Employment Rights Bill

Baroness Lawlor Excerpts

Committee stage
Tuesday 29th April 2025 Lords Chamber

[Baroness Meyer (Con)]

Unions; thank you. Remove flexibility and you remove opportunity. This will especially attack young people looking for their first job. We will end up with more workers’ rights but fewer jobs. That is why we need to examine this Bill and take account of all of the amendments—or, possibly, just scrap the Bill altogether.

[Baroness Lawlor (Con)]

My Lords, I support—

[Noble Lords]

Front Bench!

[Lord Katz (Lab)]

I remind noble Lords that we are in Committee, not at Second Reading. We have heard a few speeches now that have strayed a little from the precise content of the amendments that we are speaking to. I urge noble Lords to concentrate on those amendments rather than making Second Reading speeches so that we can get on and make progress.

[Baroness Lawlor (Con)]

My Lords, I support the amendment moved by the noble Lord, Lord Fox, for reasons of transparency and clarity. As we have heard today, there is too much being added to the Bill. We have not had proper sight of the Government’s amendments until it is too late. How can any business plan for the future with this hotchpotch of a Bill changing by the day?

On top of that, I echo what my noble friend Lady Neville-Rolfe said and I would add a competitiveness and growth purpose here. We had it in the Financial Services and Markets Act. It helps to focus people’s minds on the law, on the overall purpose, on what we mean by the economy we run and on what its aims are.

I cannot agree with the noble Lords opposite who point out, with different conclusions, that our labour laws are streets behind those of European countries. Like the noble Lord, Lord Fox, I believe that the dynamism in Britain’s economy is due to it being a competitive market economy—one that has historically been open to trade and competes and, for that reason, can offer job security and good wages on a competitive basis. Part of that is a flexible labour market.

I am worried that this Bill—particularly given that the purpose is not economic growth and competitiveness—will stultify and freeze growth and, as a consequence, the labour market. The people who will suffer will be workers themselves, who will not get jobs or job security. For these reasons, I support the noble Lord, Lord Fox.

I close by remembering a German economist who worked under Chancellor Merkel in her global economics department at the time of the discussions around whether Britain would remain in the EU or leave it. This economist implored Britain to stay, because, without Britain, Europe would have a frozen economy, its labour market would lack dynamism and its competitiveness with the wider world—with the Asian and global markets—would stultify. It therefore seems very bizarre that we are trying to put the clock back on labour market legislation and stop the flexibility which should be at the heart of any dynamic market economy.

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[Lord Fox (LD)]

My Lords, it is with some trepidation but some pleasure that I follow that speech. I rise to speak to Amendment 4, which is in my name, and to offer support to Amendments 7 and 15 in the name of my noble friend Lord Goddard, although he will speak to those on his own account.

Speaking on the previous group, I said that there should be a change in the polarity of the guaranteed hours offer from an obligation to offer to a more streamlined right to request. We have heard in the previous two speeches that the aim is for this offer to be made to people who want it rather than there being an obligation to make it to everybody, when we know for a fact that a large number of people who will get the offer will not want to take it up. It is unnecessary activity when there is plenty to do in business. It is a very simple principle, and I genuinely do not think it subverts the intention of the Bill, in the same way as I think the noble Lord, Lord Wolfson, was trying not to subvert the purpose of the Bill but to help it succeed while helping business at the same time. In a sense, that reflects the point I made before withdrawing Amendment 1. It is really asking the Government to have some understanding of how these things will be delivered on the ground, in the workplace. That is why the previous speech was so helpfully revealing.

I think that a large part of the early part of this Bill is designed to deal, in essence, with a number of employers who the Government have in the back of their mind as not doing the right thing and not achieving what we would all like to achieve. I understand that. Unfortunately, it is dragging the whole business programme, from microbusinesses right up to huge businesses, into a series of practices to crack those particular nuts. Later in Committee, my noble friend Lord Clement-Jones will introduce Amendment 318, which targets the sort of employer who I think the Government have in their mind as bad or exploitative. It would create, in essence, a new class of employee, the dependent contractor, which is in fact in many cases what we are starting to look at. It would sharpen the regulatory focus, particularly on some elements of gig economy employers, but avoid the heavy-handed approach that we are in danger of using with this Bill.

