Employment Rights Bill

Baroness Lawlor Excerpts

Committee stage
Monday 19th May 2025 Lords Chamber

[Lord Londesborough (CB)]

My Lords, I will speak in particular to Amendments 83 to 85, tabled by the noble Lord, Lord Young of Acton. Clause 20, on harassment by third parties, although well-intentioned, has triggered this batch of amendments, none of which is perfect. Most seek to damage limit the Bill or bring in exemptions.

I will focus on the exemptions proposed in Amendment 85 and declare up front a relevant interest, in that I hold a significant minority stake in a rural community pub in mid-Wales. As we have already heard, the hospitality sector is low margin and struggling with a range of issues, including shortages of staff, smoking bans, competition from supermarkets, the rise of home entertainment, big tech and social media. Pubs specifically have had a horrendous time. In England and Wales alone, we have lost 13,000 pubs in the past 25 years and, as we have heard, each and every week another 10 close their doors for the final time.

Now this Bill expects the owner or the bar manager, often on low pay and inexperienced, to take on the role of a conversation arbiter or chat monitor in case a customer says something to their drinking or dining pal that is overheard and deemed offensive by an employee. To be clear, I accept that employers should step up if their customers or clients are being offensive to their staff. Yes, they have a responsibility to their staff’s welfare and to their code of conduct, but is legislating in this way the answer? It leaves so many questions, on a subjective level, of what is offensive and what is not.

That brings me to the second sector proposed for exemption by Amendment 85: sports venues. This is where Clause 20 threatens to become unworkable. This struck me only yesterday while I was in the London Stadium, with 60,000 others, watching West Ham stumble to yet another home defeat, this time against Nottingham Forest. There was a lot of anger in the crowd and much of the language could be described as vulgar or offensive. Others would call it passionate, fruity, spiky or humorous, but these views could be heard—or, importantly, overheard—by club officials, security staff, stewards, the police, bar staff, programme sellers and burger flippers, all of whom are employees of the club, the stadium, or various contractors and subcontractors. These views, in the space of 10 minutes, included the manager’s IQ being questioned vigorously and frequently; savaging of the players and their work ethic; forthright suggestions that the referee’s assistant should book multiple appointments at Specsavers; and, finally, the referee himself being repeatedly accused of practising self-love.

I am choosing my words carefully and not quoting directly in order to meet this House’s Code of Conduct, which I respect and have signed up to, but if I did not and repeated some of the profanities I heard yesterday, I would be in trouble. Here is the thing: Parliament, as an employer, would not currently be taken to a tribunal by a colleague, a doorkeeper or a Hansard employee who found my language offensive, but that could change if this Bill has its way.

The point is that most workplaces are covered by a code of conduct or employer’s handbook that sets out the markers and helps sort most of these incidents without the need for dispute litigation, employment lawyers or, indeed, tribunals. Much of this is driven by common sense and human decency, and the mutual interest of employer and employee to ensure a productive and harmonious working environment. Clause 20 threatens to undo much of that. I ask the Minister and this Government to seriously think again.

[Baroness Lawlor (Con)]

I rise to support the amendments in the names of my noble friends Lord Young of Acton and Lady Noakes to Clauses 20 and 21. Both noted, as have other noble Lords, the impact these clauses will have on small businesses already struggling under a juggernaut of burdens, particularly those introduced since last July.

I begin with my noble friend Lady Noakes’s amendments to Clause 21, which, as she noted, amends the Equality Act 2010. These amendments, Amendments 89 to 96, would require regulations to specify the steps an employer needs to take to prevent the harassment of an employee and to cover all forms of harassment so that, provided those steps are followed, the employer is protected from liability. This change is reasonable and proportionate, in that it would oblige regulations to specify the steps needed to protect employers from liability to claims. It is a matter of fairness and good law that a measure should be clear about the duties under it, rather than leaving it to litigation.

