UK Steel Strategy
Baroness Lloyd of Effra Excerpts(3 days, 22 hours ago)
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Lord Fox (LD)
My Lords, I thank the Minister for the Statement and welcome that there is a strategy here, although, as the noble Lord, Lord Sharpe, said, we were expecting it for some time. However, given what is happening in the world, reading this document conjures the image of someone trying to put up a tent in a howling blizzard, and at the heart of the blizzard are the energy market ructions caused by the Iran conflict.
The UK’s industrial energy costs were already at least twice those of the EU and four times those of the USA. The noble Lord, Lord Sharpe, and I have different multiples, but they are all very large. It is not clear to me whether these distortions that are already there in the UK energy pricing system will increase the gap as a result of the Iran issue as it bites. I doubt the gaps will narrow.
As the strategy sets out, the British industry supercharger scheme helps those companies that benefit from it. However, the steel industry comprises very many businesses, large and small, that do not qualify for the supercharger, although some may qualify for the British industrial competitiveness scheme—BICS. Can the Minister say how many steel-related businesses will benefit from BICS? However, BICS does not kick in until 2027. Given what is happening internationally, will the Minister undertake to speak with her Treasury colleagues about bringing forward the implementation of BICS? In any case, we should note that while the supercharger scheme exempts recipients from network charges, BICS does not, and those network charges are set to increase by a staggering 60%.
These are just a few of the reasons why, unless the Government revisit the energy costs issue, the steel strategy will quite simply be blown away.
Among the more eye-catching and concerning parts of the strategy are the new trade measures to introduce tariff-rate quotas and the possibility of, in future, raising most favoured nation—MFN—applied tariffs to 50%. Late last year, the Trade Remedies Authority ran its rule over imports of rebar from Vietnam and made recommendations to the Secretary of State. This was an entirely appropriate use of that body; indeed, it is what the body was created to do. Having worked on the Trade Act, which established the TRA, at the start of this decade, I see that it clearly has an important role, particularly given the wider scope of the potential actions set out in the strategy. But I do not see any reference in the strategy to the role of the TRA. Have the Government asked the TRA for its recommendations? When could we expect its report? It seems inappropriate to act without that authority.
Next, in his answer to questions in the Commons, the Secretary of State confirmed that there has been discussion with his EU counterparts and that the discussion would continue when they meet at the WTO. Can the Minister confirm that for the purposes of these discussions, steel’s treatment in the TCA—the trade and co-operation agreement with the EU—is equivalent to its treatment in an FTA; in other words, from a WTO perspective, is the TCA equal to an FTA? Furthermore, can the Minister say how, for the purposes of these discussions, the Government are treating the MoU with the USA regarding steel? I assume it does not have the status of an FTA, so how will this modify what we can legally do under the WTO with the United States?
I turn to the local impact of this strategy, which means that there remain question marks for a lot of our communities. My honourable friend in the Commons, David Chadwick MP, spoke very forcefully about the importance of steel to Wales and its economy. He also reinforced the need for faster action in ensuring that the electricity used, for example, to power the arc furnaces is green energy. I strongly commend his comments.
In geographical terms, I would like to highlight the South Yorkshire area, including Sheffield, where there is a host of important steel businesses. It is not just down to the headline firms; there are many other important businesses further down the supply chain that make up this vital steel ecosystem. These kinds of ecosystems are echoed all over the country. The Statement says the defence growth deal will be established in five areas, including South Yorkshire, as part of the defence industrial strategy. Can the Minister tell us when full details will be published? When will a defence growth deal be operational?
To support the effectiveness of a growth deal, a colleague of mine from Sheffield Council, with a strong steel background, suggests that a defence manufacturing supply chain database be built to include the hundreds of thousands of smaller tier 2 and tier 3 suppliers that are critical to our sovereign capability. In this way, the whole sector can be explicitly brought into the realm of the defence growth deal. Noble Lords will be surprised, I think, to know that there is no such survey and no such data available.
I was able to see how the Aerospace Growth Partnership worked effectively with its supply chain, and perhaps the Minister might like to look at how that operated and try to put the same principles into practice for steel. We on these Benches share the Government’s ambitions for a robust and growing steel sector, and we believe that this strategy makes some steps in the right direction. However, the already significant headwinds just got a whole lot worse. That is why success will depend on further action on energy, clarity on tariffs and a truly inclusive growth strategy.
