Northern Ireland businesses. Under the Windsor agreement, where US imports into Northern Ireland do not subsequently enter the EU, traders can reclaim any additional duties through the duty reimbursement scheme.
Baroness Ritchie of Downpatrick (Lab)
My Lords, I thank my noble friend the Minister for her response. Bearing in mind that the Windsor Framework is a device to protect delicate trading relationships in Northern Ireland in the post-Brexit era, can she outline what work is being done with regard to potential tariffs imposed on EU goods by the USA, which could impact on Northern Ireland? What will be the impact on the most vulnerable products and markets? What discussions have taken place with the EU and the American Administration regarding mitigations to protect businesses?
Baroness Jones of Whitchurch (Lab)
I would like to reassure my noble friend that we will always act in the best interests of all UK businesses, which of course includes those in Northern Ireland. We continue to look closely at the details of the retaliatory tariffs announced by the EU and any impact they might have on businesses. We are in regular contact with our partners in the US and the EU, as well as businesses in the UK. An important mitigation is already in place under the Windsor agreement. Where goods do not subsequently enter the EU, the duty reimbursement scheme enables traders to reclaim EU applicable duties in full without any limit on total claims. The customs duty waiver scheme also allows duties to be waived entirely, subject to an overall limit.
Lord Carlile of Berriew (CB)
My Lords, bearing in mind that the issues raised by the noble Baroness are seen by Northern Ireland business as raising huge complexities, will the Minister consider the practical step of issuing a weekly bulletin in Northern Ireland so that tariffs and other regulations appear to business- people to be less like an anarchic board game?
Baroness Jones of Whitchurch (Lab)
Comprehensive guidance is available on GOV.UK and businesses can contact HMRC for more information about the reimbursement schemes. I will take back the noble Lord’s general comment about how we can improve those communications.
Lord Dodds of Duncairn (DUP)
My Lords, the fundamental problem is that part of the United Kingdom, Northern Ireland, is forced to impose tariffs on US imports in a situation where the rest of the UK may not. That is without any reference to the UK Government, this Parliament, the Northern Ireland Government or the Northern Ireland legislature, so that colonial set-up has to be rectified. In the absence of a rectification of the fundamental problem, the Minister referred to the tariff reimbursement scheme, but the head of Manufacturing NI said in the Financial Times that the scheme is “nonsense” and full of red tape, and that
“few companies have been able to successfully navigate it”.
He knows about business. Is he right, or do the Government know better?
Baroness Jones of Whitchurch (Lab)
The duty reimbursement scheme is an established scheme that businesses have been using to make successful claims since 30 June 2023. As I have said, comprehensive guidance is available on GOV.UK and businesses can contact HMRC if they need more information to support their claims.
Baroness Foster of Aghadrumsee (Non-Afl)
My Lords, I refer to my interest as chair of InterTrade UK. Paragraph 47 of Safeguarding the Union says that the United Kingdom is not just a political union but an economic union. Given that, and bearing in mind what other noble Lords have said, how can we deal with the economic problems of tariffs coming from either the European Union or the United States of America? How do we make it simpler? The Minister said that it is an established scheme, but it has been in place for less than two years and has not had to be activated until these tariffs have come to fruition. We need to find a way to make it easier for companies and to deal with it proactively.
Baroness Jones of Whitchurch (Lab)
This is all predicated on the Windsor Framework, which removes unnecessary checks, paperwork and duties and fixes a lot of the problems for parcels and medicines applying across the whole of the UK. It also enables important democratic scrutiny through the Stormont brake. There are those protections in place, and we are continuing to look at the operation of the Windsor Framework as we go forward.
Lord Caine (Con)
My Lords, last week, at the St Patrick’s celebrations in Washington, the Northern Ireland Secretary restated the Government’s commitment to reaching a trade agreement with the United States, which we strongly welcome. At the weekend, however, former House Speaker Nancy Pelosi threatened that Congress would veto any trade deal that does not respect the 1998 Belfast agreement. Given that the 1998 agreement upholds Northern Ireland’s position as an integral part of the United Kingdom and the fact that the United States is the largest market for Northern Ireland goods outside Great Britain and Ireland, can the Minister confirm that it is the Government’s intention that any US trade agreement will benefit Northern Ireland in exactly the same ways and on the same terms as all other parts of our country?