The measure also has precedents, such as health and safety regulations in which employers’ duties are set out. In the Management of Health and Safety at Work Regulations 1999 the main duties are to identify risks, assess them and reduce them. The Workplace (Health, Safety and Welfare) Regulations 1992 require employers to provide adequate lighting, heating, ventilation and workspace and to keep them in a clean condition—and so on throughout the health and safety regulations of the 1990s. As if to egg the cake, we have the HSE’s guide on the steps needed to manage risk, which sets out step by step the process for controlling health and safety risk, in line with the regulations to identify hazards, assess risk and so on.

My noble friend Lady Noakes’s amendments to Clause 21 would ensure that employers know what is required in respect of preventing harassment, which matters in itself and is germane to good law. I therefore support them.

I also support Amendments 83 to 88, to Clause 20, in the names of my noble friends Lord Young of Acton and Lady Noakes. They address what is and is not required of employers in protecting their employees; clarify harassment to exclude

“the expression of an opinion on a political, moral, religious or social matter, provided the opinion is not indecent or grossly offensive”;

exclude the hospitality sector, university settings and sports venues so the obligation on the employer does not apply; exclude indirect harassment; take account of the employee’s perception of the circumstances and whether it was reasonable to have the effect; and take account of whether it was an isolated incident. These are all important amendments that have a great deal of support across the Committee.

Noble Lords have already explained how Clause 20 could undermine freedom of speech. We are not speaking of an employer’s liability for direct harassment by a third party, such as customers or clients, against an employee. That is covered by Section 40 of the Equality Act 2010. Rather, the clause being amended has the effect of making the employer liable for what third parties say when speaking among themselves, and which is then overheard by an employee. This might occur in a bar, restaurant, shop, the foyer of a cinema or theatre or on public transport. Customers in a restaurant or a bar might be discussing the latest immigration figures, the likelihood of yet more unsustainable migration into the country, the shortage of housing, schools and hospitals, ever longer waiting lists for a place or a bed, or an inability to understand English. To hold an employer liable for a private conversation among customers overheard by an employee is wrong. It would bring the law into disrepute.

--- Later in debate ---

[Baroness Jones of Whitchurch (Lab)]

There is harassment, and what we are debating now is third-party harassment. Obviously, tribunals would have to take into account the practicality of enforcing third-party harassment, and I have been trying to set out the grounds on which it would be considered either reasonable or unreasonable. That would have to be considered case by case, but nevertheless the issue is very different from an employee’s absolute right not to be harassed directly in the workplace.

[Baroness Lawlor (Con)]

I am a bit puzzled as to how the tribunal will measure this alleged harassment, given the different interpretations that could be put on it. There are some conflicts, as we have heard today.

[Baroness Jones of Whitchurch (Lab)]

I thought I had explained that in my description, and I do not really want to have to repeat it. I explained the grounds that would be considered when comparing harassment with acceptable behaviour.

Amendment 85 also seeks to significantly reduce the scope of Clause 20 by excluding the hospitality sector, sports venues and higher education. This would create a disparity and a hierarchy of protections across employers and sectors, leaving swathes of employees without equal protection. This cannot be justified, given that employers in these sectors will be required only to do what is reasonable, and this will depend on their specific circumstances.

Amendment 86 seeks to reinstate the three-strike rule that was repealed in 2013. However, as I have explained, an isolated or one-off incident is much less likely to amount to harassment than continuing acts. The recent Free Speech Union campaign against this clause stated that

“when the Equality Act was originally passed, it included a clause making employers liable for the harassment of employees by third parties, but it was repealed in 2013 because it proved to be so costly and difficult for employers to comply with. We mustn’t make the same mistake again”.

We agree that we should not make that mistake again. We cannot see why the noble Lord, Lord Young of Acton, would wish to impose on employers the unnecessary costs and burdens that this amendment would bring. By contrast, the Government’s approach will make it simpler for employers to understand their obligations and will ensure that victims can be confident that they are protected by law.

Employment Rights Bill

Baroness Lawlor Excerpts

Committee stage
Monday 19th May 2025 Lords Chamber

[Lord Jackson of Peterborough (Con)]

I think that is a slightly odd question coming from the supporter of a Government who are not coming forward with either intangible or tangible benefits in monetisable ways. Were that in the impact assessment or the economic analysis of the Bill, I would defer to the noble Lord’s argument, but neither of them are there. Frankly, it is difficult for us to make a value judgment on the balance of obligations and responsibilities between the workforce and the employer when the data is not provided. I think the noble Lord has probably made my case. With that, I support the amendment from my noble friend on the Front Bench.

