Steel Industry (Special Measures) Bill

Baroness Jones of Whitchurch Excerpts

Saturday 12th April 2025 Lords Chamber

Moved by

[Baroness Jones of Whitchurch]

That the Bill do now pass.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)]

My Lords, we are moving at pace, which is a good thing. I remain grateful to all noble Lords who have contributed to this process, in particular those who tabled amendments and those who have spoken in today’s debates.

The passing of this legislation is needed not just to protect British Steel and its 3,500 employees; it is needed to protect the future of the UK steel industry to forge the steel needed in our railways, homes and critical infrastructure. That is what is at stake here, which is why I am grateful to all those who have supported the Government in our action today. Our decision to protect UK steel-making now and long into the future is essential.

We know that events such as this are exceptionally rare, but the Government would never have requested a reconvening of Parliament were it not absolutely necessary. The emergency legislation introduced to this House means that the Government will now be able to order the iron ore, coal and other raw materials needed to keep the blast furnaces at Scunthorpe running.

I am grateful to everyone who has played a part in getting this legislation over the line. This includes noble Lords in this place, officials at the Department for Business and Trade, those in departments across government who have worked on the Bill, and the staff here on the estate who were called in at incredibly short notice. It is thanks to all those efforts that we can protect steel-making in this country now and for years to come. I beg to move.

[Lord Davies of Gower (Con)]

My Lords, I shall be very brief. I just want to say that this is a very important and necessary debate, and it is right that we have had it today to do everything we can to support our remaining steel industry. I have sadly witnessed the demise of this great industry in Wales, particularly south Wales. As I say, we must do all we can to protect Scunthorpe, and this emergency Bill is intended to do just that.

It has been a very good debate, with passion from all sides of your Lordships’ House. On behalf of His Majesty’s loyal Opposition, I thank all noble Lords for their contributions. In particular, I thank the Minister for her part in this. Without further ado, I wish noble Lords well for the rest of the recess and a particularly happy Easter.

Steel Industry (Special Measures) Bill

Baroness Jones of Whitchurch Excerpts

Saturday 12th April 2025 Lords Chamber

[Baroness Butler-Sloss (CB)]

My Lords, I entirely support the Bill and I ask this question only because I am concerned about exactly what is meant by Clause 3(4)(a) saying that the Secretary of State can enter a premises “using force if necessary”. How is that expected to work?

[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 sure that by now noble Lords will be more than familiar with what the Government are seeking to do with this legislation. It will allow us to take control of British Steel’s blast furnaces, maintaining steel production and, by extension, protecting the company’s 3,500-strong workforce. As such, I will turn swiftly to the amendments at hand.

Noble Lords across the House have raised a number of important issues relating to the parliamentary scrutiny of this Bill. I want to reassure noble Lords that this Government take these concerns very seriously. With regard to the amendment in the name of the noble Lord, Lord Hunt of Wirral, that seeks to add a sunset clause to the Bill, I will reiterate what I said earlier: because of the speed at which this legislation has been drafted and the uncertainty of the situation, it was neither necessary nor appropriate to set a timeline on those specific interventions. As noble Lords are keenly aware, the current international situation is unpredictable. A fixed sunset clause would not be practical and would cause an unacceptable amount of uncertainty if a solution to the issue at hand became protracted. In those circumstances, we might have to come back to Parliament and go over this whole process again.

We can revoke directions given to a particular steel company at any time once the need for intervention has passed. As I have said, we would welcome working with the Business and Trade Select Committee in the other place and relevant committees of your Lordships’ House, to make sure that we work with your Lordships and Members of the other place and keep everyone updated, so that these powers are not in place any longer than is absolutely necessary.

I was clear in the debate earlier today that the Government will provide an update to Parliament every four sitting weeks, as well as providing information to relevant Select Committees. I do not want to pre-empt discussions in the usual channels across both Houses about the nature of these updates, but it is our intention that the first instance will be an Oral Statement and that subsequent updates will be made in an appropriate manner. What this means in practice will be subject to further discussion but could, for example, be determined by the reality on the ground at that time.