The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)
I thank noble Lords for their rich contributions. They have raised many matters that are covered in the steel strategy and are of vital importance to the future of steel-making and its centrality to the UK’s economic success.
This steel strategy is the first one to be set out. It explains the vision and sets out bold measures across the business environment, trade, electricity costs, carbon leakage and public procurement, and it is that which distinguishes it from what has gone before. We do not believe that, although the sector does face challenges, it is inevitable that it will decline. The steel strategy’s aim is to stabilise and rebuild our existing strategy, as the noble Lord opposite mentioned, with an aim to sustain 40% to 50% of domestic demand, which of course will be tracked over the coming years. We can see the benefit of moving with this vision to a greener, high-production steel model. Sheffield Forgemasters’ electric arc furnaces have the technical capability that we need to produce steel of the highest standards.
On the question of energy prices, businesses are naturally worried about the impact of the situation in the Middle East. The Prime Minister chaired a meeting of COBRA this afternoon and the Secretary of State is meeting business organisations to look at the impact on energy prices and the supply chain. We have a diverse and resilient energy system, but we are monitoring it extremely closely. If there is a lesson, it is that reducing dependence on externally produced fossil fuels and moving to clean, green, home-produced energy has to be the way of the future. That is exactly what we are doing with the clean energy mission to increase our energy security and reduce electricity bills over the long term.
However, as noble Lords have mentioned, there are measures in place right now, including the supercharger, the energy-intensive industries compensation scheme for steel producers and, as the noble Lord mentioned, the British industrial competitiveness scheme, which will reduce bills for other businesses in the sector more widely. As I mentioned, the Prime Minister, the Chancellor and the Secretary of State are looking very closely at what needs to be done in the current context so that our businesses can be supported through this tumultuous time.
On the question of the trade measure, it is designed to shield steel-making from the damaging effects of overcapacity. This is not something that is unique to the UK. The US, Canada and the EU all apply their own similar measures to tackle overcapacity. We want to do this so that the British steel industry contributes fully to Britain’s crucial national security and defence, and to shore up the UK’s resilience to global shocks. Without this action, the UK steel-making capability faces real jeopardy, leaving us reliant on overseas suppliers. We do not want to let that happen.
I stress that this measure follows the expiry of the UK steel safeguard measure on 30 June this year, but it is a different measure and it has been carefully calibrated, following engagement with downstream importers, to get the right balance between measures to support our domestic steel industry and ensuring that those who use steel in the national economy can manage their businesses well. Following engagement with those downstream importers, we are exploring a transitional arrangement under which the new tariff would not apply to goods under contracts agreed before 14 March and imported between 1 July and 30 September 2026. We are finalising those details to ensure it provides genuine support to firms facing unexpected costs, while still protecting the UK market from excessive imports. We will also review the measure after 12 months to ensure it remains effective.
On the question of how it fits with other international agreements, with regard to the TRA, this measure is distinct from the steel safeguard and is not a replacement. It is separate from trade remedies, such as the current safeguard, which it is the Trade Remedies Authority’s role to review, so the TRA does not have a role in reviewing the new measure. On the TCA, I say that the TCA is the same as an FTA in the eyes of the WTO. I fear I have not addressed all the questions, but I am sure I will come back to them shortly.
Baroness Lloyd of Effra (Lab)
My noble friend brings his experience and wisdom to the House. Welsh steel is expected to account for half of future UK steelmaking. As he will be aware, we have also invested £500 million in the electric arc furnace in Port Talbot. In addition to that, the Secretary of State for Wales will convene the National Wealth Fund and the private sector in a new initiative to help unlock investment in Welsh steel projects to help and support communities across Wales that rely on the industry.
The Lord Bishop of Oxford
My Lords, for seven years I was privileged to be the Bishop of Sheffield, and I am familiar with the complex ecology of south Yorkshire, articulated by the noble Lord, Lord Fox. For those seven years, each year I was the guest of the Cutlers Company, who would invite a Minister, always from London and normally the Chancellor. In those years it was the coalition and Conservative Governments. The script followed by the speakers from the Cutlers Company, who did not mince their words, was always the same. It was about the neglect of the manufacturing industry by government and, in particular, high energy costs. This seems to me to be the key to the next chapter in this strategy.
