Employment Rights Bill

Debate between Baroness Jones of Whitchurch and Lord Londesborough

3rd reading
Wednesday 3rd September 2025 Lords Chamber

[Lord Londesborough (CB)]

My Lords, I think we have spent 13 days in this Chamber scrutinising this critical Bill. I salute the Ministers and Front Benches for their stamina and perseverance. The Bill has tested the patience of noble Lords on all sides of this House, so I will not test their patience further by going over the same arguments we heard during Committee and Report—very often the same arguments. I will simply raise one overriding question expressed by the FSB, the CBI, the ICAEW, the British Chambers of Commerce and, indeed, pretty much the whole private sector. They are asking, in light of the Bill, how committed the Government really are to delivering on their overriding number one mission—real, sustainable economic growth —and how the Bill will impact on the two crucial ingredients behind growth: job creation and, as we have heard, productivity.

On job creation, vacancies have now fallen to an effective 10-year low when you exclude the exceptional pandemic years. The Bill looks set to accelerate that downward trend. On the need for greater productivity across our 30-million workforce, employers are currently paying, on average, 5% annual wage increases for close to zero productivity gains. The Prime Minister and Chancellor have hailed this as an achievement, putting more pounds in workers’ pockets, but I am afraid that it is as illusory as it is inflationary, and will only contribute to ever-widening black holes.

The Bill will, as the Government admit, push up even further the costs of employment and damage the risk/reward equations behind recruitment, probation and employers’ ability to conduct those crucial performance reviews for staff. That is bad news for productivity, and I fear it will not go unnoticed by investors.

[Baroness Jones of Whitchurch (Lab)]

My Lords, first, I will respond to my noble friend Lady Warwick about Universities UK’s concerns. Given the stage of the parliamentary passage that the Bill has reached and the fact that the House has agreed that Clause 36 should stand part of the Bill, the clause will not be considered further during ping-pong. But as my noble friend knows, I have written to her on this issue, and the letter is available for all Members to read. We fully recognise the need not to impose disproportionate burdens on smaller procuring organisations such as universities and, to this end, we intend to consult in the autumn on the detail and scope of the two-tier code. The consultation will consider the extent to which certain public authorities, including higher education providers, are required to follow its provisions. While I cannot comment on whether we can carve out particular sectors before this consultation, I can assure my noble friend that we will carefully consider the issues, particularly applying to higher education providers.

Secondly, I thank the noble Lord, Lord Goddard, for his kind comments. I think it is fair to say that we have enjoyed working with him.

I am sorry that we have ended on a note of discord in this debate. I thought that we had, up until this point, had very courteous discussions around all this. The fact that there are relatively few issues remaining between us is a sign of the enormous work that this House has done over the last few months on this issue. I hope that, because there are so few areas of continuing disagreement, we can reach a conclusion on this Bill very quickly.

I do not want to rehearse the debates that we have had again. Listening to this debate this afternoon, it is a miracle that only 10 or so issues are still outstanding because it feels as if we are back at square one. But I feel that we made some progress during the course of the discussions.

When we came into office we inherited an economy that was on its knees and employment rights that were way out of date. We have been working and continue to work to address these issues. We are doing it in all sorts of ways. The small business strategy that we launched over the summer, the industrial strategy and the trade strategy are all designed to make the UK a place to do business with on an international basis and where jobs will be protected in the future.

On the state of the economy—because I have been provoked on this—in the three months to June, GDP grew by 0.3%, meaning the cumulative growth this year has already exceeded the OBR’s forecast for the whole of 2025. Since the start of the Parliament, 380,000 jobs have been added. Britain has become the most attractive place to invest in the world, joint top with India following its deal with the US. The FTSE 100 index smashed through the 9,000-point mark this July, with sustained growth throughout last month. Middle market businesses are growing at their fastest rate since the last election, according to research from NatWest. Confidence among UK businesses has grown, with 54% of companies feeling positive about the current environment, according to the Lloyds Business Barometer. I could go on.