Given the interest in both the steel sector and the use of powers in this Bill, I can confirm that my noble friend the Chief Whip will facilitate a fuller debate on the Floor of the House on the operation of what will then be the Act. This will take place within six months, with exact details to be subject to further discussion in the usual channels. In addition, as stated in the Government’s letter to all Peers this morning, we intend to publish our steel strategy in the spring. We will continue other related work, such as on our modern industrial strategy, and we will of course update noble Lords on that as well. All of these moments will allow scrutiny of the Government’s use of the powers in this Bill and of our wider efforts to support the vitally important steel industry.

The noble Lord, Lord Hunt, draws attention to Clause 3(2) and his concern about the words that the Secretary of State can do “anything”. I have to say to him that those words need to be read in conjunction with the rest of that sentence, which limits them to anything that a

“relevant person in relation to that undertaking could do”.

It is for only a very specific purpose. I hope that this commitment satisfies the concerns raised by the noble Lord, Lord Fox, and the noble Baroness, Lady Coffey.

I underline that a sunset clause would create further uncertainty for thousands of workers, who need to know that their jobs are secure on a long-term basis. Inserting a sunset clause would create an arbitrary deadline by which the long-term future of that plant would need to be settled. As I said before, nothing is off the table in our response to securing the future of steel in this country. We should send a strong message today to those whose livelihoods depend on the steel sector that this Parliament stands behind them.

The amendment of the noble Baroness, Lady Freeman, seeks to add to Clause 3(2), after “the Secretary of State”, the words,

“or a responsible person they designate”.

I can confirm that Clause 3(2) entitles the Secretary of State to do

“anything … that the steel undertaking, or any relevant person … could do”.

So officials can act in the name of the Secretary of State.

Regarding the question of the noble Lord, Lord Moylan, about using force if necessary, this will be a statutory power to be carried out by those acting on behalf of the Secretary of State. Officials or their agents could use force to enter the premises, but this would have to be lawful force; therefore, they could not assault anyone, and there would have to be clear barriers on their actions. It is up to police judgment as to whether they would intervene, based on usual policing principles.

I hope I have been able to provide reassurance on all these matters. I therefore respectfully ask that all the amendments in this group are not pressed.

[Lord Hunt of Wirral (Con)]

My Lords, I join the Minister in wanting to send a strong message from Parliament to all those involved in the Scunthorpe steelworks that we are solidly in support of them, and that everything we do today is directed to that end.

Turning to my amendment and the debate we have just had, I think that the noble Baroness, Lady Freeman, made a very important point about civil servants being able to act in the name of the Secretary of State. My noble friend Lady Coffey confirmed that that was the case, so at least we know where we are.

I thank the noble Lord, Lord Fox, very much indeed. He and I have been working together on this as hard as we possibly can to find a way through, because we do not want to stop this action in its tracks—far from it. We just feel that Parliament—in particular, the House of Lords—and the words of our Constitution Committee should not be disregarded. The committee has a right to stress the importance of sunset clauses.

However, having heard this debate, I am quite happy, following discussions through the usual channels, to indicate that such a debate could be postponed until we know a little more clearly where we are. In six months’ time, if we are to have—as the noble Lord, Lord Fox, and the noble Baroness, Lady Brinton, have suggested—what he referred to as a substantive debate, and, as the Minister said, further debate on the operation of this legislation, we have made a great deal of progress. The voice of this Chamber has been heard, and I am very pleased to have been able to speak in this debate. I say to my noble friend Lord Moylan that he and I still await the reply to the question that he posed, but no doubt the Minister will write.

I do not think that the noble and learned Baroness, Lady Butler-Sloss, has had an answer to her point about force. That is something that we will have to leave for another day, but it is a very important issue. We should not be giving powers in this Parliament to individuals to use force without clarifying exactly the circumstances in which they can be used.

All in all, we have reached a reasonable conclusion, and I am very grateful to the Minister for having listened so carefully and taken to heart the concerns of this Chamber about the need for this legislation to have an end date. We will return to that in the debate that we will have in October on a substantive Motion, as the noble Lord, Lord Fox, said. In the meantime, I beg leave to withdraw my amendment.

Steel Industry (Special Measures) Bill

Baroness Jones of Whitchurch Excerpts

Saturday 12th April 2025 Lords Chamber

Moved by

[Baroness Jones of Whitchurch]

That the Bill be now read a second time.