Baroness Jones of Whitchurch (Lab)
My Lords, as noble Lords will know, we are working to find a new relationship with the US and to build on the strong economic relationship we have, which is fair, balanced and reciprocal. Of course, that will have to take into account the interests of Northern Ireland as well.
Lord Purvis of Tweed (LD)
My Lords, given that all parts of the UK economy are so integrated with that of the European single market already, and that the tariffs from the Trump Administration are economic coercion and not based on any trade policy, I have two questions for the Minister. First, have we triggered the enhanced co-ordination mechanism within the Windsor Framework process, to ensure that any retaliatory action is co-ordinated across the European Union and the United Kingdom? Secondly, considering that this is economic coercion and illegal under WTO rules, what instructions have our Ministers given to our representative at the WTO to complain against the Trump Administration’s practice?
Baroness Jones of Whitchurch (Lab)
My Lords, it is of course disappointing that the US has imposed global trade tariffs. We are determined to support UK businesses across the sector. The Government are working with the affected businesses but, as noble Lords will know, standing up for industry means finding solutions to the global challenges we face. That means working closely and pragmatically with the US to press the case for UK business interests.
Lord Empey (UUP)
My Lords, the review of the trade and co-operation agreement between the European Union and the United Kingdom will take place next year, 2026. If the Minister thinks that things are working smoothly, or that it is easy for businesses to operate, she is under a misapprehension. Have the Government started work on what the review should deal with? Do we have a policy? What consultation will the Government undertake as they prepare their negotiating position?
Baroness Jones of Whitchurch (Lab)
My Lords, the Government are seeking to strengthen and reset the relationship between the EU and the UK. Taking forward our manifesto commitments on that relationship will carry tangible benefits for businesses in Northern Ireland and the UK. The Government are committed to abiding by commitments in international agreements, including working to the Windsor Framework in good faith. That will include new negotiations going forward.
Lord Elliott of Ballinamallard (UUP)
My Lords, I hear the Minister say that there will be a reset of relationships between the UK and the EU but, if that happens, it may mean that those extra tariffs from the US will impact more on the United Kingdom as a whole. At some stage, the UK Government might have to choose between being closer to the USA and closer to the EU. Which is it?
Baroness Jones of Whitchurch (Lab)
My Lords, we will always ensure that we protect the interests of all UK businesses, including those in Northern Ireland.
Lord Watts (Lab)
Does the present position not demonstrate that Britain is being left behind in the negotiations between all the different partners in America and Europe? This is a reflection of our decision to leave Europe, and leave ourselves exposed to these measures.
Baroness Jones of Whitchurch (Lab)
My noble friend is right that we need to strengthen and reset our relationship with the EU, and that is exactly what we are attempting to do now.
Statutory Neonatal Care Pay (General) Regulations 2025
Baroness Jones of Whitchurch Excerpts(2 weeks, 6 days ago)
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Baroness Jones of Whitchurch
That the draft Regulations laid before the House on 20 January be approved.
Relevant document: 16th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 10 March.
US Steel and Aluminium Tariffs
Baroness Jones of Whitchurch Excerpts(3 weeks, 4 days ago)
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Lord Sharpe of Epsom
To ask His Majesty’s Government what steps they plan to take to mitigate the impact of US steel and aluminium tariffs on the UK manufacturing sector.
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, it is disappointing that the US has today imposed global tariffs on steel and aluminium. The UK will always be a champion of free and open trade, which is essential in delivering our Plan for Change. We are resolute in our support for the UK steel industry. This Government are working with affected companies today, and we back the industry’s application to the Trade Remedies Authority to investigate what further steps might be necessary to protect UK producers.
Lord Sharpe of Epsom (Con)
I thank the Minister for her Answer, and I am pleased to hear about the steps she is taking. To move on slightly, I was pleased to hear that the Prime Minister acknowledged, during Prime Minister’s Questions today, the Brexit benefit of seeking a trade agreement with the United States to avoid tariffs. However, while the UK looks to negotiate with Washington, the EU has already retaliated against US tariffs, so the Government must now recognise that resetting relations with the EU at this moment risks dragging the UK into an escalating transatlantic trade war. Last month, a close ally of Donald Trump, Stephen Moore, made it clear that Britain will have to choose between its special relationship with the US and closer ties to the EU. The time for vague statements and talk of all options being open is surely over; we need clarity. Now that the US and the EU are openly in a trade war, do the Government not see the urgency of making their position clear? What will the UK prioritise—the special relationship or Brussels?
