Employment Rights Bill

Baroness Jones of Whitchurch Excerpts

Report stage
Wednesday 23rd July 2025 Lords Chamber

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

My Lords we have had an extensive debate that indeed feels a bit like another day in Committee, but I know we all want to move on so I will try to be as brief as I can.

Amendment 147 was tabled by the noble Lord, Lord Burns, and I thank him for the ongoing engagement that we have had on the topic of political funds throughout the progress of the Bill in this House. In drafting the Bill, we have of course been mindful of the lessons learned in the conclusions of the Burns committee on trade union political funds and political party funding. I am also grateful to my noble friends Lord Monks, Lord Barber and Lord Whitty for reminding us that the compromise at that time was not intended to be a long-term arrangement, particularly because of the imbalance then, which still exists, in political party funding, which has yet to be addressed.

In the meantime, the Government believe that the 2016 Act places unnecessary red tape on trade union activity that works against their core role of negotiating, dispute resolution and giving a voice to working people. We are seeking to redress that balance and remove the burdensome requirements on how unions manage their political funds. This is why the repeal of the 2016 Act was a manifesto commitment. By reverting back to the automatic opt-in for new members, we are simply returning to a long-standing precedent that was altered by the previous Government through the 2016 Act. Prior to that, automatic opt-in was in place for 70 years, even during the Thatcher and Major Administrations.

The noble Baroness, Lady Cash, raised the issue of Article 11. The Government are confident that our measures relating to political funds comply with Article 11 of the European Convention on Human Rights. Article 11 provides the right to freedom of peaceful assembly and freedom of association with others, including the right to form and join trade unions for the protection of their interests.

Unlike subscriptions in the private sector, when we speak about unions and their political funds we are ultimately talking about voluntary organisations whose members have willingly come together to represent their collective interests. Political funds are one mechanism that unions can utilise to further their shared goals. Political funds are not just about affiliation to political parties; they can allow unions to participate in and campaign on a range of issues in their members’ interests. Examples include lobbying MPs, broader public campaigns, research to develop policy ideas and paying travel expenses for workers to attend Parliament to give evidence on issues that they face at work.

[Lord Balfe (Con)]

BALPA, the union of which I am president, does all those things without a political fund.

[Baroness Jones of Whitchurch (Lab)]

Political campaigning, which the noble Lord will know is clearly spelled out already in the legislation, requires some of these issues to be paid for out of the political fund, Indeed, my own union, UNISON, operates two separate political funds, as my noble friend Lord Prentis explained in Committee, one of which relates to the party-political affiliation and the other to the wider campaigning role. Of course, not all political party payments have gone to the Labour Party; they have gone to other parties and candidates as well.

The payments must be established through the democratic structure of the union. Those same structures make unions accountable to their members, who are free to participate in the democratic process to shape how those political funds are utilised. Joining a trade union is an informed decision and members will be made aware of their right to opt out of political fund contributions. Indeed, we have been careful to draft the Bill to ensure that new members will continue to be notified of their right to opt out on the membership form when they join the union. In line with the recommendation in the report of the committee of the noble Lord, Lord Burns, the membership form will also have to make it clear that opting out will not affect other aspects of their membership. Those changes should help to address concerns that trade union members were not always aware of their right to opt out of the political fund under the system that existed before 2016. If members wish to exercise that right to opt out, they are free to do so at any time.

We are not altering the arrangement for existing union members. If they decided to join a union with the knowledge that they would be opted out of political fund contributions, they will continue to be opted out once the Bill passes. As I hope I have explained, automatic opt-in will reduce the administrative burden on unions while still allowing members to make an active choice not to contribute to the political fund if they so wish.

I turn to Amendment 148 tabled by the noble Lord, Lord Sharpe, and Amendment 149 tabled by the noble Lord, Lord Evans of Rainow. The existence of the 50% turnout threshold is not in line with the Government’s intention to create a positive and modern framework for trade union legislation—a framework that delivers productive and constructive engagement, reduces bureaucratic hurdles and respects unions’ democratic mandates.

The 50% threshold is a high bar and is not consistent with other democratic decision-making. Votes in Parliament and votes for MPs and local councillors do not normally include any turnout threshold but are not thereby considered any less legitimate. Indeed, most local elections are contested with a turnout below 50%—I am sure that a number of noble Lords who have previously been councillors have been elected on a less than 50% turnout—and nor, for the most part, do votes at general meetings of companies require any turnout threshold. Those who oppose industrial action are free to vote against it in a ballot, and they will have their voices heard in the normal way.

The Government have been clear about our intention to repeal the Trade Union Act 2016, including industrial action ballot thresholds, but the amendments would prevent the Government delivering on that manifesto commitment. I was pleased to hear the support of the noble Lord, Lord Goddard, for upholding our manifesto commitments, and I will remind him of that when we come to vote on these amendments.

The date for the repeal of the 50% threshold will be set out in regulations at a future date, with the intention that it is aligned with the establishment of e-balloting as an option for trade unions. Together with the delivery of modern and secure workplace balloting, the intention is that this will ensure that industrial action mandates will have broad and demonstrable support.

As I expected, the noble Lord, Lord Sharpe, talked about the doctors’ strike. The Secretary of State has held constructive meetings with the BMA resident doctors committee to try to avert strike action by discussing how we can work together to improve the working lives of resident doctors. However, the BMA RDC has refused to engage in further discussions and has instead chosen to proceed with its planned strikes. Our view is that strikes have a serious cost to patients, so once again we urge the BMA to call them off and instead work together to improve members’ working conditions and to continue rebuilding the NHS.

On Amendment 149ZA tabled by the noble Lord, Lord Sharpe, the Government have made it clear that we do not intend to make sectoral carve-outs for the limitations and conditions that apply to industrial action. That is demonstrated by our repeal of the Strikes (Minimum Service Levels) Act and the repeal of the 40% support threshold for industrial action ballots, both of which remove the further conditions on industrial action that currently exist in some public services.

Ensuring that statutory notice periods for industrial action are consistent across every sector will ensure that the rules are straightforward and clear to all parties involved in industrial action in every circumstance. It is then for employers in each sector to be mindful of these rules and manage their industrial relations and businesses accordingly.

I also want to make it clear that repeal of the 14-day notice period forms part of our manifesto commitment to reverse the Trade Union Act 2016. Following the outcome of our public consultation on creating a modern framework for industrial relations, we decided that a 10-day notice period for strikes was the appropriate balance between giving employers time to prepare and upholding the right to strike. It is also a minimum, not a maximum, period and employers will be able to plan for industrial action long before receipt of a notice.

Our approach is not an outlier. The UK will still provide one of the longer industrial action notice periods in Europe. Many European countries have shorter or no notice requirements on industrial action, while also requiring airlines to comply with the EU version of Regulation 261/2004. We are aware that under Regulation 261/2004 an airline may be liable to pay passengers compensation if it cancels a flight less than two weeks before its scheduled departure. But even under the current 14-day industrial action notice period, in practice airlines may therefore still be liable to pay compensation if they need to cancel flights due to industrial action.

I turn to Amendments 149A and 150, tabled by the noble Lord, Lord Sharpe. As the period of disruption between 2022 and 2024 has shown, administrative requirements and bureaucratic hurdles only make it more difficult for trade unions to engage in good-faith negotiations with employers. This is why we are substantially repealing the Trade Union Act 2016 and fixing the foundations for industrial relations that have not delivered for workers, employers or unions in the meantime.

Legislation governing picket lines is, of course, essential and, to be clear, we are repealing only those additional measures introduced by the Trade Union Act 2016 in relation to the role of a picket supervisor. Substantially repealing this in the Act is also a manifesto commitment, while other legislation relating to picketing will remain in place. Picketing must take place at a lawful location, it must be peaceful and those on picket lines must not intimidate or harass workers who choose to attend work. The existing Code of Practice on Picketing, once updated to remove the requirement for a picketing supervisor, will continue to support the legislation on picketing. Together these are sufficient to ensure the operation of peaceful picketing.

The Government’s impact assessment on the repeal of the Trade Union Act 2016, published in October 2024, set out the expected impacts of the removal of the requirement for a picketing supervisor and is available for all to read. The assessment shows limited evidence of serious problems on picket lines prior to the introduction of the 2016 Act, and there remains limited evidence of problems on picket lines in more recent years. The assessment concluded that it is therefore unlikely that the removal of the additional legal requirement to appoint a picketing supervisor will have a noticeable effect on the impact of picketing during disputes. There is nothing new to add to that assessment; we are simply returning the law on picketing to what it was prior to 2016 when it was working well and understood by all parties.

I turn to Amendments 152A and 152B, tabled by the noble Lord, Lord Leigh of Hurley. I think on previous occasions the noble Lord has reminded us of his role as treasurer of the Conservative Party, although he did not on this occasion. Clauses 77 and 78 of the Bill, which these amendments would—

[Lord Leigh of Hurley (Con)]

I am sure the noble Baroness is aware that positions that do not require financial remuneration do not need to be declared. I did, in fact, make that declaration at Second Reading and in Committee and no further declaration is required.

[Baroness Jones of Whitchurch (Lab)]

I think that is the point I was making; I was just reminding the noble Lord. He could have reminded us on this occasion, given that a number of his points were very much party-political ones.

Clauses 77 and 78 of the Bill, which these amendments would omit, remove burdensome requirements and regulation on unions imposed by the Trade Union Act 2016. This red tape works against unions’ core role of negotiating and dispute resolution, which is why we made a manifesto commitment to repeal the Trade Union Act 2016. In relation to Clause 77, trade unions will continue to submit an annual return to the certification officer; however, the amount of information required in that return will be less.

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[Lord Leigh of Hurley (Con)]

Can the Minister be quite clear with us in that case? She said that unions will be required to report to the certification officer gross amounts of income and expenses. Can she be crystal clear that there will be no requirement to disclose expenses made within the political fund to any organisation?

[Baroness Jones of Whitchurch (Lab)]

My understanding is that the political funds will be required to continue to spell out how they are spending the money, but not for sums under £2,000. The certification officer will continue to be able to enforce remaining annual return requirements—

[Lord Leigh of Hurley (Con)]

I am sure the Minister would not like to have on record something that does not seem to be correct. I think she means that amounts under £2,000 need not be disclosed.

[Baroness Jones of Whitchurch (Lab)]

That is what I said.

We are simply returning to the situation as it was pre-2016. I would add that the unions are already specifically regulated in the requirement to have a separate fund for spending on political purposes that is subject to many rules. There is no such requirement on many other membership organisations.

I turn to the amendment tabled by my noble friend Lord Davies of Brixton relating to Clause 62 on equality representatives. Trade unions have long fought for equality. We recognise that equality reps have a key role to play in raising awareness and promoting equal rights for all members, as well as developing collective policies and practices that will enable organisations to realise all the benefits of being an equal opportunities employer. New Section 168B(2)(a) therefore provides for the broad purpose for equality representatives to take paid time off for carrying out duties

“for the purpose of promoting the value of equality in the workplace”.

In addition, new Section 168B(2)(c) makes provision for

“providing information, advice or support to qualifying members of the trade union in relation to matters relating to equality in the workplace”,

and new Section 168(2)(d) makes provision for

“consulting with the employer on matters relating to equality in the workplace”.

Finally, equality representatives may also be eligible for time off under Section 168 of the 1992 Act, which includes time off for

“negotiations with the employer related to or connected with matters falling within section 178 … in … which the trade union is recognised by the employer”.

We believe that these measures are broad enough to include a range of activities, which encompass collective bargaining, negotiating with employers and representing members. I ask the noble Lord, Lord Burns, to withdraw Amendment 147.

[Lord Burns (CB)]

My Lords, I am grateful to all who have contributed to the debate, particularly the noble Baroness, Lady Finn, and the noble Lord, Lord Sharpe of Epsom, who added their names to the amendment. I am also very grateful for the meetings I have had with the Minister. However, I am disappointed that I have failed to move her thinking in any serious way on this issue.

I welcome the support of the use of active consent in making contributions to political funds. The noble Baroness, Lady Fox, made a very good point that unions should not be frightened of giving members a clear choice. From those who have disagreed we have heard very little in the way of new arguments for ditching the 2016 compromise, other than a desire to persuade members to contribute more by relying on their inertia.

I enjoyed the history lesson from the noble Lord, Lord Barber. I agree entirely that it is quite astonishing; as I discovered at the time of the committee, political funds were illegal prior to 1909. I agree with the noble Lord, Lord Whitty, about the need for an agreement on party funding. The issue is: which is the right mechanism until then? Is it the 2016 compromise or the 1945 model? The noble Lord, Lord Monks, said he is worried that in 10 years’ time all members will be covered by the 2016 compromise. He will not be surprised that I do not think that this is necessarily a bad thing.

I remain bewildered by the desire to go ahead with the proposal in the Bill. I do not think the compromise should last for ever, but it is surely preferable to the 1945 version. I am very disappointed that there is no appetite for finding a way of dealing with this that gives some hope that it will stand the test of time. I have heard no recognition that views on the ethics of this type of choice have moved on since 1945 and that the arrival of a digital world increases the options for dealing with this in a different way. Instead, what we have is a desire to go back to the 1945 mechanism. Therefore, I would like to seek the opinion of the House.

Employment Rights Bill

Baroness Jones of Whitchurch Excerpts

Report stage
Wednesday 16th July 2025 Lords Chamber

[Lord Goddard of Stockport (LD)]

My Lords, I will be brief—not quite as brief as the noble and learned Lord, Lord Phillips of Worth Matravers, but I shall do my best, and I promise to keep away from the police and definitely the clergy. I had lunch with the right reverend Prelate the Bishop of Manchester, so I think I am safe for today.

While we agree that the current two-year qualifying period is too long, we are concerned about removing it entirely without a clear statutory probation period in place. This could leave businesses in a state of uncertainty, with a gap between the removal of the qualifying period and the introduction of the new probation framework. It risks inconsistency in employment tribunals, as claims will be judged under a system that lacks clarity until the probation period is formally established.

Amendment 49, in the name of the noble Lord, Lord Sharpe, would reduce the qualifying period to six months. Most other amendments in this group are consequential to ensure legislative consistency. We are gently supportive of this amendment, as it would reduce the timeframe for an employee with a plausible case to claim unfair dismissal, while allowing businesses time to correct genuine and non-pernicious hiring mistakes. If the noble Lord were to test the opinion of the House, we would support him on this occasion.

[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, this Government were elected on a manifesto to provide unfair dismissal protection from day one of employment—not two years, not six months, but day one. To deliver this commitment, we will remove the qualifying period for these rights.

The Government recognise that, from time to time, employers will need to fairly dismiss an employee for a fair reason. We expect that most employers already fairly dismiss employees, and the process need not be too arduous. Our changes will not prevent fair dismissal. An employee who has been working in the job for some time but whose performance has dipped will continue to have the standard protections against unfair dismissal. However, the Government believe that it is not right to expect employers to have to meet the same standards in the first few months of employment when they are assessing their newly hired recruit and deciding whether that person can deliver what the employer expects. This is why our policy creates a statutory probationary period, during which light-touch standards for dismissal relating to an employee’s performance and suitability will apply.