[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, for the record, we debated the purpose of this Bill earlier today.

Bill read a second time and committed to a Committee of the Whole House.

Steel Industry

Baroness Jones of Whitchurch Excerpts

Saturday 12th April 2025 Lords Chamber

Moved by

[Baroness Jones of Whitchurch]

To move that this House takes note of His Majesty’s Government’s legislative proposals to ensure the continued operation of the steel industry in the light of the Steel Industry (Special Measures) Bill.

[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 House has reconvened under exceptional circumstances, which merit an exceptional response from the Government. Our request to recall Parliament was not made lightly, and I am grateful to noble Lords on all sides of the House for being here today as the Government seek to pass this emergency legislation.

This legislation allows the Government to take control of British Steel’s blast furnaces, maintaining steel production and, by extension, protecting the company’s 3,500-strong workforce. I reassure noble Lords that, given the exceptional nature of a recall, the Government thought it better to limit the powers in the Bill—which are still significant—rather than introduce more complex matters of property rights and public ownership at the same time. This is not about nationalisation. We are keeping all options under review, and we will of course return to Parliament for further scrutiny should the need arise.

As noble Lords will know, since taking office, the Government have been negotiating in good faith with British Steel’s owners, Jingye. We have sought to prevent the early closure of the two blast furnaces at the company’s Scunthorpe site, which Jingye has claimed are no longer financially viable. We have worked tirelessly to find a way forward, making a generous offer of support to British Steel with sensible, common-sense conditions to protect the workforce and UK taxpayers, and to create a commercially viable company for the future. Jingye’s refusal to accept the deal on the table, and to accelerate the closure of the blast furnaces at Scunthorpe, has left us no other choice: we must now take control of the company’s blast furnaces.

Let there be no doubt: this Government will never hesitate to take action to protect this nation’s assets. We will not abandon the hard-working steel-making communities that have given so much to both our economy and country. Where vital industries are on the verge of collapse or where communities face devastation, we will always act in the national interest.

We do not accept the argument that steel-making has no future in the UK. As the Prime Minister asserted yesterday, our plan for change means that domestic demand for steel is set only to go up, not down. In the last few weeks alone, we have seen Heathrow Airport announce multi-billion-pound expansion plans requiring 400,000 tonnes of new steel. We have seen Universal Studios confirm that it will build Europe’s biggest theme park, and, where possible, it will use UK-made steel to make it. We need British steel for this and our critical infrastructure projects, from rail to renewable energy. We need it to keep Britain secure at home and strong abroad.

The legislation we are setting out today will also help end the uncertainty that has been hanging over British Steel’s Scunthorpe site for far too long. We know that rebuilding our steel industry brings its fair share of challenges, but we believe that they are worth facing and that we are more than prepared to overcome them. It is why we agreed a new deal with better protections for workers at Port Talbot within weeks of taking office, which will transform production and deliver a modern electric arc furnace. It is why we have delivered measures as part of the British industry supercharger to cut electricity costs for steel firms and bring prices more in line with international competitors.

It is why we have simplified public procurement, aligning it with our industrial strategy, which is putting UK firms, including those in the steel industry, in the best possible position to bid for and win public contracts. It is why we launched a consultation on our steel strategy as part of an effort to work with industry on overcoming difficult issues, such as high electricity costs and unfair trading practices, so that we can protect the UK’s industrial heartlands.

It is why we have taken the decision today to safeguard British Steel. Britain is a steel-making country. Steel-making has been fundamental to Britain’s industrial strength, security and identity as a global power. Today’s legislation will help ensure that we can retain that steel-making capability here in the UK, both now and for many years to come, and I urge the House to support it. I beg to move.

--- Later in debate ---

[Baroness Jones of Whitchurch (Lab)]

My Lords, I thank all noble Lords not just for participating in this debate but for returning to this place in these exceptional circumstances. Before I respond to the comments that have been made, I reiterate the points made by the Prime Minister yesterday and by the Business Secretary in the other place today: the Government have always said from the outset of their negotiations with Jingye that we would keep every option on the table and act in the national interest to protect British jobs.