Amendment 4, and I think there are a couple of others that are very similar, would simply reverse that polarity to: if employees ask for it, the employer is obliged to deliver it. Some obligation on employers occasionally to remind their employees that they are entitled to ask for this would help the process.

As for the rest of the group, I will listen with interest to the noble Lord, Lord Sharpe, when he comes to his amendments. I think much of this will be addressed also when we get to the issue of freelancers and to the amendment tabled by my noble friend Lord Clement-Jones, so I imagine this is not the last time that we will have some elements of this discussion, but some sign from the Government Front Bench that they understand that something should and could be addressed in this area would be a good starting point.

[Baroness Lawlor (Con)]

My Lords, I rise to speak in support of Amendments 3, 6 and 9 in this group, tabled by my noble friend Lord Sharpe of Epsom and supported by my noble friend Lord Hunt of Wirral. I also support Amendment 8 tabled by my noble friend Lord Wolfson of Aspley Guise, but for different reasons. I will not speak on that, but I like the idea of a low-hours contract. I will speak about zero-hours contracts, because I do not believe they are getting a fair look in.

These amendments would give workers the right to request, rather than putting an obligation on employers to guarantee hours. I think they are worth while and worth supporting. In the labour market this year, there are 33.9 million people employed. Of them, 1.3 million are on zero-hours contracts. There has been an increase since 2000 of 805,000 people on this type of employment contract. This is 3.1% of employment in the UK. Most are young people in the 16 to 24 age group. This is a popular way of working; the figures speak to that. There has been far more significant an increase in this type of contract than in the overall type of working arrangements chosen by employees and their employers.

Much of the popularity lies in the flexibility on both sides. The evidence is that the majority of people on zero hours, 60%, do not want more hours, although some, 16%, do. Amendments that would allow an employee to request guaranteed hours as distinct from obliging the employer to guarantee certain hours seem more in tune with people’s wishes. Of those on zero-hours contracts, around 1 million are young people. However, 946,000 16 to 24 year-olds are not in employment, education or training; that is around 50%. Yes, people on these contracts may work fewer hours than other workers—I gather the average is around 21.8 hours a week compared with 36.5 hours for all people in employment—but is it not better that there are jobs which people want and can get, particularly young people who may not yet be in the labour market or who may have been thrown out of the labour market or left it for one of the many reasons we hear about it? I am afraid that it seems from the Government’s approach that they do not think so.

This Bill and Clause 1 must be seen in the overall context of the party opposite’s approach to labour market and economy reform. Not only is the NIC tax hike on the productive sector along with the decrease in the NIC threshold taking £24 billion out, affecting 800,000 businesses and their ability to employ people and offer opportunity to the 16 to 24 age group, but other costs have been piled high, one on top of the other, since the party opposite came to power. Of those employed in December 2024, 27.8 million were in the private sector and 6.14 million in the public sector. If employers are obliged to move to guaranteed hours, that will most likely serve to cut the number of people productively employed under these arrangements, with a corresponding decrease in output and growth. Surely these amendments speak for themselves, and a Government whose priority is to increase economic growth should accept them.

[Baroness Verma (Con)]

My Lords, I declare my interests as laid out in the register. I regret that I was unable to speak at Second Reading. As someone who has been an employer for over 40 years for various small businesses, and knowing that these amendments were coming up, I spent the weekend speaking to small and medium-sized businesses, particularly the small businesses in my home city of Leicester. All were very concerned about the impact that the Bill may have, if it becomes law, in providing a set amount of guaranteed hours.