The noble Baroness, Lady Lawlor, asked what length the probationary period would be. As we have said previously, the Government’s preference is for nine months. We intend to consult on the duration and how the light-touch standards will operate. The current two-year qualifying period is designed not as a training period but a qualifying period before the individual can claim unfair dismissal. If the amendments tabled by the noble Lords, Lord Sharpe and Lord Vaux, were to be accepted, employees would still have the threat looming over them of being fired arbitrarily.

Amendment 51 preserves the policy in the Bill of exempting a dismissal due to a spent conviction for many qualifying periods—a point raised by the noble and learned Lord, Lord Phillips. I am pleased that the noble Lords agree with the Government’s policy, at least to that extent.

However, I can tell the noble Lord, Lord Vaux, that the Government do not believe in protection for some workers in some limited circumstances; instead, they believe in protection for all employees, benefiting 9 million people. The noble Lord spoke about the needs of young people looking for work. Of course we identify with that, and the Government are committed to supporting people as they take their first steps into the world of work or return to work. As the Prime Minister set out on the Get Britain Working White Paper in November 2024:

“Our country’s greatest asset is its people”.


As I explained in Committee, we are

“transforming the apprenticeship levy into a new growth and skills levy that will deliver greater flexibility”

for learners and employers

“aligned with the industrial strategy”.

This will include

“shorter duration and foundation apprenticeships in key sectors, helping more people to learn new high-quality skills at work, fuelling innovation in businesses across the country, and providing high-quality pathways for young people”.—[Official Report, 21/5/25; col. 305.]

We also intend to limit unpaid internships for those who are part of an education or training course. The law is clear that, if an individual is classed as a worker, they are entitled to at least the national minimum wage and anyone eligible must be paid accordingly.

Beyond enhancing learning on the job and ensuring that a fair wage is paid for young people’s work, we also believe that all employees should be provided with security of work through protections from being fired arbitrarily. It is no less distressing to lose a job at the start of your career than at any other point in the years that follow. However, the Government recognise that employers use probationary periods to assess new hires’ performance and suitability for their role. We will ensure that UK businesses can hire with confidence.

The noble Lord, Lord Sharpe, talked about social mobility. We recognise that good employers take a chance on what we might call “rough diamonds” up and down the country. The valuable time that employers take to support new hires by developing their skills and their talents on the job is not recognised often enough. The statutory probationary period will enable this, with light-touch standards for fair dismissals. We have said explicitly that our intention is to provide for a less onerous approach for businesses to follow to dismiss someone during their statutory probationary period for reasons to do with their performance and suitability for the role. Of course, that will apply equally to healthcare employees.

The noble Lord, Lord Sharpe, talked about potentially increasing the number of tribunals. Provided that the employer can show that the reason for dismissal was fair, they should have no concerns about the outcome, as nothing is really new from the current situation.

The noble Lord, Lord Hogan-Howe, asked about police officers. I understand that they are excluded from the existing legislation, as they would be from the Bill. In that sense, there is no change.

Noble Lords have raised the issue of a cultural fit, which, of course, can mean many different things. “Not a good fit” is often used euphemistically to refer to attributes such as an employee’s work ethic, their level of commitment to the job, or how they interact with their colleagues. In many situations, these reasons will fall into the category of dismissal for conduct or capability, to which the new light-touch standards will apply. If the cultural fit is linked to a protected characteristic then of course dismissing someone for that reason could lead to discrimination claims, and the Bill does not affect that.

Beyond these reasons for dismissal, which clearly fall within the conduct and capability category, the Government will carefully consult on what other kinds of “some other substantial reason” dismissals should also be subject to those light-touch standards. The Bill contains a power for the Government to define what a “some other substantial reason” dismissals “relating to the employee” should mean. As I have noted, the intent is to define what relates to an employee’s performance and suitability for their role. We will welcome employers’ and trade unions’ input on that important issue. However, these amendments would remove the Government’s statutory probationary period to enable light-touch standards for fair dismissals for the first nine months of employment.

Noble Lords asked about consultation. We have already consulted on the proposals, and we are continuing to engage with trade bodies and trade unions prior to publicly consulting later this year. The Secretary of State for Business and Trade issued a letter to stakeholders on Thursday 26 June, which outlined the fundamental principles that are guiding the Government’s development and implementation of day-one rights to unfair dismissal protections and invited stakeholders to engage on the detail of the policy. Should your Lordships be interested, I have now placed a copy of that letter in the House Library. I should also say to the noble Baroness, Lady Neville-Rolfe, that the road map shows that these day-one rights, including protection from unfair dismissal, will not be introduced before 2027.

In the meantime, these amendments would not deliver on the Government’s manifesto commitment to introduce a day-one right against unfair dismissal, leaving many newly hired employees without robust employment protections. I therefore ask noble Lords not to press their amendments.

Finally, my Amendment 52 is simply a minor technical amendment that corrects a cross-reference in Schedule 3. With that, I ask the noble Lord to withdraw Amendment 49.

[Baroness Lawlor (Con)]

Before the Minister sits down, is nine months now the Government’s official position on the initial period? If it is, can they confirm what they are minded to put into their light-touch unfair dismissal arrangements?

[Baroness Jones of Whitchurch (Lab)]

My Lords, as we have said before, we will continue to consult on this but that is our preferred option at this stage. We think that is a reasonable balance between the current arrangements and some of the proposals we have before us today.

[Lord Sharpe of Epsom (Con)]

My Lords, I am enormously grateful to the Minister for her response. It was remiss of me earlier not to thank the noble Lord, Lord Vaux of Harrowden, and my noble friend Lady Neville-Rolfe for signing various amendments. I am grateful to the noble Lord for his comprehensive and powerful speech, and for reminding us of the comments made by the noble Baroness, Lady Finlay of Llandaff, about GP surgeries.

As the noble Lord, Lord Goddard, pointed out, we have heard from the police, doctors, businesspeople, lawyers, vets and the clergy, and there was no argument in favour of the status quo but there were powerful arguments for common sense. I wonder whether the silence from the Government Benches indicates a degree of unease in what we are debating—a change that will fundamentally alter the balance of risk in hiring, at a time when unemployment has risen in every month that this Government have been in power.

This clause will do nothing to promote fairness in the workplace. It will erode flexibility, choke opportunity and harden the barriers that those on the margins already face. The Minister argued that employers have nothing to fear from tribunals, but the Government’s own impact assessment says that they expect the number of cases to rise by 15%, so I am afraid I do not follow the logic of her argument.

Also, the Government’s own impact assessment admits—I will repeat this, even though the noble Lord, Lord Vaux, did not—that introducing day-one rights to claim unfair dismissal would

“damage the employment prospects of people who are trying to re-enter the labour market, especially if they are observed to be riskier to hire”.

As the noble Lord said, the Government already know that, so why are they doing this?

The noble and learned Lord, Lord Phillips of Worth Matravers, asked a very to the point question, and the noble and right reverend Lord, Lord Sentamu, made an argument based on his experience. Both noble Lords were, in effect, making the point that this is also the compassionate thing to do.

This clause is not ready, safe or wise. We need to avert what my noble friend Lady Neville-Rolfe described as a “looming tragedy”. Therefore, I seek to test the opinion of the House.

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Moved by

[Baroness Jones of Whitchurch]

89: Clause 26, page 47, line 34, leave out “subsection (4)” and insert “subsections (4) and (4A)”
Member's explanatory statement
This amendment is consequential on the amendment of clause 26 at page 47, line 2 that inserts a new subsection (4A) into section 104I of the Employment Rights Act 1996.

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[Lord Sharpe of Epsom (Con)]

My Lords, I am grateful to my noble friend Lady Penn for bringing forward this amendment, which raises matters of genuine importance to families, working parents and, frankly, society as a whole.

The arguments that my noble friend has made for extending non-transferable paid leave for fathers and second parents is a serious and well-intentioned one. A more balanced system of leave can play a role in promoting gender equality, increasing participation in the labour market and supporting children in their earliest years. As my noble friend explained, it is therefore good for fathers, mothers and children.

I wholeheartedly agree that we should continue to review and refine our parental leave system so that it remains fit for the realities of modern working life. The commitment in proposed new subsection (1) to a comprehensive review is, in itself, a sensible and comprehensive step. I note that this was a manifesto commitment that should have been completed by now, yet the Government are only just starting it. Given the Government’s enthusiasm for consultation, that seems curious to say the least.

We must recognise and acknowledge the broader context in which we find ourselves. The Employment Rights Bill, as it stands, already promises to impose significant new obligations on businesses, at a time when many are still struggling with the increase to employer national insurance contributions, the Government’s constant U-turns, inflation and ongoing global economic uncertainty. Frankly, the Government have asked a great deal of British businesses in the last year—too much, in the view of many—and the effect of these measures has been entirely negative, undermining growth, reducing our competitiveness and rapidly stifling job creation, especially at the margins. If the Government were to think again and accept some of our perfectly reasonable amendments—on the right to request an unfair dismissal, for example—it would be easier to argue in favour of amendments such as this, which could be implemented after careful consultation with business.

While the intentions behind this amendment are commendable and there is certainly room for discussion about the long-term evolution of paternity and shared parental leave, without wider changes from the Government to their most damning plans, this is not the time, nor the Bill, in which to make these commitments. However, I hope the Government will continue to engage seriously with the questions and the comprehensive arguments advanced by my noble friend, and that we will revisit them in a context that allows for a comprehensive economic and perhaps demographic evaluation, along with genuine and meaningful consultation with businesses of all sizes and shapes, and indeed wider society as a whole.

[Baroness Jones of Whitchurch (Lab)]

My Lords, this has been an important debate on the issue of parental leave and pay. It has been wonderful to hear consensus on how important some of these fundamental issues are to individuals and to our society. I thank the right reverend Prelate the Bishop of Newcastle, the noble Baroness, Lady Penn, and my noble friend Lady Lister for their prior engagement on these important issues. The noble Baroness, Lady Penn, spoke eloquently and with conviction on these matters. I assure her that it is a conviction that I and the Government share.

We need to reform our confusing patchwork of parental leave and pay rights so that they are fit for a modern economy and deliver the wider societal benefits that noble Lords have raised in this debate. The Government are committed to making life better for families and we know that the current system needs improvement. This is why, through this Bill, we are making paternity leave and parental leave day-one rights, meaning that employees will be eligible to give notice of their intent to take leave from the first day of their employment. This brings these entitlements in line with maternity leave and adoption leave, simplifying the system. We are removing restriction preventing paternity leave and pay being taken after shared parental leave and pay to further support working parents in accessing these entitlements. Crucially, the changes in this Bill are not the limit of our ambitions.

Moving specifically to the amendments, Amendment 100 was tabled by the noble Baroness, Lady Penn. While I appreciate what the noble Baroness is attempting in her amendment, I regret that the Government cannot accept it. Let me reassure her that work is already under way to deliver on the spirit of her amendment. Since Committee, the Government have delivered on their manifesto commitment to launch their parental leave review. In doing so, they have listened carefully to concerns raised by noble Lords and stakeholders as to the details and scope of that review.

To answer the questions from a number of noble Lords, the published terms of reference make it clear that all current and upcoming parental leave and pay entitlements will be in scope of the review. The review gives us a chance to consider what we want the system to achieve, while giving due consideration to balancing costs and benefits to families, businesses and the Exchequer. As stated in the published terms of reference, we expect the review to run for 18 months. This will conclude with the Government producing a set of findings and a road map, including next steps for taking the reforms forward to implementation.

In response to my noble friend Lady Lister, we will want to engage and consult with stakeholders throughout that process to inform the conclusions of our work. In response to my noble friend Lord Jones, the call for evidence is already live; it began on 1 July.

I stress that the fact that the review is a manifesto commitment underlines the seriousness with which we are taking it and our obligation to act on its conclusions. However, we cannot predetermine the outcome of the review, nor can we justify the proposed cost increase without a thorough evidence-based assessment. This is why we cannot accept an amendment that would place a duty on the Secretary of State to lay regulations that would almost quadruple the rate and triple the length of paternity pay from current levels.

Amendment 102 seeks to make paternity pay a day-one right for all employees by removing the current continuity of working requirements. I reassure all noble Lords that we understand the importance of fathers and partners having time away from work to support their partner and to be with their developing family. As we have heard, the Secretary of State at the Department of Business and Trade recently met with Dad Shift and others at the launch of the review to hear first hand about their campaign. We are determined to do everything we can to encourage proper shared parenting for the improved well-being of both the parents and the children involved.

While we are removing the qualifying period for paternity leave to make it a day-one right, statutory pay remains conditional on an average earnings test and a requirement to work for the same employer for 26 continuous weeks. This is standard across all statutory parental pay work entitlements, including maternity pay. The only exception is maternity allowance, which is a benefit, not a work entitlement. Maternity allowance is designed to support health and recovery following childbirth for those who do not qualify for maternity pay.

Employment Rights Bill

Baroness Jones of Whitchurch Excerpts

Committee stage
Tuesday 24th June 2025 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My Lords, I thank the noble Lord, Lord Clement-Jones, for his amendment. As we consider this legislation, it is timely to reflect on how it would interact with one of the most significant shifts in our labour market in recent decades: the rise of the gig economy. This sector has delivered considerable benefits, including increased flexibility, new income opportunities and innovative business models. It has allowed many individuals to engage with work on terms that suit their circumstances, whether as a primary or supplementary source of income.

However, with any new form of work comes a degree of legal complexity. Our current employment framework was designed largely in a different era—one where work tended to take place in fixed locations, during fixed hours and under traditional contracts. The gig economy challenges many of those assumptions. For businesses, this complexity can lead to inconsistencies in regulation, administrative uncertainty and litigation risk; for individuals, it can mean uncertainty about rights and entitlements, and for policymakers, it raises the broader issues of whether and how the legal definitions of employment need to evolve to reflect modern working practices.

The Bill, while not focused exclusively on the gig economy, touches on matters such as workplace rights, regulation and the role of secondary legislation that will inevitably affect it. We should therefore consider whether the legislation provides sufficient clarity for businesses operating flexible models, whether it supports fair and predictable frameworks for all parties, and how future regulations will ensure that any changes to employment classifications or entitlements are based on clear, evidence-led analysis.

The question before us is not so much whether the gig economy is good or bad—it is part of the modern labour market, and it will obviously continue to grow and remain so. The more pressing question is whether the labour market is equipped to keep up with that evolution, and whether the Bill provides the right foundation for doing so. In that context, thoughtful and measured discussion about emerging work patterns such as dependent contracting, platform work, freelancing —which we discussed the other day—and other hybrid models are not only appropriate but very necessary. I look forward to further discussions with the noble Lord, Lord Clement-Jones, and others, on this subject.