Baroness Jones of Whitchurch (Lab)
My Lords, as the Prime Minister has made clear, when it comes to the national interest, he rejects having to make any false choice between allies. We are committed to continuing our work with both the US and the EU to remove barriers to trade and help UK businesses grow. Our number one priority will be the growth of the UK economy and free and open trade with our most economically important partners. We will only ever sign trade agreements which align with the UK’s national interests.
Lord Fox (LD)
My Lords, the noble Lord, Lord Callanan, speaking to the last Question, noted that the Trump Administration had been completely outrageous to Canada. By extension, it must therefore have been completely outrageous to the European Union, so it is interesting to hear the opposite being argued by the noble Lord, Lord Sharpe. Does the Minister agree that now is the time to work with our allies? The noble Baroness, Lady Chapman, said that Canada is our closest ally. The Prime Minister has said that we need to reset our relationship with the European Union. Why, then, have we taken a different approach to those two closest trading allies?
Baroness Jones of Whitchurch (Lab)
My Lords, as the Prime Minister has said, this is a time for a cool-headed approach on the issue of trade tariffs. The UK and the US have a strong economic relationship that is fair, balanced and reciprocal. The tariffs on steel, aluminium and derivatives being proposed by the Trump Administration are global; they are not targeted at the UK. In the meantime, we have been having regular, detailed conversations with the US Administration and have repeatedly and emphatically made the case for the UK to be exempt from proposed tariffs—most recently with the Secretary of State speaking to US Commerce Secretary Howard Lutnick on Sunday and US Trade Representative Jamieson Greer on Tuesday. We have made that point over and over again. This is a time for a cool-headed approach to any possible tariffs, and we will take every action we need to in order to defend the UK’s national interest.
Baroness Rafferty (Lab)
My Lords, I welcome the Opposition’s sudden interest in the fortunes of the British steel industry—a sector which was neglected over the past 15 years and has suffered enormously as a result. This Government launched a consultation on a steel strategy earlier this year. Could my noble friend update the House on the status of that consultation? How soon does she envisage the strategy being brought forward?
Baroness Jones of Whitchurch (Lab)
I thank my noble friend for raising this issue. The steel strategy consultation remains open until 30 March, at which point we will analyse responses received. The consultation is a key step forward in developing the steel strategy, ensuring it best promotes long-term, sustainable growth that will provide benefits to communities across the UK. It will provide us with a clear evidence base on the needs of the steel sector and its customers by leveraging a wide range of views and expertise and will bring those views to the heart of steel-making. We are committed to bringing forward the steel strategy in the spring, and we will learn from the lessons of that strategy.
Lord Lamont of Lerwick (Con)
My Lords, is it not the case that the reckless and ill-thought-out measures being taken by President Trump will only damage the US economy itself—they will not prevent imports but will harm immensely the steel-using industries that are the main market for the US steel industry? It is an extremely short-sighted measure by President Trump. His having taken that measure is no reason for us to follow in such a short-sighted policy. We have the much more important objective of trying to negotiate better trade terms with the United States. These are general tariffs, not ones against the UK in particular, and the Government are quite right not to react by imposing tariffs ourselves.
Baroness Jones of Whitchurch (Lab)
I very much thank the noble Lord for that intervention. Let us be clear that industry here does not want to see a trade war with both sides escalating the situation. Standing up for industry means finding a solution, and we are working on that solution. The UK and the US have a strong economic relationship which is fair, balanced and reciprocal. We have £1.2 trillion invested in each other’s economies, supporting more than 2.5 million jobs across both countries. It is important that we maintain and build on those relationships. As I said before, cool heads are aware of and monitoring very carefully what is going on, but we do not want to do anything reciprocal at this stage.