We are positive about the opportunities ahead for our economy and, in that context, we are positive about the jobs that will be provided. They will be good jobs where people feel that they have a stake in their employment and a positive future. I am sorry we ended up on that discordant note, and of course I am sure we will come back and continue to try to iron out the remaining points of difference. In the meantime, I beg to move.

Employment Rights Bill

Debate between Baroness Jones of Whitchurch and Lord Londesborough

Report stage
Monday 14th July 2025 Lords Chamber

[Lord Londesborough (CB)]

My Lords, I support all the amendments in this first group, but I shall speak briefly to Amendment 9 in the name of the noble Baroness, Lady Noakes, which, as she explained, is an amendment to the Government’s Amendment 8, and Amendment 22. I want to interrogate the wording of the Government’s Amendment 8. We have a 309-page Bill. There is a lot of concern outside, at the coal face, from businesses about definitions and what the Bill means. This is a good example:

“In exercising the power under subsection (6) the Secretary of State must, in particular, have regard to … the desirability of preventing this Chapter from having a significant adverse effect on employers who are dealing with exceptional circumstances”.


Can the Minister explain how these exceptional circumstances are defined, and how significant does the adverse effect need to be for it to be regarded by the Secretary of State?

I ask that mindful of the latest survey from the Federation of Small Businesses, just a couple of days ago, which surely signals significant adverse effects for the majority of small and micro-businesses. For the first time in its history, the FSB reports that more UK small firms expect to shrink, sell up or shut down over the next 12 months than anticipate growth. The FSB’s Q2 small business index shows that 27% of small businesses expect to contract, close or be sold, outstripping the 25% which are planning for growth, and it marks the first time that the balance has tipped towards pessimism since the index began. As the noble Baroness, Lady Noakes, points out in her amendment, there is no need to layer “exceptional circumstances” on to already significant adverse effects on employers. It would be far neater, of course, to exempt small and micro-businesses from Clause 1, as I and many others argued throughout Committee.

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

My Lords, I first thank your Lordships’ House for the extensive engagement, debate and scrutiny that this Bill received throughout Committee. Indeed, we have held over 50 engagements with noble Lords from across your Lordships’ House since the Bill left the other place. As we progress Report, I need to remind noble Lords that the Government were elected on a manifesto commitment to make work pay. This Bill marks the first phase in delivering that commitment. Once implemented, it will raise the minimum floor of employment rights, provide a level playing field for businesses which are already engaged in good practice and raise living standards across the country. Alongside the new industrial strategy, the Bill will support our mission to increase productivity and create the right conditions for long-term, sustainable, inclusive and secure economic growth.

Turning to the amendments, I have listened carefully to the comments of the noble Lord, Lord Goddard, on Amendment 1. I remind noble Lords that as of March 2025, there are around 1 million people on zero-hours contracts in the UK. About 33% of them have been with their current employer for less than 12 months and 51% for less than two years. These are the most vulnerable individuals in the workforce. The Government are therefore committed to ending exploitative zero-hours contracts, which the noble Lord, Lord Goddard, quite rightly describes as “precarious employment”.

Employment Rights Bill: Productivity

Debate between Baroness Jones of Whitchurch and Lord Londesborough

Monday 31st March 2025 Lords Chamber

[Baroness Jones of Whitchurch (Lab)]

The noble Lord is right: we will have many happy hours debating this Bill in Committee and on Report in due course. On the issue of freelancers, he will know that this is only one piece of legislation. The make work pay programme includes a much more substantial piece of legislation. Where issues cannot be resolved fully in this legislation, they will come up in the wider Bills going forward.

[Lord Londesborough (CB)]

My Lords, this claim that the Bill supports productivity falls under the economic analysis section, which some have, perhaps rather unkindly, referred to as the economic fantasy section. The argument is similar to the one used for NICs Bill: increase the cost of employment; take out jobs at the lower-paid end; invest more in tech and innovation; and increase the average productivity of those left in employment. Does the Minister not agree that the danger with a flat economy, such as we have at the moment, is that we end up simply increasing unemployment, depressing real wages and lowering overall growth?

[Baroness Jones of Whitchurch (Lab)]

My Lords, we have to be clear about the fiscal inheritance which we inherited from the previous Government.