Before I sit down, I thank the noble Lord, Lord Leong, for the great courtesy with which he has always conducted himself in his discussions and deliberations with our side. I enjoyed his valedictory remarks. I felt that he was perhaps slightly irked by the fact that we have had some relatively lengthy debates—perhaps because he did not agree with the premises of some of them. I would say very gently that that is the point of Committee; we are not supposed to agree, we are supposed to probe. As a former Home Office Minister, I have to say that these debates are not long; they are brief. These debates are like Usain Bolt; ours were like Mo Farah.

[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 thank the noble Lord, Lord Clement-Jones, for tabling Amendment 318. He raises an important issue. As we have been discussing, the changing nature of work and the gig economy are a real challenge for us, and we recognise the complexity and shortcomings of the UK’s current employment status framework.

I can reassure the noble Lord that the Government have committed to consulting on a simpler framework for employment status, and this remains our intention. We have been clear that, as a result of the complexity, some of the reforms in the plan to make work pay will take longer to undertake and implement. We want to get the potential changes to the framework right, and we will consult on the fundamental aspects of employment law before taking action. I think that in part echoes the comments of the noble Lord, Lord Sharpe, who recognised the complexity and the need to think it through before we get it right. We are determined to follow this through and take action.

I am sympathetic towards the noble Lord’s aims to extend the protection of employment law. The self-employed make a huge contribution to the UK economy. As the noble Lord, Lord Sharpe, said, while many enjoy being their own boss and the flexibility that self-employment brings, others can find themselves highly dependent on one particular client with little choice, which can bring them challenges and problems.

I appreciate that the noble Lord is seeking to address this with his amendment by introducing a new employment status of “dependent contractor” and extending employment protections to those individuals. However, the amendment would further complicate what is already a highly complex area—one where, as I am sure the noble Lord knows, there have been several high-profile Supreme Court judgments in recent years. We want to avoid introducing an additional employment status before we have had the opportunity to reflect and consult further.

In addition, I can assure the noble Lord that the Government are committed to supporting and championing the self-employed. We have already announced a package of measures to help the self-employed thrive in good-quality self-employment, including measures to tackle late payments to small businesses and the self-employed. I urge the noble Lord to listen to our reflections and our determination to look at the whole issues around the gig economy, and to give us a little bit of space to do that. For this reason, I ask him to withdraw Amendment 318.

[Lord Clement-Jones (LD)]

Can the Minister say what the status is of the consultations she mentioned? She offered very reassuring words and said there was a consultation on employment status. Is that under way? Would that mean the idea is to eventually have an Employment Rights (No.2) Bill, which we would all look forward to debating? What is the exact status of what the Minister is reassuring us on?

[Baroness Jones of Whitchurch (Lab)]

This has come up several times in the debates we have had on the different aspects of employment status. We have said that we need to do further work on the employment status elements of the plan to make work pay. I do not think it is intended to come back and put that in this legislation. The consultation has not started yet, but there will be a thorough consultation. We are going to carry out a detailed piece of work on this, and we will come back with further proposals on how we are going to address it in due course. I hope that answers the noble Lord, even if not completely.

Employment Rights Bill

Baroness Jones of Whitchurch Excerpts

Committee stage
Monday 16th June 2025 Lords Chamber

What makes this contradiction so egregious is that it fails the people the Government claim to care about: the members, the workers, the staff, the women in hostile offices, and the whistleblowers. How right my noble friend is to call these clauses into question. I look forward to hearing the Government’s response.

[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 thank all those who have contributed to this debate, and I thank the noble Baroness, Lady Coffey, for giving me the opportunity to speak to these clauses and, I hope, to reassure her. Let me point out why they are important provisions that must stand part of the Bill.

The theme these clauses all share is that they remove some of the unnecessary bureaucratic burdens placed on trade unions as a result of the Trade Union Act 2016. This includes removing powers placed on the certification officer which have never been used since their introduction. Your Lordships’ House will be aware that the Government’s manifesto committed to repealing the 2016 Act, and these clauses deliver on that. They will enable trade unions to focus more of their time and efforts on delivering in the interests of their members.

Clause 76 seeks to reverse the effect of Section 7 of the Trade Union Act 2016. It will remove the additional reporting requirements imposed on trade unions for their annual returns to the certification officer concerning details of industrial action taken during the reporting period. I can assure noble Lords that trade unions will still be required to submit an annual return to the certification officer, but the amount of information they will have to include will be reduced. In addition, unions will continue to be required to provide information in those annual returns relating to their governance and finances, including the management of their political funds, as they have done for many years.

Clause 78 will remove the power of the certification officer to enforce certain requirements relating to trade unions’ annual returns. However, the certification officer will still hold enforcement powers for the other remaining annual return requirements—that is, those not removed by Clauses 76 and 77, for example in relation to a union’s financial affairs and governance. Clause 79 will repeal the certification officer’s enhanced investigatory powers, which include an ability to compel trade unions to produce documents, the power for inspectors to launch investigations, and the related power of enforcement.

The reason why Clause 79 is introduced is that the enhanced powers created by the 2016 Act are simply not necessary. No evidence of regulatory failure existed at the time of the 2016 Act, and the statutory obligations that existed prior to that Act regarding trade union finances, governance and reporting requirements were found to be sufficient. In addition, the Certification Officer has never used the additional powers since their introduction. Removing the Certification Officer’s enhanced investigatory powers is part of the Government’s commitment to reset industrial relations and ensure that employers, unions and the Government work together in co-operation and through negotiation.

In the examples that the noble Baroness gave, the Certification Officer—as I think she admitted—acted with complete propriety and authority. I assure her that unions continue to be hugely respectful of the power and authority of the Certification Officer. I also assure her that the Certification Officer’s role is partly to ensure that the rights of workers are properly protected. I really do not recognise the noble Baroness’s analogy with Animal Farm. Our repeal does not affect the ability of a trade union member to complain to the Certification Officer about an election and have that investigated.

Similarly, Clause 80 will remove certain powers of the Certification Officer to investigate trade unions proactively without first having received a complaint from a member of that trade union. Trade unions are voluntary organisations run by and for their members. We are returning the Certification Officer’s role to one where the Certification Officer adjudicates where the Certificate Officer receives members’ complaints in relation to a union. I assure the noble Lord, Lord Hunt, that members will not be shy about complaining if they feel that an injustice has been done within the conduct of their union. However, the Certification Officer will retain the power to investigate a union’s financial affairs. The Certification Officer’s powers have been in place for many years and were brought in prior to the Trade Union Act 2016.

Clause 81 will reverse Section 19 of the Trade Union Act 2016 to remove the Certification Officer’s ability to impose financial penalties on trade unions. I can tell noble Lords that the Certification Officer has not imposed a single financial penalty to date. However, the Certification Officer will retain the power to issue enforcement orders following the changes made by Clause 81, and if those orders are not complied with the the union could be found in contempt of court.

Clause 82 will remove the Secretary of State’s power to make regulations that require the Certification Officer to impose a levy on employers’ associations and trade unions. It was resisted by employers’ associations and unions when it was introduced. The levy impedes on the rights of voluntary association and has attracted criticism from the International Labour Organization. The ILO was concerned that the levy could negatively impact on the rights of workers to organise and bargain collectively and reduce the financial capacity of trade unions to carry out such collective bargaining on behalf of their members. The Government believe that we should interfere as little as possible in the activities of social partners, which are, as I say, voluntary associations.

Clause 83 will reverse changes made by Section 21 of the Trade Union Act 2016 so that the right of appeal against decisions of the Certification Officer to the Employment Appeal Tribunal is only on a question of law, as opposed to being on questions of fact as well as law. That returns the appeal process to the position before the Trade Union Act 2016, where appeals against the Certification Officer’s decisions were on points of law only. It also aligns with many other enforcement bodies on employment law. For example, appeals against the decisions of employment tribunals are considered only on points of law, not points of fact.

I hope that that explanation has been helpful and therefore that Clauses 76, 78, 79, 80, 81, 82 and 83 stand part of the Bill.

Clause 76 agreed.

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[Lord Fuller (Con)]

My Lords, this nation must earn its place in the world, and, regrettably, we are losing to some of our industrial competitors, particularly in energy-intensive industries such as steel, aluminium and so on. We must live by our wits, and that means increasingly leaning on highly skilled, knowledge-based employment in an economy that values strong intellectual property rights, the rule of contract and property rights themselves. That requires an economy with flexibility and agility.

Earlier today, along with other noble Lords, I sat on the Home-based Working Committee. We are seeing firsthand how the world of work is changing, not just in the way that we go to work but in the way that we sometimes work from home. The entire technological underpinning of our economy is changing too. We have not yet seen the end of artificial intelligence and what it might do to low-skilled, somewhat transactional arrangements.

It does not help the economy, and by extension those who work in it, if all participating employers and unions do not recognise that we have a duty to move with the times. We cannot put a wall around our economy and create some high-cost walled garden as the rest of the world trades its way to prosperity, leaving us behind. I strongly support Amendment 256 and want to give more power to the officer who, more than anyone, can cajole and encourage workers’ representatives to recognise the world as it is, rather than the world as they might wish it to be.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I thank the noble Lord, Lord Sharpe, for tabling Amendment 256. We fully recognise the importance of supporting growth and international competitiveness across our economy, and we will of course continue to pursue policies that will deliver on our economic ambition. However, we do not consider this duty to be appropriate for the certification officer.

The certification officer is not a traditional regulator; they are an independent quasi-judicial officeholder. Their core functions are to oversee regulatory compliance fairly and impartially and to ensure trade unions and employers’ associations adhere to statutory requirements in relation to their finances and governance. This includes investigating complaints, maintaining accurate registers and ensuring that democratic processes are upheld. Imposing a duty to promote growth and competitiveness would cut across this role. It risks introducing competing priorities, blurring legal clarity and ultimately undermining confidence in the CO’s neutrality. We cannot require the certification officer both to conduct their judicial and regulatory functions and to deliver economic outcomes. The certification officer has no role in relation to the international competitiveness of the United Kingdom economy or its growth in the medium to long term.

As noble Lords will know, this Government have been active in requiring a number of regulators to apply a growth duty. Those bodies to which the growth duty currently applies are purely regulators—regulators that set strategies and make decisions that significantly affect the type, scale and location of economic activity in important sectors. The decisions regulators take can set the parameters for economic activity across the economy, and, of course, we recognise that; but the certification officer does not have this responsibility or power. We share the noble Lord’s commitment to economic growth, but it must be pursued in the right way. Furthermore, requiring the certification officer to follow a growth duty would not be practicable, and there is no evidence that imposing such a duty would have any meaningful impact on the UK’s growth or international competitiveness. It would be like asking a court to consider cases based on their impact on economic growth rather than on the evidence of the case.

For those reasons, I must ask the noble Lord, Lord Sharpe of Epsom, to withdraw Amendment 256.

[Lord Sharpe of Epsom (Con)]

My Lords, I thank the Minister for her answer, but I have to say that I am unpersuaded. The gist of it was that the certification officer does not have either the responsibility or the power, but by definition this amendment would deliver both those things. I completely agree with my noble friend Lady Noakes, and I shall take her suggestions on board and have a careful look at this. I do not believe that this amendment and the suggestions she made are mutually exclusive; in fact, if anything, they are very complementary. I thank my noble friend Lord Fuller for his comments, which, frankly, were just an expression of complete common sense.

I express my disappointment at the Government’s rejecting this amendment. I think it reveals more about the Government’s true priorities, frankly, than all the rhetoric about growth that we have heard. The Government are absolutely right to identify growth as a priority, but they will not find it in this Bill. In fact, there is nothing in the Bill that will bring any growth. I challenge the Minister to identify a single provision in these hundreds of pages that will increase productivity, enhance competitiveness or create jobs. The Government’s own impact assessment suggests the same: it is a document notably silent on growth benefits, while cataloguing increasing costs and regulatory burdens.

If the Minister is genuinely confident that the Bill will support growth, and if she truly believes that the expanded trade union protections and enhanced worker rights will somehow boost economic performance, I am surprised and somewhat mystified that she will not accept this amendment. The argument was that the certification officer is not a traditional regulator, but they still have a regulatory function, so I do not really see what difference that makes, frankly. What could be the objection to requiring the certification officer to consider growth when discharging functions under a Bill the Government claim supports growth? If these provisions truly advance economic competitiveness, a growth duty should be welcomed as a validation of the Government’s approach.

I could go on, but I do not see the point. The Government have rejected a genuine opportunity to demonstrate that their growth rhetoric has substance. The amendment would have required no fundamental changes to their approach, simply consideration of the economic impact when implementing trade union provisions. It would have aligned trade union regulation with best practice across government, while preserving all the work protections the Government claim to champion. The fact that they cannot even accept a modest requirement demonstrates that the commitment to growth is hollow rhetoric. It is designed to disguise an agenda focused more on trade union empowerment, regardless of economic consequences. How very disappointing for our great nation. I beg leave to withdraw the amendment.

--- Later in debate ---

For these reasons, I urge the Minister to accept the amendment tabled by my noble friend.

[Baroness Jones of Whitchurch (Lab)]

I thank the noble Baroness, Lady Coffey, for tabling Amendment 257A. I am happy to explain to the noble Baroness that this amendment is not appropriate.

As the noble Baroness knows, trade unions are already required by existing legislation to ballot their members before commencing any industrial action. Union executives are therefore required to obtain a mandate from their members to negotiate with their employer on their behalf before industrial action can commence. We believe that union executives, as representatives of their members, are best placed to judge whether an offer is acceptable and in the best interests of the union members before deciding whether to ballot their members. Balloting members is a considerable financial and administrative challenge and repeated ballots could cause an unnecessary burden—as well as confusing members as to what was being proposed and the likelihood of a higher offer.

Amendment 257A would also remove the power of union executives to negotiate on behalf of their members for a deal that they consider will deliver before balloting members on an offer. This is one of the main reasons that members join a union: they delegate to those negotiators to get the best deal for them. The negotiators will have done a great deal of detailed research on economic indicators, what is happening in their market, on the knowledge of the financial stability of the business, and so on. They will take a very wide range of factors into account into that bargaining process. This is why, quite often, negotiations take time, because all those factors have to be discussed in some detail in a way that an individual member would not be able to do.

Furthermore, the amendment has no safeguards to prevent gaming. Were we to accept it, there are risks that employers could submit multiple derisory offers to unions in order to interfere with the industrial action ballot mandate by forcing the union to constantly re-ballot members on derisory offers at the cost of the union. As the noble Baroness said, balloting on small increases would be ridiculous, but this is exactly what her amendment would require.

We consider, therefore, that existing legislation is effective. As union representatives are elected by their members to represent them, union executives should have the discretion as to whether they put an offer by an employer to their membership. If a union executive believes an offer is acceptable, they should be free to put that offer to their membership and make that judgment at the time.

We think the noble Baroness’s amendment is unnecessary; the current system works well, and it brings great benefits to individual members. I therefore ask the noble Baroness, Lady Coffey, to withdraw her amendment.

[Baroness Coffey (Con)]

I thank the Minister for her reply. She will be aware that I am a Back-Bencher and I do not have hundreds of civil servants crafting the perfect amendment and saying when to discuss these sorts of issues.