I come from the home care sector—that is one of my businesses—which really does work on contracts in which we do not, and cannot, guarantee hours, simply because of the nature of the job. We do not know when people will require care or for how long, how long they will be in hospital for, or whatever. The hospitality sector is in exactly in the same place.

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[Lord Ashcombe (Con)]

My Lords, it a pleasure to support my noble friend Lady Noakes and the noble Lords, Lord Londesborough and Lord Vaux of Harrowden, on Amendment 5 and their other amendment.

Small businesses and microbusinesses form a vital component of our national economy. These enterprises, while often agile and innovative, are particularly vulnerable to regulatory and financial pressures. Like all businesses—I should declare that I work for a very large American insurance broker—these enterprises have had to absorb the recent increases in the national minimum wage and adapt to the changes in national insurance contributions legislation. However, unlike larger businesses, they often lack the structural resilience and financial buffer to absorb such changes with ease. The impact on them is therefore disproportionate. This amendment proposes a sensible and measured opt-out for SMEs from additional obligations stemming from the proposed changes to zero-hours contracts—specifically, the move towards tightly prescribed guaranteed hours. As the Government’s own impact assessment acknowledges, these reforms are likely to have a disproportionate cost on small businesses and microbusinesses. I stress that this is not speculation but is drawn directly from the Government’s impact analysis.

Small businesses and microbusinesses span a wide range of sectors, but many are embedded within the UK as world-renowned creative industries that bring global acclaim and substantial economic benefit to this country. Many are driven by the energy, passion and commitment of individual entrepreneurs and small teams. I have had the privilege of speaking with several such business owners during the course of this Bill, and a recurring concern has emerged: the smaller the business, the harder it is to digest and manage such legislative change. Some have gone so far as to tell me that they are considering closing their operations altogether. That is a deeply troubling prospect. It is no exaggeration to say that measures such as these, if applied without nuance, risk undermining the very entrepreneurial spirit that we so often celebrate in this House.

There seems to be a regrettable habit forming on the Government Benches of legislating in ways that hinder rather than help the economic engines of this country. This approach is not conducive to national growth. It is not conducive to competitiveness. It is not conducive to job creation. It is certainly not conducive to easing the burden on the Exchequer—quite the opposite. Driving small businesses to closure will reduce tax receipts and increase demand for state support. We need to encourage investment, not chase it away.

Can the Minister explain clearly why this legislation must apply so rigidly to a critical sector of our economy? Why must we impose further burdens on the very businesses that we rely on so much for our innovation, employment and growth? Is there no room for proportionality and no scope for recognising the distinct challenges that are faced by the smallest enterprises? What I have said applies, to a great extent, to the middle-sized companies mentioned in Amendment 282, tabled by my noble friends Lord Sharpe and Lord Hunt of Wirral.

I leave your Lordships with a quote from the Spirit of Law by Montesquieu:

“Commerce … wanders across the earth, flees from where it is oppressed, and remains where it is left to breathe”.

[Baroness Lawlor (Con)]

My Lords, I support the amendments tabled by my noble friend Lady Noakes and the other amendments in this group. I do so as an employer, and my interests are declared in the register.

I am a very small employer, in a not-for-profit company. I am therefore one of the microbusinesses to which my noble friend Lady Noakes has referred—those which have zero to nine employees. I echo what the noble Lord, Lord Londesborough, said: smaller businesses will find it very difficult to afford the costs which this Bill will impose upon them.

Small businesses and the employers in them are not the adversaries of those we take on. Many small businesses, including a number in the digital sector, are start-ups—some started in that garage, about which Hermann Hauser once spoke. They build up their teams and develop by commitment. Each member of the team taken on is an asset—not just an expensive potential asset but a cost to begin with, in time and in the compliance of dealing with every member of the workforce. Such businesses do not have large HR teams or sometimes any HR teams. There is a cost in the salary and in trying to keep the employee by continuing to raise the salary as often as one can. There is also a cost in the investment of time.