UK-forged steel built our railways, bridges and buildings. It is an integral part of our economic future, as it has been in our industrial past. That is why we need to pass this legislation today. I am therefore grateful to my noble friends Lord Reid, Lord Tunnicliffe, Lord West, Lady Drake, Lord Glasman and Lord Hanworth, and to my noble and learned friend Lord Falconer for reminding us how fundamental steel is to our infrastructure and our future economic growth plans. I also thank the noble Baroness, Lady Redfern, and my noble friend Lady Ramsey, who reminded us of the human cost of the potential closure of the Scunthorpe site. We reiterate our commitment to protecting jobs and communities impacted by that potential closure.

The noble Lords, Lord Hunt and Lord Moylan, complained about the urgency with which we have had to rush this legislation through. I think they do not appreciate the urgency of the situation we find ourselves in. Those blast furnaces were in danger of failing within days. That is why we are here today and why this action was so necessary. Like the noble Lord, Lord Fox, I am not inclined to take lessons from the party opposite, given their record over the previous 14 years. In her year and a half as the Business and Trade Secretary, Kemi Badenoch met UK steel companies on just three occasions. On the party opposite’s watch, UK steel production plummeted by 4 million metric tonnes between 2010 and 2023—an eye-watering fall of 42% in manufacturing. The UK went from the 17th largest steel producer in the world to the 26th largest over that period. The economic output of UK steel halved to £2.3 billion in that time. The noble Lord, Lord Hunt, heralded the use of coal and the opportunities that it would provide. I must remind him that it was his party that closed the coal mines and made us reliant on imported coal in the first place.

The noble Lord, Lord Moylan, asked if we would apologise. The Government will not apologise for acting in the national interest. As my right honourable friend said in the other place, this issue should have been resolved years ago. The situation we inherited across the board on assuming office is one in which most of our foundation industries found themselves in difficulty. Since 2010, UK crude steel production has almost halved. We know that rebuilding our steel industry after years of neglect will be a challenge, but it is one that this Government have grasped and it is why today, where others have shied, we have stepped up to take action.

I move on to some of the points that have been made. The noble Baroness, Lady Brinton, asked about the legal advice from the Attorney-General. It is the Government’s policy not to discuss advice provided to the Government.

The noble Baroness, Lady Coffey, asked about Teesside. Ultimately, British Steel has been responsible for commercial decisions regarding its location strategy. The Government were right to prioritise protecting as many jobs as possible during those negotiations, but it is not right to force job losses in Scunthorpe to benefit Teesside. However, of course we want to do the best we can by Teesside communities, so the Government are continuing to work with the Tees Valley Combined Authority and local partners on regional investment and growth opportunities.

The noble Lord, Lord Fox, asked about international law and our obligations. I can assure him that everything we do is in compliance with our international law obligations under the WTO, the GATT framework and international law more generally. I reassure him that we are entirely satisfied that these short-term powers are within the terms of our international law obligations.

The noble Lord, Lord Kerr, the noble Baroness, Lady Brinton, and others asked whether compensation would be paid. We need compensation provision within the Bill to preserve the investment climate and to comply with international standards, but the chances of compensation being recovered are slim because the powers are there to protect the company’s assets, not to damage them. Compensation would also have to be done via an SI, which would be subject to parliamentary scrutiny through the negative resolution.

The noble Baroness, Lady Brinton, also asked whether the Bill’s powers were overreaching for the Secretary of State. The powers are linked to what a relevant person could have done. Basically, they are to do anything that management is empowered to do, so they are there within those confines.

The noble Lord, Lord Hunt, the noble Baronesses, Lady Brinton and Lady Laing, and other noble Lords asked about the sunset clause. Because of the speed at which the legislation has been drafted and the uncertainty of the situation, it was neither necessary nor appropriate to set a timeline for these specific interventions. The current international situation is unpredictable, so a fixed sunset clause would not be workable or acceptable, as we might have to come back to Parliament and do it all again. We can, of course, revoke directions at any time in relation to a particular steel company once the need for intervention has passed. We would welcome working with the Business and Trade Select Committee to make sure we work with Members and keep them updated so that these powers are not in place any longer than is absolutely necessary. We understand the concern of the House about the use of these powers, and it is right that Parliament closely monitors this. We will be updating the House every four weeks on the use of these powers.