I am conscious that through the Bill, the mandate will be extended to 12 months. There is, therefore, the potential for handing over considerable power that is delegated to negotiators. I fear there will be situations that develop that can have economic consequences on workers when there are spats that not everybody wants to be involved in. I recognise all the other changes the Government are making in digitising the operations of the trade unions, and that is why I thought it was worth discussing at this point.

This has been a very useful debate. I thank my noble friends Lord Fuller and Lord Hunt for their support and consideration—and their experience, particularly that of my noble friend Lord Fuller. Having taken all this into account, I beg leave to withdraw the amendment.

Employment Rights Bill

Baroness Jones of Whitchurch Excerpts

Committee stage
Tuesday 10th June 2025 Lords Chamber

[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 thank the noble Lord, Lord Sharpe, for posing arguments against Clause 60 standing part of the Bill.

This clause seeks to repeal Section 15 of the Trade Union Act 2016 by amending the Trade Union and Labour Relations (Consolidation) Act 1992 to remove Section 116B. Section 15 required trade unions to pay public sector employers where they administer payroll deductions for trade union subscriptions, known as check-off. It further required that this service be made available only where workers have the option to pay their union subscriptions by other means.

The Trade Union (Deduction of Union Subscriptions from Wages in the Public Sector) Regulations 2024 were introduced as a cost-saving measure, with estimated annual savings of £1.6 million, totalling £12 million over the following 10 years. However, as the impact assessment acknowledged, the regulations would bring a cumulative cost of £17 million to public sector employers and trade unions over that period. This is far higher than the estimated cost savings.

The current system places bureaucratic processes on both trade unions and public sector employers that can be clearly simplified to support productive trade union relations. There should be no costs to employers associated with withdrawing the check-off regulations. Employers will have the choice to continue with or amend any agreed arrangements regarding the deduction of union subscriptions from their employees’ wages, in discussion with their recognised trade unions.

We feel that there is a need to simplify this process, which is what our proposals intend to do. While I thank the noble Lord for this very short debate, I urge him to support this clause, for the reasons I have set out.

[Lord Sharpe of Epsom (Con)]

I thank the Minister for her explanation, although I am not particularly persuaded.

--- Later in debate ---

[Lord Sharpe of Epsom (Con)]

My Lords, I join the general thanks to the noble Lord, Lord Hendy. I thought it was a most interesting introduction and I learned a great deal. I particularly liked the phrase “constitutional benediction”, which I am planning to nick—although not in this context, because I rise to join the Minister and express my clear and firm opposition to the proposed new clause after Clause 64. It seeks to enshrine in statute a so-called positive right to strike even in breach of contract, as opposed—if I follow the noble Lord’s arguments correctly—to the freedom to strike. It strikes me as somewhat semantic in terms of the practical outcome, which I suspect is an argument we will hear again.

Let us be absolutely frank about what the amendment would entail. It would insert into the Trade Union and Labour Relations (Consolidation) Act 1992 a wholly unprecedented and therefore dangerously broad provision that every worker shall have the right to take industrial action, whether or not it is in breach of any contract. It would not be subject to employer agreement or tethered to lawful procedures but would be an absolute statutory right to break contract terms and withdraw labour.

Industrial action, particularly strike action, is obviously a serious matter, and I think everybody would agree on that. It affects not only the employer but the public, the economy and, critically, the most vulnerable in society, who rely on public services. That is why we believe our existing legal framework strikes a careful balance. It protects the right to strike but does so within clear procedures and obligations: balloting requirements, notice periods and protections against unlawful disruption. This amendment would ride roughshod over all that.

What does it mean to have a right to breach your contract, regardless of process or proportionality? Surely, that is not a right; that is just carte blanche. This provision would displace the carefully constructed framework that governs how industrial action can be taken lawfully and responsibly. It would empower disruption without accountability. The purpose of employment law is not to tilt the playing field in one direction or another but to ensure that fairness, order and mutual obligations between employers and workers are respected. The right to withdraw labour must remain conditional on lawful procedures and not granted in the abstract, regardless of impact or legality.

Moreover, the proposed amendment would likely bring the UK into direct conflict with established contract law and create endless legal uncertainty. If workers are told that they have a statutory right to strike, even in breach of a contract, what does that mean for essential services, public safety, or the ability of schools, hospitals and transport systems to function with any consistency?

I do not think we should be mistaken. This amendment is not some minor clarification; it is a fundamental rewrite of the basis of workplace relations. It would undermine the principle that contracts entered into freely carry obligations and it would sweep away the balance between rights and responsibilities. I also have to ask: once a principle of contract breaking is established, how long before that is used as precedent in other contractual disputes?

Nobody denies that workers must be able to organise, speak up, bargain collectively and act where necessary. That is already protected in the legal framework. This amendment would take a sledgehammer to that balance. It would replace legal clarity, we believe, with legal radicalism, and accountability with absolutism. For those reasons, I urge the Government to reject the amendment.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I thank my noble friend Lord Hendy for tabling Amendment 238, which would establish a broad statutory right to strike. I thank him also for our constructive and amicable meeting a few days ago and for his impressive tour of international conventions this evening. I have to say to him that anything I subsequently say does not mean that I do not take our international obligations seriously. In fact, in this increasingly uncertain world, we have more of an obligation to work collaboratively across countries. I think there is a lot to be gained from countries if we do that, not only on these sorts of issues but obviously on other issues of social justice as well.

I thank the noble Baronesses, Lady Fox and Lady Jones, for adding to this short debate and the noble Lord, Lord Goddard. He raised some of the issues around prisons. I will be addressing those in the next group of amendments, but the point is well made that we certainly have to look after and defend our prison officers and recognise the service that they do for us.

The Government recognise the intention to reinforce protections for industrial action but it is important to emphasise that the right to strike is already protected under UK law, as set out in Sections 219 and 244 of the Trade Union and Labour Relations (Consolidation) Act 1992, provided clear conditions are met. Introducing a specific codified right to strike would cut across the uncodified nature of the UK constitution and lead to a far-reaching and undefined statutory right that risks legal uncertainty and conflict with long-established frameworks that carefully balance the rights of unions and employers.

--- Later in debate ---

[Lord Hunt of Wirral (Con)]

My Lords, I will quickly follow and agree with my noble friends Lady Coffey and Lord Jackson of Peterborough in their speaking against the amendments in this group. We feel that these amendments collectively represent a dangerous and retrograde step that would just take us back to the industrial chaos of the 1970s.

Such amendments would fundamentally undermine the carefully balanced framework of industrial relations that has served this country well for, now, over 30 years. I suppose the conventions of the House require me to address each amendment in turn, starting with Amendment 239. As the noble Lord, Lord Hendy, described, this would remove Section 223 of the 1992 Act, which currently renders unlawful any industrial action taken in response to dismissals for unofficial action.

When workers engage in unofficial action—that is, action not sanctioned by their trade union and without proper balloting procedures—they are essentially taking the law into their own hands, so employers must retain the right to dismiss workers who breach their contracts in this manner. To permit official industrial action in response to such lawful dismissals would create a vicious circle where lawlessness begets more lawlessness. It would effectively immunise unofficial action from any meaningful consequences, and encourage workers to bypass the proper, democratic procedures that unions themselves have surely fought hard to establish.

Amendment 240 is perhaps the most pernicious of all these proposals. It would restore secondary action, the ability of workers not just to strike against their employer over their conditions, but to support disputes elsewhere. We banned secondary action for compelling reasons. It allows disputes to spread like wildfire across the economy, dragging innocent third parties into conflicts that have nothing to do with their industrial relationships. A dispute between workers and one employer could paralyse entire supply chains, disrupting businesses that have committed no wrong and harming workers who have no stake in the original dispute.

The amendment would also remove the sensible restrictions on picketing, allowing pickets to target any workplace, rather than just their own. This opens the door to flying pickets and the mass intimidation tactics that we witnessed in the darkest days of industrial conflict. When pickets can descend on workplaces with which they have no employment relationship, the result is not legitimate industrial pressure but mob rule. Furthermore, by changing the definition of trade disputes from those “wholly or mainly” relating to employment matters to those merely “connected with” such matters, this amendment would politicise industrial action. Strikes could be called on the flimsiest of pretexts, with only the most tenuous connection to genuine workplace issues. This is a recipe for politically motivated disruption that serves no legitimate industrial relations purpose.

Amendment 241 would restore the right to strike for union recognition. We have established statutory procedures for union recognition that are fair, democratic and effective. These procedures protect workers’ rights to choose whether they wish to be represented by a union, without the coercion that inevitably accompanies strike action. When recognition can be achieved through industrial action, the process becomes tainted by intimidation, rather than informed by genuine worker preference. No worker should ever face the choice between supporting their family and supporting union recognition demands.

Amendment 242 would remove the requirement for unions to provide employers with notice of strike ballots. This seemingly technical change would also have profound practical consequences. Employers need advance notice to make contingency arrangements, to protect vulnerable service users and to engage in meaningful dialogue that might resolve disputes before they escalate. In essential services—our hospitals, schools and transport networks—such notice is crucial for public safety. To remove this requirement would be to abandon the vital principle that industrial action should and must be a last resort rather than a first response.

Amendment 243 would eliminate the requirement for separate workplace ballots, allowing unions to aggregate completely different workplaces and employment relationships into single ballots. This strikes at the heart of democratic participation. Workers in one workplace may face entirely different conditions and concerns from those in another. They should not be bound by the votes of workers with whom they share nothing but a common union membership. Workplace-specific ballots ensure that industrial action has genuine support from those who will participate in it, rather than being imposed by a union hierarchy pursuing its own agenda.

Taken together, these amendments would create a perfect storm of industrial instability. They would restore the legal framework that gave us the winter of discontent, when rubbish piled up in our streets, bodies went unburied and hospital patients were turned away by striking workers. They would empower union leaders to spread disputes across entire industries, to bypass democratic procedures and to hold essential services hostage to political demands. We must not forget the lessons of history. The industrial relations reforms of the 1980s and 1990s did not destroy trade unionism; they civilised it. They required unions to be accountable to their members and responsive to legitimate concerns while preventing the abuse of industrial power.

The noble Lord, Lord Hendy, and the noble Baronesses, Lady Jones of Moulsecoomb and Lady O’Grady of Upper Holloway, would have us believe that they simply want to restore workers’ rights. But rights without responsibilities are merely privileges, and privileges being exercised without regard for their impact on others quickly becomes tyranny. The right to strike is not an absolute right; it is a powerful tool that must be used judiciously and with proper safeguards.

Moreover, these amendments would do nothing to address the real challenges that face working people today. They would not raise a single wage, improve a single workplace or create a single job. Instead, as my noble friends pointed out, they would create uncertainty, discourage investment and ultimately harm the very workers that they purport to be helping. Businesses need stability and predictability to grow and prosper. Industrial relations law that encourages conflict and chaos will drive investment elsewhere, taking jobs and opportunities with it.

I urge this Committee to reject these amendments. They represent not progress but regression, not liberation but license, and not workers’ rights but workers’ wrongs. We must maintain the balanced approach that has served our economy and our society so well. Let us resist the siren call of those who would drag us back to an era of industrial warfare that all of us hoped that we would never see again. The choice before us is clear. We can preserve a system that protects workers’ legitimate rights while maintaining economic stability and social peace, or we can return to those bad old days of secondary picketing, political strikes and industrial anarchy. I think and I hope that I know which path this Committee would choose.

[Baroness Jones of Whitchurch (Lab)]

I thank my noble friend Lord Hendy for his amendments on the right to strike and for raising the issue of prisoner officers’ right to strike, which was strongly debated in the other place.

I am sorry that the noble Lord, Lord Hunt, has taken such a strident approach to the issues which my noble friends have raised. Although we do not necessarily agree with everything that my noble friend has put forward, I would say equally that we distance ourselves from the tone and attitude that has been presented by the other side this evening.

Employment Rights Bill

Baroness Jones of Whitchurch Excerpts

Committee stage
Tuesday 3rd June 2025 Lords Chamber

This amendment raises a legitimate question around how notice periods are used and whether current arrangements strike the right balance between the needs and mobility of the employee and the needs of the businesses that employ them. I look forward to the Minister’s response.

[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 thank noble Lords for this short debate and the noble Lord, Lord Lucas, for tabling Amendment 140.

When we were developing the plan to make work pay, we were clear in our ambition to establish a fair deal that balances employees’ rights and protections with employers’ confidence to hire the talent, skills and expertise they require to grow their business. A notice period is a period of time put in place to ensure a smooth transition, allowing the employer to manage minimum disruption to business requirements while the employee hands over their responsibilities. We therefore feel that, in the round, our proposals are beneficial to employers and fair. Many employers do not want their staff to leave too quickly, so that fairness is built in. Although the statutory minimum notice period that an employee must give an employer is currently, after one month’s employment, no less than one week, often a longer contractual notice period is agreed between the employer and their employees. I must say to the noble Lord, Lord Lucas, that I do not recognise three months as the standard; for many workers, it is considerably less.

This is all about fairness and balance. In practice, employers and employees recognise that both parties require stability and certainty to maintain a fair agreement. Of course, if an employment contract specifies a notice period longer than the statutory minimum, an employee is entitled to receive that longer period of notice, but the employer sets that out in the contract at the outset.

The current minimum notice periods legislation entitles an employee to their normal contractual pay rate during a notice period, as you would expect. This measure would require an enforcement mechanism of employees’ rights to increased notice pay, which would result in more disputes being taken to employment tribunals or the fair work agency. It would create a requirement for an employee’s current and future employer to confirm their salary offer, adding an additional step in the process of offboarding an employee. It also presents the possibility of increased financial burdens on employers.

So, the Government feel that it is not necessary to make a further assessment of this. They have not made an assessment of the costs and the impacts of making this change to employment rights. To do so would require careful consultation with employers and employee representatives. However, we have not received lobbying or any suggestion from employers that they particularly want the sort of proposal that the noble Lord has put forward.

The Bill is delivering the commitments made by the Government to improve workers’ rights in the plan to make work pay. I have listened to the noble Lord, and I absolutely agree with the noble Lords, Lord Goddard and Lord Hunt, that we want a simple process. Our process is simple. It is also fair to both sides: to the employer and to the employee. If those arrangements need to change, by and large, that can be done within the workplace, based on negotiations—so we do not feel the pressure to make the changes that the noble Lord, Lord Lucas, is proposing, but I thank him nevertheless for the suggestion.

[Lord Lucas (Con)]

My Lords, I am grateful to the Minister for her reply. I am sorry she does not feel sympathy for the direction I was taking. It seems to me that when you are addressing the question of productivity in the economy, there are no big solutions. It is rather like the way British cycling came to win: you make a very large number of very small improvements, all in the same direction.