Future of the Post Office

Baroness Lawlor Excerpts

Monday 18th November 2024 Lords Chamber

[Baroness Jones of Whitchurch (Lab)]

My Lords, I think we have all learned the lesson from the Horizon scandal that you cannot assume that the computer is always right. I absolutely agree with the noble Lord that we need to be much more sceptical when presented with that kind of evidence in future.

On digital exclusion, the noble Lord is absolutely right. It is a huge issue for the Government and we are taking it very seriously. A huge piece of work is going on around this. Obviously, our ambition is to make sure that everybody has the skills and capacity to go online and access services, because it is to their benefit; it makes their life easier. The proposals we have—for example, the Government’s One Login service, will always have the option for individuals to go in person to a post office to access those services as an alternative. We will make sure that people are not excluded. But the real challenge relates to the discussion we were having earlier with the noble Baroness, Lady Smith, about education and skills; it is our intention to make sure that people have the skills, education, capacity and equipment to go online and have all the advantages that the digital world will offer them.

[Baroness Lawlor (Con)]

My Lords, I understand that no joined-up assessment has been made of the impact of potential closures on local economies. Could the noble Baroness correct me if I am wrong? I ask her to commit to making an impact assessment of the Budget adding £25 billion to employers’ employment costs, which will drive down confidence, especially in small businesses, for either awarding pay rises or hiring staff. This will have a great impact on local post offices—added to this new question of insecurity. Could the noble Baroness commit the Government to making an impact assessment of local employment prospects should these closures go ahead, and to bringing that impact assessment to this House?

[Baroness Jones of Whitchurch (Lab)]

My Lords, this is a matter for the Post Office and the strategic review it has carried out. It will have to make the decisions about the cost-effectiveness of its proposals. We are talking and liaising with them, and I reiterate the point I made earlier: no decision has been taken yet. A full consultation is taking place with, among others, the unions about the future of these properties that are potentially on the line. We are looking for alternative ways to keep those post offices open.

On the issue of the Budget, as I said earlier, we had to make some difficult choices, but we have increased the employment allowance to simplify and reform employers’ national insurance contributions, and we have delivered a permanent reduction of 40% in business rates relief for eligible retail properties, which will include a lot of high street post offices as well.

Construction Sector: Cash Retentions

Baroness Lawlor Excerpts

Tuesday 10th September 2024 Lords Chamber

[Baroness Jones of Whitchurch (Lab)]

My Lords, as I have said, it is important that we seek the views of industry on any reforms. We will take further action and obviously we will welcome the views of Members of this House, as well as the construction industry, as part of that process. The noble Baroness and other noble Lords have talked about safety and we are acutely aware of the situation with the Grenfell Tower final report, which highlights the systemic failure of institutions and individuals to ensure building safety and the safety of construction products and materials. My honourable friend the Parliamentary Under-Secretary of State for Building Safety and Homelessness tabled a Written Statement on 2 September that commits the Government to a system-wide reform of the construction products regulatory regime. Those reforms will take account of the recommendations of the Grenfell Tower inquiry.

[Baroness Lawlor (Con)]

My Lords, I thank the Minister for her replies so far. On her last answer, what proportion of businesses and organisations will be small or will represent small contractors and businesses in this trade? It is they who suffer most, which, as noble Lords have said, can lead to bankruptcies. If you are stuck with payments to make yourself for materials and supplies and you have not been paid by the overall contractor, you may go out of business. It is very important to bear in mind that we should give higher emphasis to the smaller contractors and businesses.

[Baroness Jones of Whitchurch (Lab)]

The noble Baroness is right that the smaller businesses are getting squeezed at the end of the supply chain, but we are already making progress with the steps that have been taken, which will continue with the new regulations that we will introduce. There have already been improvements in payment performance since 2018: for example, the average time to pay invoices has come down from 45 to 32 days. We are doing this on a step-by-step basis and we are working with industry—the construction sector—to make sure that this is what people want and truly effective.