I would be very grateful if the Minister could expand further and give some assurance that, in five years’ time, the Cutlers Company in Sheffield will not be making the same comments about higher electricity costs than for their partners overseas. I would also be grateful if the Minister could say something about the connection between advanced manufacturing and research, and the revitalisation of the steel industry. It was said in my time in Sheffield that Sheffield still produced as much steel by volume, but employed a fraction of the number of people, and that was because of advanced manufacturing. Thirdly, I would be really grateful for an unpacking of the defence contingency, the importance of which I would underscore.
Baroness Lloyd of Effra (Lab)
The right reverend Prelate raises some important issues. There are two elements here in respect of energy prices. The first is the immediate action we are taking, including the supercharger, to support the steel industry now. The second is the investment we are making in renewable energy, clean power and nuclear energy that will set this country on the right track to low-carbon energy that has high energy security here in the United Kingdom.
The other point, on advanced manufacturing and R&D, goes to one of the particular strengths of the United Kingdom, which is our expertise and the types of firms we have. One benefit of the industrial strategy is linking the sectors we have set out there, which of course include defence, with the importance of high-quality manufactured low-carbon steel, which is what the UK excels in.
Lord Harper (Con)
My Lords, the Minister knows that tariffs are a tax paid by the consumers of the steel that will be introduced. I have looked carefully in the steel strategy, and I cannot see any analysis of the impact of those increased costs on either our domestic construction sector or our domestic manufacturing sector. I ask the Minister, did the Government conduct such an analysis of the impact those tariffs are going to have? If they did not, why not? If they did, can they publish it, so that Members of your Lordships’ House can see the detail of the impact those taxes are going to have on our domestic manufacturing?
Baroness Lloyd of Effra (Lab)
We engaged carefully with the industry in constructing these tariffs, and we will review the measure after 12 months to ensure it remains effective.
Baroness Bennett of Manor Castle (GP)
My Lords, the Statement says:
“Britain can recycle more steel. Making better use of scrap steel is fundamental to the sector’s future growth”.
However, I am sure the Minister is aware that, currently, four-fifths of the UK’s scrap steel is exported, primarily to non-OECD countries with far lower environmental standards than us. I looked carefully at the strategy, but I could not see any actions planned by the Government to ensure that scrap steel stays in the UK to be recycled. I also could not find a target for the level of recycling that we expect of that scrap steel; I hope that it will eventually be 100%. How long will that take? If I have missed any actions and targets, I would love to hear about them.
Baroness Lloyd of Effra (Lab)
The noble Baroness is right that there is a strong emphasis on the importance of scrap steel. The move to using some of the electric arc furnaces will increase the demand for that scrap steel in our supply chain. Our move towards the aim of getting the domestic market share back to 50% will drive much more demand for domestic scrap steel.
Lord Mohammed of Tinsley (LD)
My Lords, I add my voice to the comments that were made by the right reverend Prelate, the former Bishop of Sheffield—I remember him well and his commitment to the city—particularly on the issues around the Company of Cutlers. Its members are a tough bunch but they are fair—sometimes they speak truth to power, and often that is what is required. I will follow up on the points raised by my noble friend Lord Fox, particularly on the current turmoil in the energy market with the ongoing conflicts, first, in Ukraine and, more recently, in the Middle East. I suspect that he has been speaking to many people across the steel sector and not only in Sheffield, but I will stick to Sheffield and Stocksbridge.
There is a point to be made about the cost of energy. I understand that large energy-intensive businesses can hedge energy prices over a longer period, but a number of smaller businesses, including those with limited credit available to them, are really suffering now, leading to vulnerability and volatility as energy prices are paid either a day ahead or in the short term. I will give the Minister an example. I spoke to a steel contractor over the weekend which had an order that it was preparing for last week. All the materials and energy costs were factored in at the time and it was just about to make a profit, but after the Israeli attack on the Iranian gas field and then the Iranian attack on Qatar its gas price went up by 30%, because it did not have a great credit rating. From making a potential small profit, it is now going to incur a loss. These organisations are desperately looking for help right now—not in 2027. Can the Minister say what the Government are doing, particularly now, to help small and medium-sized businesses, or those with issues with their credit rating?