[Baroness Lawlor (Con)]

My Lords, I support my noble friends Lord Sharpe of Epsom and Lord Hunt of Wirral in proposing this impact assessment and thank my noble friend Lord Hunt for making the case so persuasively from the Front Bench. I shall simply pick up on a few points that were made in the amendment and his speech. The amendment asks for an impact assessment on free speech. Proposed new subsection (1) asks for an assessment of Sections 19 to 22 of this Act on employers. Proposed new subsection (2) says:

“The assessment must report on … the impact of sections 19 to 22 on free speech”


and include

“an assessment of the likely costs to employers”

of these sections, which must include types of occupations at risk and proposals for mitigations.

I want to comment on this amendment in the context of universities. I spoke earlier in Committee about the mitigations a university might take in its rules and in the checklist that it hands out to potential candidates for a place who want to come to that university to study and who are asked to abide by certain arrangements or rules. These rules will, if the employer and the university follow what they are required as trustees of a charity to follow, protect the costs: whatever endowment of funds the university has, it will have to follow caution. I have no doubt that undergraduates or graduate students coming in for postgraduate work will be asked to promise not to complain, or be overheard doing so, or speak ill of lecturer A, whose lectures they may not approve of, may think are no good or whatever, as happens in normal intercourse in a university.

One of the standard things you will hear as undergraduates leave the room is, “What a rotten lecture that was” or “Isn’t it interesting that such a subject didn’t touch on the kernel of the matter?” or whatever they think is important. This is the sort of education we want to impart. We want students to question and challenge. We want them to make the case against what they have heard and to think about it. To make an employer liable for a student doing what a university education should encourage—we encourage it at school too—seems to me silly. We should have an impact assessment of what will happen and what sort of steps a university will take to curtail that freedom to argue or to criticise an employee of the university. We should ask for an impact assessment. It would not be very difficult to consult universities and find out exactly how they would get around this potential liability as employers.

The same goes for mitigation and the costs which will be incurred. For example, take the costs to an institution such as a university of fighting a claim in an employment tribunal. The member of staff concerned, against whom the criticism has been made, will be on tenterhooks all the time. They may be distracted, may have to continue to give evidence to the employer, and so on, with a lot of back and forth. As for the employers, think of the staff costs, counsel charges, legal charges, administrative costs and committee costs they will incur, and the time that will be spent on that rather than on running their universities to do what they ought to do—to educate undergraduates and do research. This is the most moderate request for an impact assessment that I have heard. Noble Lords would be well advised to agree that we need an impact assessment, both on free speech and the likely costs—particularly the costs of going to a tribunal and waiting for all that period.

[Baroness Fox of Buckley (Non-Afl)]

My Lords, I, too, have my name on Amendment 97, which would introduce yet another impact assessment. I know that so many impact assessments have been proposed in relation to the Bill that it has become a bit of a cliché, but I am especially concerned that this one is taken seriously because the third-party harassment sections of the Bill are ill thought out in a way that could lead to unintended consequences.

One noble Lord a few moments ago asked why there was a desire for an impact assessment rather than thinking of the potential positives of the Bill. The response of the Government in relation to concerns about Clause 20, for example, which is to say that there is nothing to see here—no problem at all—is an insufficient way of responding to some quite detailed scrutiny that has been put forward. If there is any exaggeration of the potential problems, an impact assessment should be able to resolve that for us.

I will focus largely on Clause 20, looking first at its potential cost to employers. That is especially important given that the Minister’s counter to my remarks earlier was that Clause 20 will be good for business. The Government’s own assessment advises that the total economic impact of complying with Clause 20 will be under £10 million and will have negligible economic impact on businesses. That is irresponsible; some might go so far as to call it misinformation. For example, that assessment says that the cost of familiarisation with the Bill and its ramifications will be £30 per medium business and only £19 per small microbusiness. I am not sure where these woeful underestimates come from or what they are based on, but if noble Lords have never met an employment lawyer, I can assure them that that is an unlikely figure.