Baroness Armstrong of Hill Top (Lab)
My Lords, will my noble friend comment on how she sees the development of steel in this country? I am pleased that the Opposition are now interested in that. I represented a community that lost what I think was at the time the most cost-effective steel-making plant in the country; I then had to represent the community that was devastated following that, under Mrs Thatcher’s Government, so I am really pleased that they are now interested in putting manufacturing at the heart of this country. In the north-east, we have been developing some very good greening of the industry. Can the Minister reassure us that the plans that the Government have for growth will involve re-energising that industry so that we get the new houses and new infrastructure that we need in this country and rebuild a steel-making industry here?
Baroness Jones of Whitchurch (Lab)
I assure my noble friend that we are determined to support and invest in the steel sector. We already have plans and are taking steps to do that. We see a bright future for steel in the UK, and our plan for steel, which will be published in the spring, will establish a long-term vision for the industry, promoting long-term growth and securing jobs for the future in all parts of the country. The point that my noble friend makes is absolutely right about that. This is about ensuring jobs, protecting the industry for the future and making sure that we can go forward on a competitive basis in the global trade on this issue.
Baroness Hoey (Non-Afl)
My Lords, I think that His Majesty’s Government are quite right not to rush into retaliatory measures, but will the Minister say whether they are giving any thought to what will happen when the EU retaliates? What happens to Northern Ireland, which has been left within the EU for these kinds of matters? That is something that they need to be looking at urgently.
Baroness Jones of Whitchurch (Lab)
My Lords, Northern Ireland is a part of the United Kingdom’s customs territory and internal market. We will continue to monitor closely the impact on Northern Ireland of any tariffs. While the framework means that tariffs would apply on US goods moved into Northern Ireland for the limited subset of US goods in line with its protection of the UK and EU markets, there is a duty reimbursement scheme in place where those goods do not enter the EU. The duty reimbursement scheme enables traders to reclaim or remit applicable duties in full without any limit on total claims. Businesses moving goods into Northern Ireland should contact HMRC for more information about these schemes.
Lord Macpherson of Earl’s Court (CB)
My Lords, does the Minister agree that tariffs harm consumers and encourage industrial inefficiency? Does she agree that the British economy was at its most successful when it was pursuing a policy of unilateral free trade in the 19th century?
Baroness Jones of Whitchurch (Lab)
The noble Lord makes an important point about our commitment to free trade. The Prime Minister has made our position absolutely clear on this matter. I am sure there are lessons from history that we can learn on all of this. We will continue to promote our policy of free trade and encourage new agreements wherever it is in our interest.
Lord Liddle (Lab)
Does my noble friend agree that there is very little prospect of a comprehensive free trade agreement with the United States because of its stance on agricultural products, which we could not possibly accept? However, there is a real possibility of an agreement on high technology, and that is what we should aim for.
Baroness Jones of Whitchurch (Lab)
My noble friend is absolutely right that we are continuing to discuss with the US the possibility of a trade deal. In the economic and tech sectors, there is the possibility of agreements on the basis of mutual interest. Those discussions are ongoing, and I hope to update the House on them in due course.
Lord Swire (Con)
My Lords, while I very much welcome the action and words that the Prime Minister is using to defend the United Kingdom in this respect, does the Minister share my concern that, if the United Kingdom is to be exempt from any tariff war with the United States but the EU is not, the EU will seek some kind of revenge on the United Kingdom? What will the Government’s reaction be if that is the case?
Baroness Jones of Whitchurch (Lab)
My Lords, that is very much a hypothetical question. As I said earlier, we have very good relations with both our key partners, the US and the EU, and we will continue to aim to maintain those relationships. We have seen no sign that the EU will take any action against us, and we will continue to pursue good, friendly and trade-based relationships with the EU.
Lord West of Spithead (Lab)
My Lords, the steel that the US imports from us is specialist steel. It is interesting that, for the new ballistic missile submarines—both our own and the American ones—a common missile compartment is being designed and built by the UK. It will contain specialist steel, for which the US will pay more money. The Government are absolutely right not to take any action at this stage, because people will look again at this and there will be sensible negotiations.
Baroness Jones of Whitchurch (Lab)
My noble friend makes a very good point. As I said, we very much support the strengthening of our steel industry in this country. It is very important to us, and we are taking a number of measures to invest in and build that sector, including the specialist sectors he referred to.