This was intended to be one of those, to increase productivity but at the same time to make life a bit better for employees. I am inclined that way. I spent last weekend at a Premier Inn. Premier Inn does not provide toilet brushes. I do not see why the cleaners who come after me and other people should have to scrub out the toilet bowls when I could do that myself. Having a campaign with Premier Inn to change its policy on that would be worthwhile. It is a small change but, by making small changes enough times, you make some progress. Indeed, one of the secrets of this House is to make small changes. So I am sorry that this small change has not appealed to the Minister, but I will try again. I beg leave to withdraw the amendment.

Employment Rights Bill

Baroness Jones of Whitchurch Excerpts

Committee stage
Tuesday 3rd June 2025 Lords Chamber

[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 thank my noble friend Lady Warwick for her thoughtful contribution to this debate on Amendment 143B. We fully recognise the need not to impose disproportionate burdens on smaller procuring organisations such as universities. However, it is important that we consider fairness and equality of treatment for all workers providing key outsourced services to higher education providers—for example, cleaning and catering services—so that they receive fair and equitable employment conditions comparable to both those transferred from the public sector and those working for local authorities or departments that provide the same services. As a result, there would need to be compelling arguments to exempt higher education providers.

Secondly, it is essential that we first consult with key stakeholders and seek their views before deciding on the ultimate content of the reinstated code and the extent to which certain public authorities, including higher education providers, are required to follow its provisions. I can assure my noble friend Lady Warwick that we will carefully consider the particular issues relating to higher education providers and the difficulties they might experience during this process. However, our view is that to carve out higher education providers completely on the face of this Bill at this stage would not be right.

My noble friend highlighted the particular financial challenges currently being experienced by universities. We are committed to creating a secure future for our world-leading universities so that they can deliver for students, taxpayers, workers and the economy. The Office for Students will continue dedicating significant resources to ensuring the sector’s financial sustainability. The DfE has appointed Professor Edward Peck as the substantive chair of the OfS, where he will play a key role in strengthening this commitment while also expanding opportunities in higher education. We have also made the tough decision to increase tuition fee limits in line with inflation. As a result, the maximum fee for a standard full-time undergraduate course in the 2025-26 academic year will increase by 3.1% from £9,250 to £9,535.

Finally, I stress that the code is being designed to be flexible so that it does not impose undue burdens. There are a range of options available here that could be pursued, for example by specifying to which bodies the code should apply or applying the code only to higher-value contracts, which could exempt low-value procurement activities such as those often carried out by educational establishments that may have fewer procurement resources. These are the sorts of issues that the consultation will examine in detail.

I am very conscious that my noble friends Lady Warwick and Lord Watson asked very specific questions. Given the lateness of the hour and the very specific nature of them, I think it would be helpful if we could write and put that on the record to provide, I hope, the reassurance that the higher education sector seeks. It is for that reason that I ask my noble friend to withdraw her amendment.

[Baroness Warwick of Undercliffe (Lab)]

My Lords, I thank my noble friend for her reply and her attempt to reassure me and other Members of the Committee. I am grateful to my noble friend Lord Watson of Invergowrie for his staunch support for what I am trying to do here. I also thank the noble Lord, Lord Sharpe of Epsom, for his support; it was thoughtfully put, and I appreciate it.

I understand that the Minister is seeking to reassure me that she is very aware of the need to support the future of our universities. I do not think she really addressed, though, the issues around the impact on the different nations and the way in which that could affect the competitive advantage of the universities and the way in which they are seeking to increase efficiencies. I hope that, in writing to me, she will also undertake to meet the higher education sector once it has digested the detail of her response—I appreciate that my questions are technical. I hope she will undertake to do that because I think that would be enormously helpful and the most reassuring thing that she could do. Having said that, I beg leave to withdraw my amendment.

Employment Rights Bill

Baroness Jones of Whitchurch Excerpts

Committee stage
Thursday 8th May 2025 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My Lords, I begin by thanking the noble Lord, Lord Leong, for his letter explaining certain matters that were left over from the last day of Committee. The fact that the algebraic question required a three-page, detailed answer for one worked-up example rather illustrates our point that this adds a huge and possibly unnecessary level of complexity for small businesses in particular. But I will let that lie for now.

Amendments 18 and 19 standing in my name would remove the broad delegated power in new Section 27BD. This Bill continues the concerning trend of the steady transfer of legislative authority from Parliament to Ministers. As I noted at Second Reading, it contains no fewer than 173 delegated powers. The Government may, and probably will, argue that this is justified by ongoing consultation, but that is in effect an admission that this Bill is not yet complete or ready for full and proper scrutiny by this House.

Time and again, we have seen ill-defined powers handed to the Executive allowing for significant policy changes to be made by regulation without meaningful parliamentary oversight. Clause 1 exemplifies this problem. It inserts new sections into the Employment Rights Act 1996, establishing a framework for a new statutory right relating to guaranteed hours. However, through new Section 27BD(6), it grants the Secretary of State a remarkably wide power to make regulations specifying circumstances in which the duty to offer guaranteed hours does not apply or where an offer may be treated as withdrawn. There are no limitations, no criteria and no guiding principles. There is no requirement for a consultation or justification. In effect, the Secretary of State is given a blank cheque.

The Delegated Powers and Regulatory Reform Committee has been very clear that the power is “inappropriately broad” and should be

“restated with a greater degree of precision”.

While the Government’s memorandum refers to

“maintaining the original policy intent while allowing reasonable exemptions”,

the committee rightly points out that nothing in the Bill legally constrains the Secretary of State’s discretion in that regard. Moreover, as we raised on the first day of Committee, businesses need clarity on the operation of guaranteed hours. If there are to be sector-specific exemptions—and there may very well be a case for them—they should appear in the Bill, not be left to future ministerial discretion. Uncertainty benefits no one—not workers, not employers and not enforcement bodies. Allowing such fundamental aspects of the regime to be decided later by regulation undermines the transparency and stability of the framework that the Government are seeking to establish.

I remind the Minister that, during the passage of the Data Protection and Digital Information Bill, she rightly accepted similar concerns and tabled amendments which directly reflected the recommendations of the Delegated Powers and Regulatory Reform Committee. At the time, she said:

“I hope the Minister is able to commit to taking on board the recommendations of the Delegated Powers Committee in this respect”.—[Official Report, 27/3/24; col. GC 198.]


Why should that principle not apply here? If it is truly the Government’s intention that this power will be used only in limited and specific cases, then the legislation should make that clear. As it stands, any future Secretary of State could by regulation significantly weaken or disapply this statutory regime without the involvement of Parliament.

Regardless of one’s views on the underlying policy, that is not an acceptable way to legislate. When Parliament creates new rights in statute, they should not be left vulnerable to being hollowed out at the stroke of a ministerial pen. This amendment removes that overly broad delegated power and ensures that any substantive changes to the scope of the duty must be brought back to Parliament through primary legislation. Will the Minister now commit, as she has done before, to taking seriously the recommendations of the Delegated Powers and Regulatory Reform Committee and amending the Bill accordingly?

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

My Lords, it is very good to return to the subject of zero-hours contracts as we start day 2 of Committee. As we debated last week, the Government are committed to ending one-sided flexibility and exploitative zero-hours contracts, ensuring that all jobs provide a baseline of security and predictability so that workers can better plan their lives and their finances.

Employers who already provide this security and predictability for their workers will benefit from a level playing field, but these measures will help drive up standards and eliminate undercutting across the board. Meanwhile, employees who enjoy the flexibility of their current zero-hours arrangements will not be pressurised into accepting a guaranteed-hour contract.

I thank the noble Lord, Lord Sharpe of Epsom, for tabling Amendments 18 and 19, which would remove the power to make regulations specifying circumstances in which the duty to offer guaranteed hours does not apply, or an offer may be treated as withdrawn. This power would allow the Secretary of State to react dynamically to changing employment practices that may arise, allowing for updates to maintain the original policy intent of providing a baseline of security and predictability so workers can better plan their lives. It could provide the required economic flexibility that businesses have been asking for, to ensure that the policy is working as intended while adapting to changing circumstances.

This power is separate to the power in the Bill to exclude categories of workers. Regulations made under the excluded workers power would allow specified workers to be taken out of scope of the right to guaranteed hours. Since the right to guaranteed hours is a new, novel right, it could be necessary to exclude certain workers in order to respond to the changing employment environment.

The power at issue here relates to specified circumstances where the right to guaranteed hours would otherwise apply but limited and specified circumstances justified an exception to the duty to make a guaranteed-hour offer. We envisage that any exceptions to the duty to offer guaranteed hours will be narrow and be applied in specified circumstances; for instance, where the measures would otherwise have significant adverse impacts, even when the employers and the workers act with good intentions and there is no other accepted way to mitigate the risk. Examples could include unforeseen circumstances such as a pandemic or a state of emergency.

Consultation is required to further determine which specific circumstances may justify a potential exemption. I assure the Committee that we will give full consideration to any representations made in this House and by respondents to that consultation. Gathering the views from those who will be impacted by the policy via consultation remains of the utmost importance to this Government. By removing the power, we would become unable to make such exceptions and to provide flexibility in those specific circumstances. The power will also be subject to the affirmative procedure, meaning that both Houses will have the opportunity to debate this matter.

Like the noble Lord, Lord Sharpe, I am, as ever, grateful to the Delegated Powers and Regulatory Reform Committee for its careful consideration of the Bill, including in relation to the power with which we are here concerned. The committee continues to serve your Lordships’ House well by providing a thoughtful analysis of the Government’s legislative programme, and I thank it for that.

As acknowledged by that committee, the need to respond to changing circumstances is an appropriate basis for such a power, but in the committee’s view, that power should be narrowed—whereas the amendment goes much further than what has been proposed by it. On that basis, I hope I have been able to set out more information on how the Government intend to use this power, and I of course look forward to responding more fully to the Delegated Powers Committee report in due course. I hope that reassures the noble Lord so that he feels able not to press his Amendments 18 and 19.

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[Lord Fox (LD)]

My Lords, I was a little disappointed that the noble Lord, Lord Moynihan, did not welcome me back as well, but I am coming to terms with that disappointment. To briefly refer back to the first group, the noble Lord, Lord Sharpe, made some comments about the letter from the noble Lord, Lord Leong, and had I not had to leave before we got to that group, I fear I was going to subject the Minister to a somewhat satirical analysis of that particular amendment—but, frankly, the letter did a much better job than anything I could have done.

I ask the Minister and the noble Lord, Lord Leong, to take that letter and that response and discuss it with 10 people responsible for HR in businesses of different sizes to ask them what they think of it, then perhaps they could tell us what the result of those discussions were. I absolutely concur with the noble Lord, Lord Sharpe: it is beyond parody that that algorithm should lead to that sort of calculation that any company is expected to make. There has to be a simpler way of getting the same result; that is what we should be thinking about.

I was somewhat intrigued by the degrouping strategy. We have amendments on guaranteed hours in the previous group, this group and the next, which is why I reserved the small comments I have to just this group. I have tried to pick through the bones of what we heard. There are some bones, and I should like the Government to comment on them.

I point to the use of language by the noble Lord, Lord Hendy. On one side they are talking about flexibility and on his side they are talking about evasion and escape. Thereby hangs the problem of the debate that we might be having overall in your Lordships’ Committee. When we are talking about escape and flexibility, we are not using the same language. We have to try to find a way to bridge that divide in culture that we are dealing with. If we were doing conflict resolution, that would be the starting point.

Where I do agree completely with the noble Lord, Lord Hendy, is that we should not be looking to create a two-tier situation. We have to create a system that works for employers across the board. However, the noble Lord’s point was that it would extract a huge number of people from the benefits of the Bill were we to exclude. We have to work hard to ensure that the micro-businesses are not disadvantaged by what we are seeking to do, rather than exempt them from it. That is our view from these Benches.

Back to those bones: I look to the Minister to recognise that there are businesses that have lumpy—perhaps I should say fluctuating—demand. Some of these businesses fluctuate predictably—they are cyclic. Christmas comes at the same time every year, so we always have roughly the same amount of bulge. However, as the noble Baroness, Lady Coffey, pointed out, for others that lumpiness can come with the weather. I want the Minister to recognise that these businesses exist and then for us to explain that a number of issues have already come up around how to manage a workforce fairly while being economically sensible to the business within this lumpiness and fluctuation. We had groups on the first day in Committee, we have these groups, and we will have more.

I would like to sit down with the Minister to understand how the Government envision the Bill allowing businesses that know that they will have lumpy, fluctuating demand to manage a workforce. What will be the fair approach, in the Government’s view, and the economic approach, in businesses’ view, to ensure that there is a win-win? This should not be seen as an evasion or a flexibility but as an opportunity to bring things together and make them better for business and employees, because the two are completely linked in this. We have to cross that divide and sit down with the Government, to work out how flexibility comes into this and how a business will manage this process properly, while delivering the fairness that the noble Lord, Lord Hendy, put forward.

Can those of us who are interested sit down with the Minister in a seminar where she explains how, if the Bill goes through as it is, businesses with lumpy and fluctuating demand, whether seasonable or variable, can manage that going forward?

[Baroness Jones of Whitchurch (Lab)]

My Lords, I thank the noble Lord, Lord Sharpe, for tabling Amendments 19A, 20 and 21 to Clause 1 on the right to guaranteed hours. I say to the noble Lords, Lord Sharpe and Lord Fox, that the detailed analysis of the algorithms by the noble Lord, Lord Leong, was presented only on the basis of a request for a detailed analysis of where those arguments came from. There was a much simpler version, which my noble friend gave in his verbal response, so there is more than one version of that challenge.

Amendment 20 seeks to allow employers to propose changes to permanent contracts issued after a guaranteed-hours offer within six months of acceptance, as long as there is a genuine material need in business operations. I am pleased to reassure noble Lords that this amendment is not required. As my noble friend Lord Hendy said, the zero-hours provisions in the Bill do not prevent employers offering their workers variations to their contracts following the acceptance of a guaranteed-hours offer as long as the variation does not amount to subjecting the worker to a detriment. I say to the noble Lords, Lord Moynihan and Lord Londesborough, the noble Baroness Noakes, and other noble Lords, that the Bill does have the flexibility that should reassure businesses that the zero-hours provisions can be changed. As we debated previously, when talking about zero-hours contracts in the context of, for example, individuals such as students or those with caring responsibilities, those who are offered zero-hours contracts will be able to turn the offer down and remain on their current contract.

Going back to Amendment 20, employers will still be able to propose and make changes to their workers’ contracts after they have accepted a guaranteed-hours offer, including in the sectors such as hospitality, to which the noble Lord, Lord Hunt, refers. This can be done following the usual process of negotiation and agreement between employers and workers. It would be subject to the terms of the workers’ contracts as well as existing and new legislation, such as the provisions on fire and rehire. Adding a provision stating that employers can propose variations—something that they will already be able to do—while considering only a limited number of matters may risk creating legal confusion. It may, for example, inappropriately suggest that variations can be proposed only in these circumstances or suggest that other provisions of legislation that do not include similar wording restrict employers’ ability to propose variations of contracts when this is not the case.