[Lord Fox (LD)]

My Lords, I thank the Minister for those words. What this House seeks, rather than an update, is the opportunity to invoke these powers in a way that they appear to be intended. They have been called emergency powers, and the Minister has called them short-term powers. Will the Government, within six months of this Bill coming into force, commit to having a substantive debate, in both Houses, to determine whether the Act will continue and to acting on any resolution of the House of Commons on the further continuation of those powers?

[Baroness Jones of Whitchurch (Lab)]

My Lords, I have been here on a number of occasions answering questions on the situation with steel. In the future, we will continue to engage as widely as we have done to make sure that Parliament is updated on these matters. As I have said, we will update the House every four sitting weeks on the use of these powers. I honestly think that, in these circumstances, that is sufficient.

[The Earl of Kinnoull (CB)]

The Business and Trade Select Committee, which the Minister just spoke of, is a House of Commons committee. Within our own House, we have the Industry and Regulators Committee. Are the Government proposing that they would offer the same service, as it were, to our committee as well?

[Baroness Jones of Whitchurch (Lab)]

I thank the noble Earl for raising that question. I am sure that we would be happy to consult with the relevant committees within your Lordships’ House as well.

A number of noble Lords, including the noble Lord, Lord Hunt, asked about the cost of providing these safeguards. We are directing British Steel to act in a way that safeguards its assets, and this funding should be provided by the company. If the Government need to spend money, we will look to recover that from the company if we can and where reasonable. We have committed up to £2.5 billion for steel, via the National Wealth Fund and other routes, and no further government borrowing is envisaged to support any intervention. The alternative would be importing steel at considerable extra cost to our economy. As noble Lords have pointed out, we would then be the only country in the G20 without domestic steel production. There is a cost either way, and we must balance those costs when we make decisions going forward.

The noble Lord, Lord Sikka, asked what was happening in Port Talbot and whether we are nationalising British Steel in response to this situation. As I made clear in my opening comments, we are not nationalising anything. We have put forward a Bill to ensure the continued safe operation of the blast furnaces. Without swift intervention, there was a risk of accelerated closure, jeopardising the safety and production outcomes of British Steel.

Tata Steel decided to close the blast furnaces at Port Talbot in January 2024 under the previous Government, and the decision to provide a grant agreement towards Port Talbot’s transition project was made by the previous Government. This transition was already well under way by the time we came into office. This is the point that the noble Lord, Lord Davies, made. However, I say to the House that we negotiated an improved deal with Tata, after just 10 weeks in office, with better terms for workers, future investment opportunities for the area and the highest voluntary redundancy package Tata has ever offered. Since then, we have provided more than £50 million directly to the local community, from the £80 million available from the UK Government to help people learn new skills, to support the supply chain and to protect people’s mental health.

The noble Lord, Lord Kerr, the noble Baroness, Lady Jones, and others asked about the endgame for British Steel. Our long-term aspiration for British Steel remains a co-investment agreement with a private sector partner to secure a long-term transformation. We are determined to see a bright and profitable future for steel-making in this country.

A number of noble Lords asked about energy prices and the cost of energy. The Government are committed to tackling high industrial prices in the UK. The British industry supercharger package of measures for energy-intensive industries came into force in April 2024 and brings energy costs for strategically important UK industries, including steel, closer in line with other major economies around the world, so that they remain competitive on the world stage. Once fully implemented in April 2025, the measures will save eligible businesses on average £24 to £31 per megawatt hour on their electricity costs. The total value of reduced electricity prices is estimated to be between £320 million and £410 million in 2025 and around £5.1 billion over 10 years. This will help keep business energy costs down.

To reiterate the point about future scrutiny of the implementation of the Bill, as the Secretary of State said in the other place, we are happy to engage with relevant committees, and I am happy to keep the House updated on these matters. We will continue to update the House every four sitting weeks on the use of these powers.

[Lord Hunt of Wirral (Con)]

Can I just say to the Minister how grateful we are that she understands the House’s concern about the use of these powers? As I understand it, she has told the House that she will return every four weeks to update the House on the use of the powers. However, she was intervened on by the noble Lord, Lord Fox, to suggest that she might go a little further than that and have a clear debate after six months. I still think that this whole question of a sunset clause is very relevant indeed. Can the Minister expand on what she said earlier—that she believes that a fixed sunset clause would not be workable or acceptable? Why not? It is generally accepted in this House that powers of this nature should have a sunset clause. Can she perhaps expand on that and give a little more detail before we consider whether to table such an amendment?