Baroness Lloyd of Effra (Lab)
The noble Lord also brings his extensive interest and expertise to this. I agree that businesses will be worried about the impacts of the situation in the Middle East. The example he gave is very good at showing the practical impacts of what people are encountering day to day. We are monitoring this extremely closely and working with industry—the Secretary of State will meet with businesses in the coming days—to get a full picture of those types of impacts. The consultation on the British industrial competitiveness scheme is currently closed, but we will set out what it means in the coming period.
The Earl of Effingham (Con)
My noble friend Lord Sharpe quite rightly said that open markets are good and, following on from my noble friend Lord Harper, it is quite correct that economists may say that the uncertainty of tariff policy is not favourable for employment or investment. So I ask the Minister: why exactly do the Government think tariffs are a good idea and when can we see the assessment of the cost—the knock-on effect that tariffs will have on consumers?
Baroness Lloyd of Effra (Lab)
Like many countries, we have applied tariffs to counteract the damaging effects of global overcapacity. Our action is not unique; the US, Canada and the EU all apply similar measures to tackle overcapacity. As I mentioned, it has followed engagement and we are looking at transitional measures to ensure that those contracts that have already been put into place can be taken forward. We will also review the measure after 12 months to ensure that it remains effective.
Lord Wigley (PC)
My Lords, with the indulgence of the House, I welcome the strategy and the Statement, as far as it goes. The Government previously announced that £500 million would come to Port Talbot. Will any of the newly announced £2.5 billion come to Wales? Did the Welsh Government ask for part of that and were they given a full answer? The Minister will be aware that the steel-utilising industries that currently still exist in Wales may require high-quality steel. Is it possible for the electric arc furnaces to produce high-quality steel from recycled scrap?
Baroness Lloyd of Effra (Lab)
I thank the noble Lord for his questions. On the effectiveness of electric arc furnaces, there are a couple of points. First, at Sheffield Forgemasters, we see the technical capability to produce steel to the highest quality, for the nuclear industry, aerospace and defence. Independent experts’ view is that any grade can be made by electric arc furnaces, so that addresses the question about the quality of steel that can be made by this technology. On the other point about the benefit to Wales, we have already invested £500 million in the electric arc furnace for Port Talbot. We are working with the Secretary of State for Wales and the private sector to see what investment can be unlocked under the £2.5 billion that the National Wealth Fund will have allocated for steel projects.
Baroness Bennett of Manor Castle (GP)
My Lords, since there is time, I note that the Statement talks, I am happy to say, about the shift to “greener, decarbonised steel production”. However, will the Minister acknowledge that there is a rather great irony that when the Statement comes to consider the potential markets for this British-made steel, it talks about the third runway at Heathrow requiring 400,000 tonnes of steel? This is the third runway that, according to the Government’s own figures, uncovered by Politico last year, will result in an addition 2.4 million tonnes of CO2 equivalent being released into the atmosphere each year by 2050. This is at the same time as the Joint Intelligence Committee is warning what a great threat to our security the climate emergency is.
Baroness Lloyd of Effra (Lab)
The noble Baroness is right: there is a great market for green steel. Hatch estimates that over 90% of steel demand in the UK in 2050 will be steel produced with low emissions. The transition to net zero is across the entire economy, and we will take that forward across all sub-sectors.
Lord Harper (Con)
My Lords, since there is still time, can I just press the Minister on her attempted answer to my question? She did not confirm that there had been any kind of economic analysis. She said that there had been engagement with the sector. Can she tell us whether the customers of the steel industry—manufacturing and construction—support the introduction of 50% tariffs on their products, and that tax that they are going to have to pay?
Baroness Lloyd of Effra (Lab)
We are still in discussions with much of the sector, explaining what the precise tariffs mean across different sub-sectors, and we are gaining feedback following the publication. We continue to work across many sub-sectors and business areas on implementing the trade measure ahead of 1 July, and we will consider what information we further publish following those consultations.
Lord Mohammed of Tinsley (LD)
My Lords, given the extra time, can I just pose another question? Given that defence supply chains already receive special treatment in procurement and export controls, I wonder whether the Government would consider also extending that to energy policy.
I will give some examples: the right reverend Prelate will know exactly where I am going to come from. I live in Tinsley. Just down the road from me is the Meadowhall shopping centre, and just around the corner from there is Sheffield Forgemasters, where many members of my family worked from the 1970s and 1980s onwards. At the moment, when it comes to energy pricing, both those two—the commercial shopping centre and the steelworks—get priority in terms of the level. However, I want to push the Minister on whether the Government would consider prioritising defence, just as they do with other elements of defence, given that Sheffield Forgemasters and others will be working on that. If I was to speak to a couple of my steel contacts in the city, would the Minister consider an offer of a meeting, possibly on Zoom, to be able to go through some of these more technical issues with her and the department, rather than trying to do it from the Dispatch Box in your Lordships’ House?