Amendment 21 seeks to make provisions that employers may still make redundancies where these are based on genuine business needs and not linked principally to a worker’s right to guaranteed hours. I am again pleased to reassure noble Lords that the amendment is not necessary. The zero-hours provisions in the Bill do not prohibit dismissals by means of redundancy following the acceptance of a guaranteed-hours offer. There are some restrictions on selecting an employee for dismissal by redundancy because they have accepted a guaranteed-hours offer, but this is not what the amendment seeks to address.

The Bill otherwise creates protection only against detriments and makes dismissals automatically unfair in very limited scenarios—including, for instance, where the principal reason for the dismissal is an employee accepting or rejecting a guaranteed-hours offer. If an employer wished to make an employee redundant, they would be required to follow the required processes in line with the terms of the employee’s contract and with employment law relating to individual or collective redundancies, to ensure that the dismissal is fair. This amendment would not substantially change the effect of the provisions, as the zero-hours measures in the Bill do not prohibit dismissal by reason of redundancy following the acceptance of a guaranteed-hours offer. But it could create unhelpful doubt as to how the legislation on redundancy already operates.

Amendment 19A seeks to list in the Bill a number of factors and circumstances that would need to be considered when determining whether it was reasonable for an employer to give a worker a limited-term contract. I emphasise that the right to guaranteed hours will not prevent employers using limited-term contracts. Under the guaranteed-hours provisions, it is reasonable for an employer to enter into a limited-term contract with a worker if the worker is needed only to perform a specific task and the contract would terminate after that task has been performed—for example, waiting at tables at a wedding—or the worker is needed only until an event occurs or fails to occur, after which the contract would terminate. This could include a worker covering another worker who is on sick leave or a worker needed only for some other kind of temporary need that would be specified in regulations, the contract expiring in line with the end of that temporary need.

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[Lord Fox (LD)]

I thank the Minister for her partial response, but will she reveal the draft of those regulations while we still have an opportunity to debate them? Secondly, I think she was going to talk about consultation and so I ask what question that consultation will be asking.

[Baroness Jones of Whitchurch (Lab)]

I will write to noble Lords about when the regulations will be available. This may well be part of the implementation plan, which is still awaited. Noble Lords can genuinely take it from me that they will receive it as soon as it is available.

We will consult on the contents of the draft regulations and engage with a range of stakeholders, including trade unions and businesses. The noble Lord, Lord Fox, asked whether we could have further discussions about this. Of course I am happy to talk to noble Lords in more detail about how this might apply, because I want noble Lords to be reassured that the flexibility they seek is already in the Bill in its different formulations of wording. But I am happy to have further discussions about this.

I hope that that provides some reassurance to noble Lords. I therefore ask the noble Lord, Lord Hunt, to withdraw his amendment.

[Lord Lucas (Con)]

I join the noble Lord, Lord Fox, in saying that I would really appreciate the opportunity to look at how this Bill deals with lumpy demand— not only predictably lumpy but randomly lumpy. I ask the Clerk at the Table to transmit to the Clerk of the Parliaments a request to tell us how the Bill will affect the House’s employment practices, because we are a great generator of lumpy demand, not least on the Public Bill Office. I would really like that immediate understanding of how the Bill affects a substantial organisation, but one with a very unpredictable set of demands such as the Houses of Parliament.

This lumpiness is a characteristic of, say, the NHS, which may suddenly get a demand and have to do things. Suddenly something emerges and the pattern of working has to change. Will the Bill fix those longer hours so that they become set and cannot be rowed back from when the lump disappears? A good understanding, before we reach Report, of how the Bill will work in practice and interact with a range of real businesses would be really valuable, and I hope the Minister can offer it to us.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I thought I had already offered to have further discussions, but I take the noble Lord’s point.

[Lord Hunt of Wirral (Con)]

My Lords, I think my noble friend Lord Lucas and the noble Lord, Lord Fox, were looking for the draft regulations. I do not think I need to remind the Committee of my declaration of interests; at Second Reading, I reminded the House that I am still a practising solicitor. It is no accident that, last week, City AM—a newspaper circulated widely through the City—said that the Bill is the biggest boost for the legal profession that anyone had ever seen. Many more lawyers will be needed to wade through the complexities of the Bill.

In particular, as my noble friend just pointed out, we are constantly debating the Government’s power to introduce regulations, but Parliament is not allowed to see those regulations when it passes the primary legislation that gives Ministers the power, after consultation, to do whatever they wish whenever they wish to do it. We are going to have this time and again in this series of debates. Surely it is right that, if the Government are taking the power to introduce detail—in particular by amending primary legislation—we should see that detail, if only in draft, before we decide to give that power to Ministers.

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There is precedent in legislation to restrict full-time students to accessing particular rights, and that is in universal credit. Full-time students are not allowed to have universal credit, apart from one very narrow exemption. This is a good example of where we are considering the legislation in detail and recognising that we are talking here about the approach that the Government are taking to families and households. I think this is a good exemption that would still allow the flexibility wanted.

[Baroness Jones of Whitchurch (Lab)]

My Lords, this has been a useful debate on the subject of those who may be made exempt from the scope of the right to guaranteed hours. First off, I say to the noble Lord, Lord Hunt, that it is quite right that the Government have a detailed plan to get young people into work and training. Of course, we want to provide new opportunities for all young people, and we are determined to do that.

Amendment 19B in the name of the noble Lord, Lord Sharpe, seeks to take workers who are full-time students out of the scope of the right to guaranteed hours. I say to the noble Lord, Lord Hunt, that the Government appreciate that zero-hours contracts or those sorts of arrangements can work well for many full-time students, who desire the flexibility that they provide. We have heard that from around the Chamber this afternoon. The noble Lord, Lord Hunt, talked about term-time or seasonal work, but I urge him to look back through the previous debates we have had and the comments I have made, because there are a variety of ways in which employers can offer that flexibility of contract and the limited-terms contracts that could address those term-time only or seasonal work issues. I am not persuaded of his argument in that regard.

I say to the noble Lord, Lord Jackson, and the noble Baronesses, Lady Lawlor and Lady Coffey, that there are workers who nevertheless are full-time students, and they can still experience that one-sided flexibility, similarly to the workers who are studying part-time. It seems disproportionate to exclude workers from the scope of that right simply on the basis that they are enrolled in full-time studies. Full-time students may value guaranteed hours to help them manage their job around their studies or arrange their childcare in the same way as those in full-time work.

I think there is an assumption in this debate that we are talking only about a particular age group of people and that it is a group of young people who are earning some extra beer money. This is far from the case. Many full-time students are mature students with family or other caring responsibilities, or even simply with rental or mortgage commitments. For those people, guaranteed hours can be a financial lifeline. According to a 2024 TUC poll, the majority—80% of students on zero-hours contracts—also reported that they had experienced difficulties managing study and education alongside their work. They certainly, in this generation, try to manage both of those a lot more than they did in my generation, and it is now much more expected that young people will work alongside their study. Many of those students want the opportunity to have regular hours to avoid the burden of incurring long-term student debt, which they would otherwise take into their ongoing working life. As we have said, it is entirely up to the student to say what is right for them, but there are very good reasons why the guaranteed hours should apply to all people and we should not make an exemption for students.

However, as we noted, flexibility for workers is important and the Government are not seeking to change that, where workers value that flexibility and have some benefit from a zero-hours contract. As I say, that is why workers who are full-time students and want to retain their zero-hours contracts or arrangements will be able to do so by rejecting the guaranteed-hours offer. They can accept it or reject it.

However, it is the Government’s view that they should be able to choose, based on their individual circumstances, whether to accept a guaranteed-hours offer, rather than being denied that right, as the noble Lord’s amendment seeks, purely on the basis of the fact that they are studying. I hope the noble Lord will look again at his amendment. I feel as if it is penalising young people and students in a way that feels quite unreasonable in the circumstances where everybody else is entitled to this right. Therefore, I hope he will be prepared to withdraw the amendment.

[Lord Hunt of Wirral (Con)]

My Lords, this has been a valuable debate; I agree with the Minister. Indeed, I welcomed her admission that zero-hours contracts work very well for students and are valued by them. I was interested in the TUC survey. All the surveys I have seen so far tell this Committee that full-time students do not want to lose zero-hours contracts.

It may be that the Minister will say, “Why is this amendment necessary, because they will not request full-time employment?” However, under the Bill, the employer has to work out how the business will be able to offer someone on a zero-hours contract full-time employment as and when they request it. It comes later, of course, when we are moving amendments, that we can say that it should not be the duty of the employer to give the opportunity of full-time employment; it should be the right to request full-time employment. What I think we are arguing about is whether all employers will have to go through the process in advance of any request being received. Under this legislation, they have to work out how they will be able to respond positively to an offer.

My noble friend Lady Lawlor shared the real-life experience and the way in which various students have taken advantage of these contracts. But what if they are not going to be offered them and given the opportunity of working as and when, in the flexible, lumpy way they want to organise their studies, as my noble friend Lord Jackson of Peterborough, pointed out? I thank him for going down memory lane; it was a fascinating glimpse of life as a stacker. I suppose all of us will remember what we did as students. I volunteered. I crossed Whiteladies Road in Bristol and offered my services to the BBC. The BBC took me on as a freelance newsreader.

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Moved by

[Baroness Jones of Whitchurch]

34: Schedule 1, page 171, line 37, leave out from “given” to end of line 2 on page 172 and insert “—
(i) less than a specified amount of time before the earlier of when the shift would have started (if the shift had not been moved, or moved and curtailed) and when the shift is due to start (having been moved, or moved and curtailed); (ii) on or after the start of the shift;”Member’s explanatory statement
This amendment is consequential on my amendment to Schedule 1 that expands the meaning of the movement of a shift.

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Moved by

[Baroness Jones of Whitchurch]

39: Schedule 1, page 174, line 17, after “(4)” insert “(b)”
Member’s explanatory statement
This amendment corrects a cross-reference, bringing paragraph 23(5) of proposed Schedule A1 to the Employment Rights Act 1996 into line with the equivalent provision (section 27BR(3)) inserted by clause 3.

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[Lord Hendy (Lab)]

I endorse what my noble friend Lord Davies said a moment ago. A trade union is defined by Section 1 of the Trade Union and Labour Relations (Consolidation) Act, and it is an organisation of workers the primary purpose of which is to regulate relations between employers and workers. That is the only definition. Any body that does that is a trade union. So the sorts of organisations identified in these amendments will be trade unions. But, as trade unions, they have consequential obligations. For example, they have to elect their general secretary and their national executive committee by ballot every five years, and so on. So there are consequences to these amendments. By the way, a trade union defined by Section 1 is not necessarily independent. There are independent trade unions listed by the certification officer and non-independent trade unions. “Independence” has a specific meaning under the legislation.

[Baroness Jones of Whitchurch (Lab)]

Phew—I do not know whether I want to join in this philosophical debate because, clearly, we have heard strong views on both sides, and they have strayed way beyond the amendments we are trying to moderate today. But I would say that the Bill overall seeks to find the right balance between workers, unions and businesses, recognising that each has an important role to play. Our aim in the Bill is to modernise those arrangements for the 21st century so that we are not playing “Yah-boo, you did that back in 1953” but are actually looking to the future. We hope that is what the Bill will deliver.

These amendments aim to broaden the provisions in the Bill to allow employee representative bodies or staff associations to collectively agree to modify or opt out of the zero-hours measures. The Bill already allows these collective agreements to be made, but only by trade unions. As we are allowing for modification of statutory employment rights, it is vital that the appropriate safeguards are in place. This includes that only trade unions that have a certificate of independence, and are therefore free from employer control, can agree with employers to modify or opt out of rights, and that rights are guaranteed in exchange and incorporated into a worker’s contract.

I make it clear that staff associations and employee representative bodies, some of which we have heard described this afternoon, can do really good work, and we welcome engagement between employers and workers in all forms. However, we do not think it is appropriate for these associations and bodies to be able to modify statutory employment rights. This is not least because they may not have sufficient independence from the employers—a point well made by my noble friend Lady O’Grady—unlike independent trade unions, which do have that independence and which offer high levels of protection to workers. Furthermore, there is a well-established framework for trade unions, including recognition, independence and incorporation of terms, and the provisions build off these provisions.

I can see that the noble Lord’s amendments suggest a framework of requirements that staff associations and employee representative bodies would need to meet in order to modify or exclude zero-hours rights. These include requirements around independence, recognition, elections and record-keeping.

However, as my noble friends Lord Hendy and Lord Davies have said, the more you incorporate those requirements, the more you add to a staff association or employee representative body, the more similar it appears to be to an independent trade union. Given that the trade union framework is well established, historically and legally, it is not clear to me that it makes sense to establish a similar but different structure just for the purposes of the zero-hours measures. I am grateful to my noble friends Lord Davies, Lady O’Grady and others for reminding us of the hard-won rights that we have achieved through organisations within the trade union movement. Trade unions already serve to protect and advance the interests of workers.

I felt that the noble Lord, Lord Moynihan, presented a caricature of the unions. For every criticism he has, we could come back with all the advantages that trade unions have delivered for working people over the years in pay and conditions and in some of the fantastic campaigns—for example, around the environment, women’s rights, and so on. They have already contributed enormously to modernising workplace rights, so I do not feel that it would be appropriate or proportionate to try to recreate them. The trade unions already provide the constructive dialogue with employers to which the noble Lord, Lord Sharpe, refers, and membership of trade unions remains voluntary for employees.

I say, too, to the noble Lord, Lord Sharpe, that there is a technical issue around all this. If his amendment was accepted as drafted, it would not achieve the aims that he intends. Collective agreements have a specific definition in the Employment Rights Act 1996, which the zero-hours provisions are being inserted into. The definition, referring to the definition in the Trade Union and Labour Relations (Consolidation) Act 1992, provides that collective agreements are ones between independent and certified trade unions and employers’ or employees’ associations, so there would not be scope in the way that the noble Lord has worded his amendment for a wider definition of employee representatives.

We have had a debate which I have a feeling we are going to return to on some of the other trade union issues, but, for the time being, with this set of amendments in mind, I hope that the noble Lord, Lord Sharpe, will consider withdrawing his amendment.

[Lord Sharpe of Epsom (Con)]

That was a short but most interesting debate, and I am grateful to all noble Lords who participated. I am particularly grateful to the noble Lord, Lord Davies of Brixton, and the noble Baroness, Lady O’Grady, for their comments. No one on this side is denying that trade unions often have a proud history. As my noble friend Lord Deben pointed out, they have a very strong history in securing workers’ rights which has been constructive for our country over many years—no one is denying that. However, as the noble Baroness, Lady Fox, pointed out, not all modern trade unions support that history. I am sure that noble Lords would accept that.

The fact is that the world has evolved, and these amendments simply respect that evolution. My noble friend Lord Moynihan points out that only 22% of workers are currently unionised. The latest figure that I can find for the private sector is 12.3%. The other 88% have not been prevented from joining a trade union; they have exercised a choice not to, a democratic choice, so trying to argue that this proposal is somehow undemocratic makes no sense in the context of the rest of the Bill. Why, for example, does the Bill later on scrap the 40% turnout requirement for statutory recognition? That seems profoundly undemocratic.