Baroness Kramer (LD)
My Lords, will the Government give us an assurance that they will be extremely wary as they enter into, or continue with, trade talks with the United States? It has always sought very exploitative trade agreements to take advantage of both our National Health Service and our agriculture. The Conservatives negotiated a very weak trade treaty with Australia, which has done only damage. In these negotiations, will this Government be careful that they do not follow in the previous Conservative Government’s footsteps?
Baroness Jones of Whitchurch (Lab)
My Lords, I assure the noble Baroness that we will act only in the UK’s interest in any discussions we have with the US. The National Health Service is not on the agenda for those discussions.
Viscount Hailsham (Con)
My Lords, in our negotiations with the United States, the Minister should be very cautious on relying on expressions of good will from President Trump—it seems that they are not to be relied upon.
Baroness Jones of Whitchurch (Lab)
The US is a very strong friend and partner of this country, and we will continue to aim to maintain very good relations. We will of course take a hard-headed approach; we will not simply do deals on the expression of good will. These negotiations will be hard-headed, and they will take some time.
Neonatal Care Leave and Miscellaneous Amendments Regulations 2025
Baroness Jones of Whitchurch Excerpts(3 weeks, 6 days ago)
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Baroness Jones of Whitchurch
That the Grand Committee do consider the Neonatal Care Leave and Miscellaneous Amendments Regulations 2025.
Relevant document: 16th Report from the Secondary Legislation Scrutiny Committee
The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)
My Lords, I am delighted to bring these regulations, which were laid before the House on 2 January, forward under the Neonatal Care (Leave and Pay) Act 2023, which originated as a Private Member’s Bill during the previous Parliament. I pay tribute to Stuart McDonald—the former Member for Cumbernauld, Kilsyth and Kirkintilloch East—and the noble Baroness, Lady Wyld, for successfully steering that Private Member’s Bill through the various stages in both Houses to secure Royal Assent in 2023. The Act establishes new statutory entitlements to neonatal care leave and neonatal care pay for employed parents if their child starts to receive neonatal care within 28 days after birth and goes on to spend seven or more continuous days in care. These regulations are another step towards the implementation of neonatal care leave and pay in April this year, and they are the first to be brought before the Committee under the powers of the Act.
Currently, there is no statutory entitlement for parents of children who require neonatal care. Until now, parents in this difficult situation have had to rely on using other existing rights, such as maternity leave or annual leave, in order to be there to care for their baby and to support their partner. This approach has caused additional stress for parents. Some mothers have reported that they had to leave work because they were not ready to return at the end of their maternity leave. Because paternity leave is limited to two weeks, some fathers and partners have to rely on statutory unpaid parental leave or the compassion of their employers in order to take time off work.
Around 40,000 babies spend over one week in neonatal care each year. Once neonatal care leave and pay comes into force in April 2025, we estimate that around 60,000 parents will be eligible and that around 34,000 parents will take up paid neonatal care leave each year.
What do the SIs do? Neonatal care leave will enable eligible parents to take a minimum of one week and a maximum of 12 weeks of leave, in line with the number of weeks for which their baby receives neonatal care, on top of their other parental leave entitlements. Neonatal care leave will be a day 1 right for employees.
Statutory neonatal care pay, like other family-related pay rights, will be available to employees who also meet continuity of service and minimum earnings tests. Eligible employees must have worked for their employer for at least 26 weeks ending with the relevant week and must earn, on average, at least £125 per week before tax. If eligible, the parent will be able to claim a flat rate of £187.18 per week in the 2025-26 financial year, or 90% of their average earnings, whichever amount is lower.
Employers will administer the statutory payment on behalf of the Government. Small employers will be able to recover 103% of their statutory payment from the Exchequer, while larger employers can recover 92% of payments, and will therefore incur wage-like costs equivalent to 8% of the statutory payments they make. A similar arrangement applies for all other existing statutory parental payments.
Together, these regulations will provide protection and support for parents at an incredibly challenging time. These entitlements provide a floor, and employers can and should go further if they are able to.