Baroness Lloyd of Effra (Lab)
I thank the noble Lord. I will be happy to meet with the industry representatives he talks about and to explore this in more detail. As he knows, we have changed the steel procurement guidance more generally, updating it to ensure that UK-made steel is regularly considered in public projects, and we are requiring procurers to consult a digital catalogue of UK-made steel products. But, specifically in the realm of defence, I would be very happy to take that further with the noble Lord.
Lord Fox (LD)
My Lords, the answer that the Minister gave me on the Trade Remedies Authority was a little confusing—or it confused me, anyway. Can she set out in some detail in writing why the TRA is not involved in this? When you look at the Vietnam case, it is exactly analogous, only much less significant than the case we are looking at now. If it was good for the Vietnam rebar, why is it not good for the much larger and more important issue that we are discussing here? Perhaps a detailed letter would be helpful.
Baroness Lloyd of Effra (Lab)
This measure is distinct from the steel safeguard. It is distinct from trade remedies, which is why it is not the role of the Trade Remedies Authority to review it, because the TRA does not have a role in reviewing this measure.
Companies: Online AGMs
Baroness Lloyd of Effra Excerpts(3 days, 22 hours ago)
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Lord Lee of Trafford
To ask His Majesty’s Government what assessment they have made of the effect of companies holding their annual general meetings solely online on individual shareholders’ ability to hold directors to account.
The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)
My Lords, the Government announced on 20 January that fully virtual annual general meetings would be included in the upcoming consultation on modernising corporate reporting. Officials are engaging with investors and businesses on the practicalities of this. We will ensure that fully virtual meetings take place only where shareholders agree and that any change is accompanied by appropriate shareholder safeguards, co-created with investors and business. A full assessment will be made following the consultation and engagement period.
Lord Lee of Trafford (LD)
My Lords, too often directors forget that it is shareholders who own the company. To hold AGMs entirely virtually, barring shareholders’ attendance, is in my view arrogant, unacceptable and sometimes, frankly, cowardly. Institutional shareholders have near-continuous access to boards, but the AGM is normally private shareholders’ only opportunity. It is not just the formal part of the meeting but the opportunity to meet and question directors in the margins of the meeting. Of course, sometimes only a handful of shareholders turn up, and, yes, there is a cost, but we are talking here of the principle of shareholders’ rights. Surely the way forward is hybrid AGMs, with a choice of either virtual or physical attendance.
Baroness Lloyd of Effra (Lab)
The Government are not mandating virtual AGMs and there will be nothing to stop companies holding hybrid AGMs. As the people best placed to make decisions about their businesses, we are giving companies and shareholders the legal certainty to undertake fully virtual AGMs if it is right for them. Many investor groups in favour of hybrid AGMs support fully virtual AGMs in extraordinary circumstances. This legal clarity will provide companies the certainty they need in those situations.
Viscount Hailsham (Con)
My Lords, may I suggest that members of the awkward squad are more readily controlled in virtual meetings, and that is thoroughly undesirable? It is much better to have open general meetings, when members of the awkward squad can speak out.
Baroness Lloyd of Effra (Lab)
What we are doing through the consultation on modernising corporate reporting is delivering on our commitment to provide legal clarity on the grey area of whether companies can hold fully virtual AGMs. It would be up to shareholders and businesses to decide whether to take that forward. The proposals that we put forward will be accompanied by appropriate shareholder safeguards.
Lord Sikka (Lab)
My Lords, there is nothing in the Companies Act to say that shareholders own companies. They may have controlling rights, but that is not the same as ownership. Besides, shareholders may have short-term interests in companies; therefore, is it somewhat foolish to leave them with the control to direct companies. It is workers and customers who have lifelong interests in companies, and it is time that the Government empowered those stakeholders to promote growth and the welfare of our whole society.
Baroness Lloyd of Effra (Lab)
If my noble friend is referring to Section 172 of the Companies Act, which already requires directors to have regard in their decision-making to employee interests and
“the impact of the company’s operations on the community and the environment”,
that is a very important principle.