Having said all that, I am obviously very grateful to the Minister for her response, and I accept that there are probably technical issues with my amendment. With that helpful hint, I shall improve them for the next time that we debate these measures. However, on the first day in Committee, we heard the Government argue that, in relation to guaranteed hours:

“Unions can make these deals based on their knowledge of the industry and with a holistic view on what is best for their workers”.—[Official Report, 29/4/25; col. 1203.]


If the Government are willing to accept that logic for trade unions, surely the same reasoning must be extended to independent staff bodies and employment forums, many of which are embedded deeply within the day-to-day life of a company and have even greater practical knowledge of their specific industries and workplaces. In some cases, those bodies are closer to the operational realities of individual businesses than remote union structures, and they are more trusted by the employees themselves.

The debate should ultimately be about respecting individual workers and their choices. The Government’s stance suggests a lack of trust in individual workers and the belief that, unless a worker is represented through a traditional trade union, their voice is somehow less valid or less informed. Fundamentally, it appears that the Government do not believe in the individual and do not trust workers to know what works best in their own context; instead, they insist on a one-size-fits-all approach, even when that model may be entirely foreign to a smaller business or industries where union involvement has never been the norm.

What about the many employees who are content with their current representation? Will they now be told that their structures are not good enough and that they have to change, bring in new frameworks, hire experts and prepare for union-led negotiations, whether they want them or not? Will industries that have long enjoyed stable relations be pushed into more adversarial models, creating the very tensions that this Bill should be seeking to avoid? Can the Minister perhaps enlighten us as to how smaller businesses and those that have never operated within a unionised environment will adapt to rigid models such as this, which assume that union involvement is the only valid route to collective agreement?

These amendments do not challenge the value of trade unions—very far from it. They simply recognise that unions are not the only route to fair and effective representation. If the Government are truly serious about modernising employment rights, we must begin by acknowledging the diversity of how workers organise today. For now, I am of course content to withdraw the amendment.

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Moved by

[Baroness Jones of Whitchurch]

45: Clause 6, page 34, line 14, at end insert—
““work-finding agency” has the meaning given by section 27BV;”Member’s explanatory statement
The definition of “work-finding agency” in proposed section 27BV of the Employment Rights Act 1996 applies for the purposes of Part 2A of that Act. This amendment adds reference to the definition to the Part 2A interpretation provision in proposed section 27BZ2 of that Act.

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Moved by

[Baroness Jones of Whitchurch]

46: Schedule 2, page 178, line 27, at end insert—
“Insolvency Act 1986
A1 In the Insolvency Act 1986, in Schedule 6 (categories of preferential debts), in paragraph 13(2), before paragraph (a) insert—“(za) a payment under section 27BP(1) of, or paragraph 21(1) of Schedule A1 to, the Employment Rights Act 1996 (payment for a cancelled, moved or curtailed shift);”.”Member’s explanatory statement
This amendment will make payments under proposed section 27BP(1) of, and paragraph 21(1) of Schedule A1 to, the Employment Rights Act 1996 (payments for cancelled, moved or curtailed shifts) preferential debts for the purposes of the Insolvency Act 1986.

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[Lord Fox (LD)]

My Lords, the minute hand of legislation is approaching the blessed relief of adjournment, so I am going to reserve what I have to say about statutory sick pay to when I speak to Amendments 73 and 74 in the next group, in which I think some issues of the costs are addressed. I know the noble Baroness, Lady Coffey, and I have come up with amendments that are broadly similar, and I think it would be more appropriate to speak there.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I am pleased that we have moved on and that we are now debating the Bill’s important provisions to improve the provision of statutory sick pay for millions of people across the country. I therefore thank the noble Lords, Lord Sharpe and Lord Hunt, for tabling Amendments 68, 69, 70 and 71 on this topic and speaking to them. These amendments would significantly change the statutory sick pay measures in the Bill.

The pandemic exposed just how precarious work and life are for those on low incomes, with many forced to choose between their health and financial hardship. Strengthening statutory sick pay is part of the Government’s manifesto commitment to implement our plan to make work pay, ensuring that the statutory net of sick pay is available to those who need it most. These changes are important. Estimates indicate that up to 33% of influenza-like illnesses are acquired in the workplace. One sick employee coming into work can lead to 12% of the workforce becoming sick, according to WPI Economics’ modelling.

The changes to remove the waiting period and lower earnings limit from the SSP system will therefore benefit employers by reducing presenteeism, which in turn can lead to overall productivity increases and can contribute to a positive work culture that better helps recruit and retain staff. This can help to reduce the overall rate and cost of sickness absence to businesses, and also contribute to reducing the flow of employees into economic inactivity.

I will turn first to Amendments 68 and 70. Removing the waiting period is essential to ensure that all eligible employees can take the time off work they need to recover from being sick, regardless of whether they are an agency worker. Removing the waiting period will also better enable phased returns to work, which evidence shows can be an effective tool in supporting people with long-term health conditions to return to and stay in work. This change should help to reduce the overall rate and cost of sickness absence to businesses, contributing to reducing the flow of employees into economic inactivity.

I regret that the noble Lord’s amendment would make this more challenging, as it would mean that employees would have to take two consecutive days off to be eligible for statutory sick pay. I do, however, understand the noble Lord’s concerns about the impact of the waiting period removal on businesses, but if employers have the right policies and practices in place—and most good employers do—the risks of inappropriate absenteeism can, of course, be mitigated. Crucially, the additional cost to business of the SSP reforms is around a relatively modest £15 per employee. We have been lobbied from both directions on these provisions because, for example, many on our own Benches would say that the rates we are proposing here should be much higher. I am sure they will make their concerns heard at some point during the passage of the Bill. It is not a great deal of money—as I say, it is £15 per employee—and it is certainly aimed at the lower rate that could be available.

On Amendment 69 regarding agency workers, one of the fundamental principles of the Bill is to ensure that people who work through employment agencies and employment businesses have comparable rights and protections to their counterparts who are directly employed. Amendments that limit the entitlement of agency workers would undermine this objective and have no reasonable justification. The noble Lord, Lord Hunt, said that employment agencies have more of an arm’s-length arrangement with their agency workers, but I would say the opposite: in fact, employment agencies are in a powerful relationship over their agency workers, meaning that those workers are less likely to abuse such a scheme.

Amendment 71 seeks to limit the maximum entitlement of SSP for employees with multiple employers so that they would receive no more statutory sick pay than they would be entitled to if they worked for only one employer. However, this would be administratively very complicated to deliver for businesses, particularly SMEs, and carries a high risk of SSP being miscalculated and employees being underpaid. It would particularly harm the very lowest-paid people who are working a limited number of hours. I also question the necessity of such an amendment. As it stands, employees with more than one job can already receive SSP from their employers if they earn above the lower earnings limit. The measures in the Bill will not change that, and I regret that this amendment would impact only the lowest-paid employees.

That is all I have to say on this issue at this stage, and I therefore ask the noble Lord to withdraw his amendment on the basis of the assurance I have given.

[Lord Hunt of Wirral (Con)]

My Lords, I recognise that the Minister says that she understands the concern that has been expressed. We are aware too that many agencies have raised with the Government the serious impact on small businesses and the risk of increased absenteeism. I believe their concerns are valid and I hope the Minister will continue to keep an open door for those agencies to perhaps respond in more detail directly to the Minister.

Online Safety

Baroness Jones of Whitchurch Excerpts

Thursday 1st December 2016 Lords Chamber

[Baroness Jones of Whitchurch (Lab)]

My Lords, I am extremely grateful to the noble Baroness, Lady Howe, for tabling this debate today and I echo the comments of everyone in this debate in thanking her for her tireless work in championing the need for improved online safety for children. As various noble Lords have said, when the history is written, her name will be written there in lights, I am sure. I am also grateful that she has raised this important concern about whether our proposed UK age verification regime will fall foul of the EU net neutrality rules. I am hoping that the Minister will be able to add some certainty to what seems at the moment a rather murky area of law.

We would not be here today if there were not a sense of growing crisis about the damage caused by children viewing online pornography. I will not repeat everything said by the noble Baroness, Lady Howe, and others, but the full impact of online pornography on children’s attitudes to sex and relationships is becoming more and more apparent. We know that young people are accessing it at a younger age, many by accident, or because it is sent to them by social media. The NSPCC found that over half of young people between the ages of 11 and 18 had been exposed to online pornography, and nearly all of that group had seen it by the age of 14. The NSPCC also reported that the boys who had seen it felt that it was realistic and the girls who saw it felt pressured by the images they had seen.

There is now also evidence that children in primary schools are being exposed to this material. We have to accept that this is storing up trouble for the future and completely skewing young people’s healthy sexual development. Indeed, it was recently reported that 5,500 sexual offences in schools had been reported to the police and we can imagine that that is the tip of the iceberg and represents only the more serious offences.

Of course, this is why our party has argued consistently for compulsory, age-appropriate sex education in schools—a policy supported by over 70% of teachers, parents and governors and supported very widely in this Chamber. It is why we continue to be dismayed by the Government’s resistance to what seems to us to be an overwhelmingly sensible proposal. Nevertheless, we welcomed the moves by the Government in the Digital Economy Bill to strengthen the age verification process for accessing adult content online. We have supported the steps taken so far to introduce age verification for online content. We have supported the agreement with the British Board of Film Classification that it will become the regulator for online viewing. We accept that it has the knowledge and expertise to carry out this function effectively. However, we remain concerned that the scope of the Bill is limited and will not embrace all online pornography. We are even more concerned that the lack of clear enforcement powers will limit the Bill’s effectiveness. In essence we believe that having two regulators, the BBFC and Ofcom, risks further delays in requiring non-compliant providers to take down material in breach of the law.

This brings us back to the issue before us today, which is the enforceability of the measures in the Bill. The right reverend Prelate the Bishop of Chester said quite rightly that it is becoming a rather thick plot. This is because in parallel with the UK’s moves to strengthen child online protection, the EU has been moving in a rather different direction. Through its net neutrality regulations it has developed a set of EU-wide regulations to safeguard open internet access. On the face of it, the UK’s proposals for age-specific filters and controls on the internet are at odds with those EU regulations. This was flagged up by the then Minister, Ed Vaizey, when it first came before the Commons European Scrutiny Committee. At the time he said that further negotiations would need to take place, but that it might be necessary to vote against the EU proposals. However, as noble Lords know, the proposals were also wrapped up in a package to end mobile phone roaming charges, which of course was a very welcome development. As I understand the final outcome of the EU negotiations, the specific exemption of the UK’s child online protection regime was dropped, although the UK was given an extended deadline until this month, December 2016, to comply with the new EU regulations. Subsequent to that decision the then Prime Minister, David Cameron, was quoted as saying that an EU opt-out on the child protection issues had been secured, but that is not my reading of the proceedings at the EU level. I would therefore be grateful if the Minister could clarify the status of that decision once and for all.

Since that time, the Digital Economy Bill has been published and debated in the Commons. The Bill included proposals for the regulator to direct internet service providers to block any site that does not have age verification in place. In the Committee debate in the Commons the Minister, Matt Hancock, claimed that Clause 8 reinforced the protection of parental filters where they can be turned off by the end user, which was allowed under the net neutrality rules. However, as we have heard, at the Report stage of the Bill on Monday this week, the Government tabled a significant number of amendments to the age verification process. We are still working through all the implications of those amendments. But the Minister, Matt Hancock, specifically announced that further amendments will be tabled here in the Lords to put the net neutrality issue beyond doubt and to confirm that providers can offer parental control filters.

In the light of the continuing uncertainty, can the Minister clarify what legal advice has been received on whether the new proposals comply with the net neutrality regulations? Can she assure us that any proposals will address the unintended or potentially unintended consequences related to out-of-home use, such as in wi-fi hotspots where it would not be possible for age verification filters to be turned off? Can she also clarify how this obligation on ISPs will apply to websites originating in the rest of the EU which are covered by a different interpretation of the net neutrality rules? Finally, given the new powers that have been passed to the BBFC, can she clarify whether Ofcom or the BBFC will now have the responsibility for checking compliance with the new EU regulations?

I realise that the Minister has been working on this issue for some time, and I also realise that it has been moving apace since the Digital Economy Bill was published. However, I am sure that she realises the sensitivity of this subject and the concern of many campaigners about the need for improved child protection on this important issue. I hope that she will be able to use this opportunity to clarify the legal situation and put parental minds at rest in advance of the more detailed deliberation on the Bill.

Bus Services Bill [HL]

Baroness Jones of Whitchurch Excerpts

Monday 4th July 2016 Lords Chamber

Moved by

[Baroness Jones of Whitchurch]

21: Clause 4, page 14, leave out lines 36 and 37

[Baroness Jones of Whitchurch (Lab)]

My Lords, our Amendments 21, 38, 39 and 40 go to the heart of the concerns that we raised at Second Reading about the restrictions on local authorities being able to access the new franchising model set out in the Bill. As it stands, a mayoral combined authority can automatically opt for a franchise scheme if it feels that it is right for its locality. However, all other categories of single or combined authorities must first seek the permission of the Secretary of State. Their decision would then need to be endorsed by affirmative regulation. Our amendments simplify and streamline that process, taking the Secretary of State out of the equation and creating a level playing field for local authorities.

We share a common purpose in wanting to improve the number of passenger journeys and drive up standards. We know that the franchising model works; the statistics for bus use in London are testament to that. No doubt this is part of the reason that the Government have finally embraced it as appropriate for mayoral authorities. However, no one has satisfactorily explained why, if it is good for one model of local authority leadership, it should not work equally well in other areas. It is not at all clear what the unique wisdom of mayoral authorities is. As I said at Second Reading, there is a wider game of politics going on here. Clearly, the Government are scratching around to find incentives for local authorities to adopt their preferred model of local leadership. This has been alighted upon as a bargaining chip; it has nothing to do with improving bus provision.

The threat of Secretary of State interference in local authority decisions, as set out in this Bill, surely runs counter to the shared aspiration of both the Government and the Opposition to devolve more power to localities and let local communities shape the services that are right for them. Our view is shared by the Local Government Association, which has endorsed our amendments. It takes the view that all areas should be given automatic rights to bus franchising powers, with the decision taken locally, based on robust evidence and taking into account the needs of passengers, local residents and other circumstances such as the performance of local bus markets. Its view is shared by many other smaller bus operators. For example, Dai Powell, the chief executive of HCT, which provides more than 20 million passenger journeys a year said:

“The power for Local Authorities to franchise their local bus services has the ability to revolutionise the UK bus industry. It’s pretty clear that franchising has the capability to bring significant benefits to the travelling public through enabling network development that meets the needs of communities”.