We need a serious cost-benefit analysis. Let us consider what this section of the Bill requires businesses to do. Employers must show that they have taken all reasonable steps; that sets a high threshold for preventive action, as we heard earlier. Let us think what that means. There are direct costs for the initial implementation of anti-harassment policies, including familiarisation with the new regulations and checking exactly what their legal liabilities will mean. As we have seen during this debate, it is not necessarily as clear as day what the Bill requires.

As we have been arguing, if you are a small microbusiness trying to concentrate on being a business and trying to grow bigger, having to study the Bill and work out what your liability will be could be quite time consuming, nerve-wracking and so on. They will have to seek out third-party and legal advice—no doubt, there will be lots of consultants queuing up—because, as responsible businesses, they will want to safeguard themselves from the financial risks of not complying. One of the main risks they will be trying to ensure they do not have to deal with is the possibility of employment tribunals.

In what seems like an entirely arbitrary figure, the Government predict that only 30 employment tribunals a year will come from these clauses. There is no explanation as to how the Government reached that figure, and it is certainly completely at odds with industry experts who expect that Clause 20 alone will see an increase in employment tribunals of 15%—in other words, an additional 14,750 cases a year. As we heard earlier in a different context, already in 2023-24, employment tribunal courts received 97,000 cases, up from 86,000 the year before. That is an increase of nearly 13%. More and more people are forced into employment tribunals for a variety of reasons.

This Bill threatens to create even more cases—an unknown figure because it is a new provision. The Government are saying that it will be only 30 a year, but that is just making it up. There is, at least, an attempt in this amendment to try to work it out. According to the chambers of commerce, the cost of one employment tribunal is, on average, about £8,500, and if a claimant is successful, there is no financial limit to the compensation in a harassment case. Imagine you are a business worried about what is going to happen: this clause will lead to risk-averse and overcautious behaviour, not detailed in the Bill, to try to avoid being held liable. Some of us fear that this is what this kind of over-regulatory, precautionary approach will lead to.

Businesses will not be able to be slipshod about their potential liability. Smaller SMEs and microbusinesses —often with no dedicated HR or EDI offices—will need to think about employing new staff dedicated to protecting them from claims and giving them advice. The idea of a whole new generation of HR and EDI staff roles in every business in the country is frightening enough, but, anyway, it has nothing to do with their core businesses. Let us also note that the average salary of an EDI officer in the UK is £42,084.

I want also to stress why an impact assessment must include which occupations might be at particular risk of third-party harassment claims through no fault of the employer and the impact, specifically, on free speech. These parts of the amendment are very important because we were asked earlier in a different group why there had been a focus on hospitality, sport and universities. There may be other sectors but, in a way, this is an assessment to see which sectors would be affected. It also asks for an impact assessment on free speech. As we have heard, the Government simply deny that there will be any impact in relation to free speech. I disagree, but let us scrutinise it.

The noble Baroness, Lady Chakrabarti, made the point that we should not worry about free speech because it is protected by the convention on human rights. She cited a number of clauses. It is true that, on paper, none of us should be worried about free speech; our free speech in this country is fully protected. And yet, daily—I stress, daily—there are more and more instances, as the noble Baroness, Lady Deech, who is not in her place, indicated earlier, in which free speech is under stress in this country. More and more people are walking on eggshells and are, in many instances, getting sacked or disciplined for speaking their minds in workplaces, so I am not convinced by “Nothing to see here, don’t worry about it, all is well”.

Earlier, the noble Baroness—

Employment Rights Bill

Baroness Lawlor Excerpts

Committee stage
Tuesday 13th May 2025 Lords Chamber

[Baroness Noakes (Con)]

My Lords, my main concern with the changes to statutory sick pay in this Bill is the impact on smaller businesses, which is why I support the amendments in this group in the names of my noble friend Lady Coffey and the noble Lord, Lord Fox, which provide for rebates for SMEs. Of the two amendments, I prefer that of my noble friend Lady Coffey because it clearly undoes the harms that Clause 10 will cause.