Lord Livingston of Parkhead (Non-Afl)
My Lords, I have been a director, and not a cowardly one, at more than 50 AGMs over the last 30 years. Some AGMs have one attendee or none, some have a few tens, some have hundreds. The costs can often be thousands of pounds per attending shareholder. Given that shareholders can vote and ask questions remotely, should it not be up to the companies to decide—which shareholders can vote on—whether they wish to have in-person AGMs or to do it completely remotely, depending on the companies’ circumstances?
Baroness Lloyd of Effra (Lab)
The noble Lord sets out the rationale for why this will form part of the modernising corporate governance consultation. It will be in the hands of the shareholders and the businesses to decide. In fact, 85% of OECD Factbook countries, including the US, Germany and Japan, already allow virtual AGMs. So this is a proposal to bring the UK into line with other comparable countries, and to clarify the legal situation.
Baroness Bottomley of Nettlestone (Con)
The AGM is a more than convenient opportunity for shareholders in this sector to express their views. Of course, they all wish that the awkward squad would stay at home, as we do in this place, but we have to put up with the awkward squad—and my noble friend is very effective at that. The Minister will know that ShareAction provides evidence that online-only meetings allow boards to
“manipulate the agenda, ignore questions and avoid scrutiny”.
Investor groups describe in-person shareholder interactions as the “cornerstone” of the financial system. Even the FRC says that the AGM provides shareholders with the opportunity to see the whites of the directors’ eyes. From my point of view, it would be a great error to discontinue face-to-face meetings. We know it in politics, we know it in charity, and it is the same in business—even if only one person shows up to your board.
Baroness Lloyd of Effra (Lab)
We are putting this forward in the modernising corporate reporting consultation to clarify the legal situation for fully virtual AGMs, as I mentioned, to bring the certainty into line with other international jurisdictions. We are engaging with investors on what those shareholder rights and safeguards might look like, so that if shareholders and businesses want to move to fully virtual AGMs, we will know what they might be. Examples could include five-year shareholder votes or best practice or guidance of that kind.
Lord Fox (LD)
My Lords, if it is the Minister’s prediction that it is left up to shareholders to make the decision, the institutional shareholders will always outvote the individual shareholders. That is why individual shareholders should have their day at an AGM. When I organised AGMs for the three FTSE companies that I worked for, the chairman and I worked very hard on preparing for the questions that the awkward squad would be coming up with at those AGMs. To remove the proximity of the shareholder from the chairman is to lose that important check. Will the Minister go back and make sure that this is a firm part of the consultation?
Baroness Lloyd of Effra (Lab)
All noble Lords and the noble Baroness have raised the importance of AGMs. They are incredibly important. They are important for engaging shareholders, large and small, but particularly, as has been mentioned, those who perhaps do not have an institutional voice. We are engaging with investors and the shareholder representative organisations on what the shareholder safeguards should be, so that will be taken into account in the consultation.
Lord Hunt of Wirral (Con)
My Lords, one of this country’s greatest strengths is our financial services sector and yet many of our firms face unnecessary regulatory and administrative burdens that make it so much harder to focus on their primary duty, which is to shareholders. In the light of the Government’s commitment to cut regulation by 25%, and given those additional pressures that businesses already face from higher employment costs and growing compliance demands, will the Government now set out what specific steps they will take to reduce the regulatory burden on financial services so that this vital and growing sector can deliver better value for shareholders, attracting investment and economic growth?
Baroness Lloyd of Effra (Lab)
As the noble Lord mentioned, getting the right regulation and reducing the administrative costs is a priority for the Government and in many areas we have already taken action to do that; for example, we no longer require certain companies to produce a strategic report. We will continue to work through the sectors and across all companies on reducing those administrative costs.
Lord Leigh of Hurley (Con)
To get back to the Question from the noble Lord, Lord Lee, who speaks as an investor, I speak as chairman of a public company and a senior partner of Cavendish plc. We welcome shareholders coming to our AGM. It is quite true that there are some shareholders who go from AGM to AGM with plastic bags, hoovering up the biscuits, but others have very valid points to make. I have been to the AGM of a company with which I disagreed vehemently on the action the directors were taking, and I was able to get my view across. If that meeting had been virtual, I would have been shut down by the PR.