The only group that seems to be lukewarm about the franchising model and our proposals to streamline and extend the model are the existing local large bus operators. However—being realistic—they would say that, wouldn’t they? The existing arrangements have, of course, served them well. They may result in a poorer bus service, but they have also delivered large profits for them. A recent Competition Commission investigation concluded that bus operator profits are higher than in any other business sector deploying comparable levels of capital at equivalent risk. Across Britain, bus companies’ average operating profit in the 10 years to 2013 was £297 million a year. Bus companies in the unregulated big cities made average profits of 8%, whereas profits in London are less than 4%. So we can see why they may be reluctant to embrace change and support the franchising model. However, we do not accept that position. It cannot be right that around 10% of public money going into bus subsidies is ending up being paid out in profit dividends rather than improving the local bus service. Our amendments would make it clearer for local authorities as a whole to do what is in the best interests of their local community, without bureaucratic, costly and lengthy interference from the Minister.

Meanwhile, as the noble Lord the Minister has been made aware, the Delegated Powers and Regulatory Reform Committee has also raised its own concerns about this clause. It has flagged up the inadequate explanation in the Explanatory Notes as to why different rules are being applied to mayoral and non-mayoral authorities. It says:

“We have therefore found it difficult to assess, on the basis of the explanation in the memorandum, whether it is appropriate to delegate to the Secretary of State a power to allow the authorities referred to in section 123A(4)(b) to (f) to become franchising authorities, instead of this arising immediately upon the commencement of clause 4. The House may therefore wish to ask the Minister to provide a fuller rationale for the power in new section 123A(4)”.

I think that we would all like to have an explanation for the Government’s discrimination against the non-mayoral authorities in the Bill. The noble Lord has said that he intends to respond to that committee. We would all be interested in that response, so perhaps the noble Lord can let the Committee know when it will be available. In the meantime, regardless of that, we believe that these amendments are crucial to making the Bill a success. I beg to move.

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[Lord Snape (Lab)]

My Lords, I am not getting involved in the squabble between noble Lords opposite, because I want to start one of my own, on this side. The fact is that I have never been in favour of franchising and I do not think that the proposals for franchising in the Bill are particularly sensible either.

I listened with interest to the view of the noble Lord, Lord True. I know that he is enormously talented, but I am not sure that he is qualified to run a bus company—although, obviously, as the leader of a council, he feels that he should. I share his view that elected mayors are not capable of running bus companies either, but we all know why they are being given that responsibility. Having created these large authorities against the wishes of the electors in cities such as Birmingham and Manchester, they have to give them something to do—and I am sure that letting them run the buses seemed to the Treasury to have been a good idea at the time.

I have asked Ministers about this and, indeed, the Minister here today indicated that the extra money needed to run those bus services in our large cities will be provided by the Treasury. That is not normally the way that the Treasury goes about things and it seems to me that these responsibilities are being passed on to big-city level without the resources to deliver them adequately.

Again, I have to say to my noble friend on the Front Bench that I do not share her view of the bus industry as it used to be. It is a bit like British Rail: everybody tells me how wonderful it was. Actually, I used to work for it and I did not think that it was particularly wonderful at the time. Now it is implied that the bus industry, when it was under municipal control, was a picture of tranquil harmony, with lots of satisfied passengers. I have bored your Lordships before with my own career, such as it was, in the bus industry, but, when I worked for Travel West Midlands, it was a group of municipal undertakings that were put together as a result of the 1968 Act, semi-privatised by the Conservative Government of the 1980s and actually acquired by its employees.

When I became a director of the company I did not think for a moment that it was due to my talent: I was told afterwards that I was the one person who both management and staff could agree on at the time. I am not sure whether that was praise or condemnation, but I became a director of the company in 1992. Many of its buses were quite ancient. The average age of the bus fleet of Travel West Midlands in 1992 was nine and a half years. After we, the employees, voted in 1997 to join the National Express Group, the age of the bus fleet when I stepped down as chairman in 2000 was just over six years. That was a quite dramatic reduction and indicates the amount of investment that was put into new vehicles during that period.

If bus services are franchised, what will happen to that investment? I have to say to my noble friend that, because we were a subsidiary of the National Express Group, it was my job and the job of the other directors to make a case for investment to the main board. We actually invested around £30 million during the time I was directly involved, in tranches of around £10 million each time. We had to convince the board of the National Express Group that it was sensible to invest that sort of money in bus services in Birmingham.

Does my noble friend think for a moment we would have got the go-ahead from the National Express Group if the idea of franchising was being held over the company’s head at that time? I will answer my own question: the fact is that we would not have got the go-ahead, because the view of the National Express board would have been, “We are not prepared to spend £10 million of our assets on buses when someone else—whether it is the noble Lord, Lord True, or someone else—will tell us where to run them, when to run them and how much to charge”.

Again, reverting to those so-called halcyon days of municipal control, my noble friend talked about the amount of profit that was made by the five major bus operators. As I have indicated, many of them operate new fleets. As far as wages are concerned, I will confine my remarks to Travel West Midlands, where I was chairman of the board. We paid our drivers the best rates in the United Kingdom, so those profits were not made off the sweat of the brow of our employees, although of course some went to shareholders. I know that we have some disagreements at the moment about the leadership of my party, to say the least, but I do not think that we are entirely anti-profit-making yet. We will have to see what happens in the next few days and weeks, but I do not think we object to companies paying their shareholders a dividend and paying their staff an adequate wage.

[Baroness Jones of Whitchurch]

I have been listening to my noble friend’s rant, and I have to say that he is completely misrepresenting the point that I was making. I am not advocating a return to the old days, and he is rehearsing the history of things that were probably before my time. First, municipal services, as it happens, now have some of the highest satisfaction levels, so I am not saying that there is anything wrong with municipal services. That is a debate for another day, and we will return to it. Secondly, we are here today because, having allowed the free market that he is advocating to thrive, passenger numbers and satisfaction levels are going down. That is why the Government brought this Bill forward in the first place. To be absolutely honest, I am not sure that my noble friend has addressed that. We are considering options such as franchising because it is considered that it will drive standards up again, which is what we all need.

[Lord Snape]

Passenger numbers are indeed going down—they are going down in London, as a matter of fact—as is passenger satisfaction. I do wish that my noble friend, instead of relying entirely on the Local Government Association and what used to be called the Passenger Transport Executive Group, would actually look at the facts. Passenger satisfaction in London, according to the most accurate survey, by Passenger Focus, is currently less than that in Birmingham, for example. Passenger numbers are also going down in London, and they are going down for one simple reason: it is nothing to do with franchising, private ownership or whatever but because of congestion. We all know how bad congestion is in London, and it is getting worse, which is impacting on passenger carryings at present.

I have been trying to find out how many staff are employed in Transport for London exclusively on franchising matters. I am told that it is some hundreds, but I cannot get anything more accurate than that. This is not going to be a cheap operation if the noble Lord, Lord True, and his colleagues are going to run the buses in his part of the world. Despite his talent, he is not going to do it on his own; presumably there will be a director of franchising, perhaps a couple of assistant directors and other staff. Lots of money that perhaps could and should be spent on improving bus services will be spent on the bureaucracy that is necessary—I am not complaining; it is a fact—to run a franchising operation. I have to say to my noble friend that it is not just in London where the operation is run like that; Belfast has a franchising system, and, of course, due to congestion in Belfast, passenger carryings are falling there too.

If my noble friend had stood at that Dispatch Box and advocated the rest of the London experience such as sensible traffic control, the proper maintenance and policing of bus lanes, and perhaps even a congestion charge—or car park charges, as introduced in Nottingham—there would be some sense in that, but we are getting none of that. We are told that if we go to franchising, somehow the situation for the bus passenger, who rarely gets a mention when we discuss these matters, will magically improve. I do not believe a word of it.

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[Lord Ahmad of Wimbledon]

Perhaps I may respond to that. As I am sure the noble Lord appreciates, every devolution deal involves detailed discussions between the Government and those proposing the deal. No doubt if a particular area, wherever it may be, wishes to go down that route, it would be subject to discussions around the devolution deal.

[Baroness Jones of Whitchurch]

I thank the Minister for his response and I thank noble Lords around the Chamber for their support, particularly that of the noble Lords, Lord True and Lord Horam, which I welcome. The noble Lord, Lord True, has done half of my summing up of the debate for me which I would otherwise have done. I want to look carefully at the Hansard report of this debate because I am still not clear about what is so special about mayors. I was really hoping that the Minister would explain what is so unique about that particular model. My noble friend Lord Woolmer made the point that you could have two adjoining authorities with the same geography, the same population and income, but one of them would have a fast track to automatic franchising purely because of the fact that it has a mayoral system rather than another one while the other would have to go through a very convoluted process.

I do not understand what it is about the mayoral model that is so important. It is not just about the geography and economics or even the strategic role, as the Minister has suggested; there is something much more singular about a particular local government structure. The fact is that we trust local authorities with making very serious decisions already. We entrust social services issues to them where they make life-or-death decisions about child protection. We trust them to take serious decisions in the commissioning of all sorts of services. It is not as if they do not already commission services and of course they have the expertise to do so. Running a bus service does not require particularly special skills which authorities do not already have. Some might not choose a franchising model, which is perfectly understandable, while others may want to have it. I do not quite understand what is so special about having a mayor in charge that would qualify them in this way.

[Lord Snape]

My noble friend mentioned the special skills of local authorities, which certainly exist. But, with respect, they do not have any franchising skills because that is not the way we operate bus services at present. Does she agree that setting up franchising in a big-city area would be an expensive and bureaucratic process? I have no idea how many people it would take, but it could not be done by one person or even a small department, could it?

--- Later in debate ---

[Baroness Jones of Whitchurch]

Of course, the provisions in the Bill allow for all that, and that is one factor that needs to be taken into account. But the local authority would not do it unless it thought that the outcome would be better than the current provision. If the authority did a cost-benefit analysis and decided that the cost outweighed the benefits, it simply would not do it. All that we are asking for is for authorities to have the flexibility to do that analysis and then decide whether it is in their interest to go ahead.

Another thing that I was going to pick up on was what the noble Lord said about providing certainty to the bus operators. Franchising also provides some certainty; the operators’ profits may not be as high but they would certainly have a guaranteed long-term contract. That outweighs the higher-risk, more market-driven decisions that the operators would otherwise take.

I think that everyone in the Committee knows that the Minister cannot make a decision on this today. We have all talked about the current political uncertainty. We all know where this is coming from and I do not expect for one minute that the noble Lord will say today that he will overturn the decisions of the higher authorities in the Conservative Party on this. But perhaps at some point before Report he could take back a message to whoever is calling the shots and say that there is a strong feeling in the Committee on this and that there should be an opportunity for a rethink. On that basis, I do not wish to say any more and I beg leave to withdraw the amendment.

Amendment 21 withdrawn.

--- Later in debate ---

[Lord Snape]

I am grateful to my noble friend for that definition of his view. However, that view would pertain only between reasonable people. We have to bear in mind that not all people—some of them elected—are necessarily reasonable.

In Tyne and Wear, for example, the passenger transport authority went to court to try to get what was called a quality contract under the previous legislation. A considerable amount of public money was spent, and eventually the people appointed to rule on these matters said that the existing service should be continued and denied the PTA the right to a quality contract. As I said, Tyne and Wear PTA went to court, and spent a considerable amount of public money, despite satisfaction ratings of more than 80% with the current services, as set out by Passenger Focus, of thousands of bus passengers countrywide, including in the north-east. We are not dealing entirely with completely reasonable people. I hope that I can convince my noble friend. I repeat that the temptation for any democratic body when being offered extra powers is not to turn them down.

The amendments are designed to ensure that the question of a franchising agreement is a last resort rather than a first one. The consequential amendments follow on from that. I hope that the Minister will feel that they are both sensible and reasonable and will be inclined to accept them. I beg to move.

[Baroness Jones of Whitchurch]

My Lords, I will be brief. I have listened carefully to the contribution of my noble friend. As he indicated, he is making these proposals in the context of being against franchising. On that basis, we are not convinced that these amendments are necessary.

As it stands, the Bill requires those considering a franchise scheme to prepare an assessment that considers the merits of franchising weighed against other options. My noble friend is suggesting that they would just steam ahead regardless, but the checks and balances in the Bill make that unlikely and, indeed, impossible. We would expect there to be a detailed, thoughtful piece of work by the local authority that genuinely balances the different options in the context of what is in the best interest of the local community.

As it stands, the Bill requires the assessment to consider affordability, value for money and how it would apply to wider authority policies. We believe that that is the right tone to adopt when making an assessment. My noble friend’s proposals would go further than that and require greater certainty that all the conditions are met at that stage. We believe that that would go too far and discourage authorities from going through that appraisal and assessment process before making any decisions, which is the important point.

Therefore, we believe that the checks and balances in the Bill are the right way to go forward. There are many stages in the assessment process that would allow the proposal to be fully scrutinised, including a full audit, which we are going to talk about later. We want authorities to consider all that in an open and thoughtful way and go through what is in the best interests of the locality, taking into account all the factors and complexities of moving to a franchise situation, which my noble friend has identified—but it must be done in a balanced way. We believe that the provisions in the Bill should be supported.

[Lord Ahmad of Wimbledon]

My Lords, I thank the noble Lord for tabling his amendment. He proposes a series of amendments that would change the nature of the assessment that franchising authorities must prepare for their proposed franchising scheme before determining whether to introduce franchising.

In thanking the noble Lord, let me assure him that we recognise the importance of ensuring that decisions to move to a model of franchising are taken on the back of a robust assessment. In developing the Bill we have been keen to move away from the processes set out in the Transport Act 2000 that must be followed before a quality contract scheme can be established. That legislation required authorities to be satisfied that a number of tests had been met before introducing such a scheme. As was touched on at Second Reading, only one authority ever attempted to use the quality contract scheme legislation to introduce a quality contract scheme. In part I think this was because the “must pass” tests proved to be too restrictive.

I agree entirely with the noble Lord that authorities looking to franchise must consider whether the scheme is affordable, represents value for money and contributes to the implementation of relevant policies. But I think that devolved decision-making must be respected, with the mayor or authority considering the issues listed in Section 123B and any other relevant issues when assessing their scheme, and then taking reasonable decisions with their eyes wide open. I do not want to repeat the failings of the quality contract scheme legislation, and I want to ensure that franchising is a realistic option where it makes sense locally. I am concerned that the amendments as proposed would unnecessarily restrict mayors and authorities by requiring them to be satisfied about a number of issues, rather than requiring them to set out their thinking and rationale. I agree entirely, though, that I would expect authorities to proceed with franchising only where there is a strong case to do so. However, I do not want to rule out, for example, an authority proceeding with franchising where a scheme contributes hugely to its transport policies but not necessarily to its other published policies affecting local services.

The noble Lord raised a specific issue about operators having assets such as bus garages being taken away or awarded to winning bidders. It is important to note that the Bill does not give authorities powers to acquire bus operators’ assets. Authorities could potentially come to agreements with operators or lease new depots or garages to those winning businesses.

I trust that this short debate has helped to assure the noble Lord that the Bill as drafted will ensure that authorities consider a number of specific factors in their assessment of whether to move to a franchising model and allow decisions to be taken in the light of local circumstances. I hope that the noble Lord is reassured to the extent that he feels able to withdraw his amendment.