I could not find much data on how much businesses actually pay in statutory sick pay, but I suspect that, unless an employer is unlucky enough to get an employee who has long-duration sickness, most will be paying relatively little at present, because absences are mainly for less than four days. What the data does show is that most sickness absences are for minor illnesses, which are unlikely to exceed three days. The average days lost per worker per year in 2023, which is the most recent data I could find, is just short of eight days. Among smaller and micro-businesses, that falls to around five days.

Extending the days for which payment is made is likely to increase the number of days lost to sickness, as the current incentive to work if the illness is mild will simply disappear. The Government say they have no idea what the behavioural impact of the changes will be—whether positive or negative—but I am prepared to bet that there will be far more short-duration absences, which will qualify for statutory sick pay, than there were before.

If I am right that most SMEs do not currently pay much in the way of statutory sick pay, the changes in the Bill will straightforwardly increase their costs. An average small business of between 10 and 49 employees has about 20 employees, which means that the average for a small business will be to pay for at least 100 days of sickness that they do not currently have, which would amount to around £2,000 in additional costs each year, even if no additional sick days were taken, which I doubt. That is not a huge amount per business, but it adds up to many billions of pounds across the whole economy. It also, of course, comes on top of the jobs tax and the very significant increases in the national minimum wage, which leads me to the likely real consequences of this change on top of the others. Put simply, SMEs will not hire workers unless they absolutely have to. We can already see evidence of that from the surveys of smaller businesses and in the weakening labour market—my noble friend Lord Sharpe of Epsom gave us an up-to-date view on that. It is only going to get worse.

Furthermore, all those groups that we as a nation want to get back into work, in particular those who are long-term sick, will simply not be attractive to employers. Any hint of an illness record in a job applicant’s background will count against them, because no employer would want to take on the additional costs that would automatically come with that employee.

I am sure that I do not need to remind the Committee that SMEs employ nearly half the private sector work- force. A reluctance to hire among SMEs will kill growth and opportunities for many of the groups that we need to be employed in this country. There is a simple way to solve this problem, set out in Amendments 73 and 74. The Government would be wise to go down that route.

[Baroness Lawlor (Con)]

My Lords, I shall speak in support of Amendments 71A and 71B in the name of my noble friend Lord Sharpe of Epsom, Amendment 73 in the name of my noble friend Lady Coffey, and Amendment 74 in the name of the noble Lord, Lord Fox, for a rebate scheme.

Amendments 71A and 71B propose a sensible modification to Clause 11 and strike a more affordable approach for a business paying the employee for time not worked, as well as for the compliance and record-keeping involved. I say “more affordable” rather than “fair” because many businesses—particularly small and micro-businesses, as we continue to hear in Committee —will struggle to stay afloat and in business, given the juggernaut of additional costs, burdens and increased obligations imposed by this Bill. That includes those in this clause and those in previous clauses that we have discussed.

In Clause 11, such costs are to be imposed for those below the lower earnings limit, as we have heard, which will add to the extra costs paid by employers. They will potentially open further problems raised in the impact assessment, the modelling for which suggests a rosier picture for business than the available evidence warrants but also raises questions of behavioural response. Indeed, that consideration was a fundamental principle addressed in the welfare state proposals by Sir William Beveridge in his blueprint Social Insurance and Allied Services in 1942. The original National Insurance Act was framed as a contributory scheme with strict conditions on benefit to avoid creating perverse incentives.

The impact assessment for this measure—which models outcomes on the basis of a variety of factors, including some unproven assumptions—contends that there is evidence suggesting that overall sickness absence may be reduced but, on the basis of evidence considered from other countries, says that it is

“possible that regulation changes induce a behavioural response”

and that

“studies from other countries have found that the incidences of sickness absences are higher when sick pay is more generous. There could be an increased number of sickness absence days taken due to improved financial protection”.

We can read that in whatever way we like, and we have heard different interpretations of more generous statutory sick pay, but it is incumbent on the Government to return to some of the original principles in the national insurance system in this country and to think further about not creating perverse incentives. There will now be days for which the employer will pay for which there is absolutely no productivity gain.

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.

--- Later in debate ---

[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.

--- Later in debate ---

[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.