We have consulted extensively with stakeholders, including charities and business representative organisations, to ensure that these regulations balance the needs of parents and businesses. These groups agreed that the proposed reforms would provide substantial benefits to businesses, including retaining the skills and knowledge of their current employees.
I will now explain a few points of detail in the regulations. These have been developed through consultation, including with the Department of Health and Social Care and NHS professionals.
We have designed a definition for neonatal care that encapsulates the different ways in which babies receive it, going beyond the walls of hospitals and including outreach care. This could include care that takes place within the family home, provided it meets the relevant criteria.
We have included outreach care in the eligibility criteria to capture the many ways in which babies receive care, and also to prevent a postcode lottery, where parents of children who receive the same clinical treatment may qualify in one area, as they receive treatment in hospital, but not in another, as they receive treatment at home through an outreach care programme.
To ensure that as many parents as possible are eligible, the definition of “parent” in the regulations encompasses adoptive parents, foster-to-adopt parents and intended parents in surrogacy arrangements. Those who meet this definition would also be required to have responsibility for the upbringing of the child and be caring for the child at the time of taking their leave and pay.
Having a baby in neonatal care is a difficult experience for any parent, whether the baby is admitted for one day or for many months. However, this entitlement will focus on parents of babies who experience prolonged stays in neonatal care, as they will be in most need of additional support. The qualifying period of neonatal care, as set out in the Act, will be a minimum of seven continuous days beginning on the day after the one on which the care starts. Starting the clock at 00.01 am—one minute past midnight—of the day after the child is admitted creates a consistent approach that does not vary from baby to baby.
Baroness Jones of Whitchurch (Lab)
My Lords, I am grateful for the support across the Committee for these regulations. Again, I thank the noble Baroness, Lady Wyld, who rightly paid tribute to the parents and campaigners; I absolutely echo that point. Without that pressure, which all Governments have received, these measures simply would not have come forward. We are very grateful for the campaigners and the parents behind all of this. The noble Baroness also mentioned cross-party working. Private Members’ Bills are often a good illustration of that; I know this from the ones I have been involved in.
The noble Baroness, Lady Wyld, asked about the people who might be excluded. That is a good question and goes some way to answering the point made by the noble Lord, Lord Sharpe. We are just setting a minimum standard here, of course. This is a minimum standard, but we encourage employers to go above and beyond it. Many do so already and recognise the benefits that this brings to their businesses. We will keep this whole issue under review; the charities and campaigners will require that of us, I think, going back to the point made by the noble Lord, Lord Sharpe. We will want to see how the rollout goes but this is a good start. As with many regulations, we want to embed this measure before we do any further evaluation of it.
The noble Lord, Lord Sharpe, asked about making sure that we have a smooth implementation so that everybody knows what is going on. My officials are working with HMRC to develop and publish guidance on GOV.UK, which will explain the requirements of the legislation. In developing this guidance, we are undertaking user testing to ensure that it is fit for purpose. Ahead of implementation, my officials have been engaging with stakeholders—including employer groups, payroll providers, IT software developers and ACAS charities—and ensuring that we have posters in neonatal wards to advertise the benefits; I hope that that will make sure that the word spreads as widely as it possibly can.
I am grateful to the noble Lord for talking about some of the other measures and family-friendly policies that the previous Government introduced. I was pleased to hear about those; I hope that it bodes well for the debates that we are going to have on the Employment Rights Bill when we come to it in due course.
In the meantime, the provisions outlined in these SIs will provide for new parents with babies in neonatal care the ability to benefit from additional time off as a day 1 right. We should not lose sight of how important that is. Currently, many working families across the UK are having to return to work while their babies are sick and receiving care. As I said before, some mothers are also having to leave work because they are simply not ready to return to work. These measures aim to address some of the difficulties that thousands of parents face when their babies are in neonatal care or afterwards. They are a huge step forward.
We hope that the change in the law will also send a signal of encouragement to employers about the significance of recognising the struggles that parents go through when their very young child is unwell and of the need to provide them with appropriate support in all ways—not just with leave and pay but in other forms of support as well. Of course, I acknowledge that many employers are already providing that support to parents, but there is more that they can do; we all have an education role to play in all of that, I think.
In the meantime, I again thank noble Lords for all their comments.