[Baroness Jones of Whitchurch (Lab)]

My Lords, I thought I had answered that point. The Bill, as it stands here, is to deal with one emergency. As we know, it is a volatile sector and we might need to use those powers at other times. We will use them judiciously and with care, and, as I keep saying, we will continue to update the House as to the use of those powers. We do not feel that a sunset clause is necessary or desirable in this Bill. To clarify, my general comment to the noble Lord was that we would continue to engage with the Lords committees to make sure that they are fully updated with progress going forward.

In concluding this debate, I convey my thanks to all noble Lords for their thoughtful contributions and for helping us to pass this legislation so that we can retain steel-making capacity in the UK—for British workers’ security, for British industry’s future and for the future of British Steel workers and their families. That is our priority and that is how we intend to go forward.

[Baroness Brinton (LD)]

The Minister did not respond to my specific question about ensuring that the amount of any compensation paid under the terms of the Bill would be absolutely clear and stated to the public and to Parliament.

[Baroness Jones of Whitchurch (Lab)]

The noble Baroness makes a reasonable point. I am sure that we can accommodate that and make sure that that information is available.

[Lord Davies of Gower (Con)]

Can I just point out to the Minister that I asked a number a questions that she has not answered? Will she look at the record and write to me?

[Baroness Jones of Whitchurch (Lab)]

I apologise to the noble Lord—he was speaking more quickly than I can write. I will endeavour to respond to the points that I have not been able to respond to so far.

[Baroness Jones of Moulsecoomb (GP)]

Before the Minister sits down again, I made a specific point about whether nationalisation was one of the options on the table under review.

[Baroness Jones of Whitchurch (Lab)]

I make it clear that nothing is off the table. All options will be considered. I have also made it clear that this Bill is not about nationalising steel. If we need to take any further steps, we will obviously have to come back to the House with further proposals.

[Baroness Butler-Sloss (CB)]

What opportunity will this House have to reflect on the Bill?

[Baroness Jones of Whitchurch (Lab)]

Obviously, we have had a full debate today. As I said, we will come back regularly to report on progress to the House, including to the relevant committees of the House, so there will be plenty of opportunities to measure the implementation of the Bill as we go forward.

Motion agreed.

Electronic Communications (Networks and Services) (Designated Vendor Directions) (Penalties) Order 2025

Baroness Jones of Whitchurch Excerpts

Monday 31st March 2025 Lords Chamber

Moved by

[Baroness Jones of Whitchurch]

That the draft Order laid before the House on 11 February be approved. Considered in Grand Committee on 25 March.

Motion agreed.

Employment Rights Bill: Productivity

Baroness Jones of Whitchurch Excerpts

Monday 31st March 2025 Lords Chamber

[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?

--- Later in debate ---

[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 Fox (LD)]

My Lords—

--- Later in debate ---

[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.

[Noble Lords]

Oh!

[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

Monday 31st March 2025 Lords Chamber

[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 Excerpts

2nd reading
Thursday 27th March 2025 Lords Chamber

Moved by

[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.

--- Later in debate ---

[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.

Bill read a second time.

Moved by

[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.

Motion agreed.

Electronic Communications (Networks and Services) (Designated Vendor Directions) (Penalties) Order 2025

Baroness Jones of Whitchurch Excerpts

Tuesday 25th March 2025 Grand Committee

Moved by

[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.

--- Later in debate ---

In conclusion, we recognise the importance of securing the UK’s telecoms infrastructure against international security threats, but it is also important that we carefully consider the potential economic and sectoral impacts of the penalties regime set out in this SI. I think we would all agree that the proportionality of penalties, the economic impact on the telecoms sector and the transparency of the enforcement process all warrant ongoing further scrutiny. We look forward very much to hearing the Minister’s clarification on these issues, as well as any update on the progress of the removal of Huawei equipment, which, of course, is a significant part of this broader effort.

[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?

--- Later in debate ---

[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.

Motion agreed.

Israel: Arms Exports

Baroness Jones of Whitchurch Excerpts

Tuesday 25th March 2025 Lords Chamber

[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.