Baroness Lloyd of Effra (Lab)
As I mentioned earlier, we are not mandating virtual AGMs and there will be nothing to stop companies continuing to hold hybrid AGMs. Through this consultation we are clarifying the legal grey area and providing certainty about the legitimacy of hybrid AGMs where certain shareholder safeguards are in place.
Employment Rights Act 2025 (Investigatory Powers) (Consequential Amendments) Regulations 2026
Baroness Lloyd of Effra Excerpts(2 weeks, 1 day ago)
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Baroness Lloyd of Effra
That the draft Regulations laid before the House on 27 January be approved.
Considered in Grand Committee on 9 March.
EU Digital Services Act and Regulation
Baroness Lloyd of Effra Excerpts(2 weeks, 1 day ago)
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Baroness Gill
To ask His Majesty’s Government what discussions they have held with the European Union in relation to (1) alignment with the EU Digital Services Act, and (2) greater co-operation on digital services regulation.
The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)
The Government regularly engage with the EU on digital policy, including direct discussions on the Digital Services Act, which like the UK’s Online Safety Act requires companies to take proportionate steps to protect users online. While the UK has taken its own regulatory approach, we co-operate with the EU where it supports UK citizens and businesses. The new EU-UK digital dialogue will deepen co-operation on shared challenges, including AI and online child safety.
Baroness Gill (Lab)
I thank the Minister for her response. There would be several economic, regulatory and strategic benefits if the UK were to be part of the EU’s Digital Services Act. Scale matters when it comes to dealing with the powerful global tech companies, and it is quite clear from the US’s AI action plan that it will not limit their powers. The DSA is likely to become a global standard, like GDPR, so can the Minister confirm that this Government will include it as a matter of urgency on the agenda of ongoing reset discussions with the EU, with a view to becoming a member?
Baroness Lloyd of Effra (Lab)
We have reset our relations with European partners, improving diplomatic, economic and security co-operation, and we are committed to playing a role in shaping an open, trusted digital future with the EU and other partners. We have the Online Safety Act here. We have announced consultations on future measures, including on children’s well-being, and the EU’s digital omnibus is looking at lots of other aspects of reform. Our new UK-EU digital dialogue, announced as part of the reset, will provide a structured forum for ongoing engagement on digital policy.
Lord Kirkhope of Harrogate (Con)
My Lords, the EU’s digital governance for online platforms relies on certain basic principles—they should operate transparently, responsibly and in alignment with legal standards. That is a formal basis on which we should operate too. Instead of having new laws that align with the EU, why do we not simply codify the laws that we currently have and make them applicable to these new areas, which are innovative and ever developing?
Baroness Lloyd of Effra (Lab)
We have the Online Safety Act, which is enforced by Ofcom and other regulators and, as the noble Lord will know, we announced a consultation just recently on areas that we may seek to expand or take further measures on to enhance children’s well-being.
Lord Clement-Jones (LD)
My Lords, does the Minister accept that, as part of this dialogue, close co-operation on robust competition enforcement is essential to resist growing US pressure to weaken digital rules? As the EU actively enforces its Digital Markets Act, will the Government commit to aligning in practice with strong EU enforcement standards rather than allowing US corporate lobbying to dilute the UK’s digital markets competition regime?
Baroness Lloyd of Effra (Lab)
The UK has taken decisive action to strengthen competition and fairness in digital markets. In January 2025, Parliament equipped the CMA with new powers to boost competition and innovation in digital markets. In May, the Government issued a clear steer to the CMA to prioritise this work and align action with international jurisdictions, including the EU. The UK and CMA engage regularly with EU counterparts as both regimes begin operation to help maintain close alignment on emerging issues.
Viscount Colville of Culross (CB)
My Lords, the EU already has AI legislation. Do the Government intend to bring forward their own legislation on AI and how to regulate it?
Baroness Lloyd of Effra (Lab)
Our approach is to have regulators who are sector-specific and have the expertise to look at how AI is affecting the companies they regulate and its impact.
Viscount Camrose (Con)
My Lords, many digital harms such as disinformation and illegal or fraudulent content operate across borders. In that light, can the Minister enlarge on the practical measures the Government are pursuing with the European Union to assure effective cross-border enforcement of our respective digital regulations, particularly with respect to Ofcom’s work with those responsible for enforcing the Digital Services Act?
Baroness Lloyd of Effra (Lab)
Ofcom and the EU have an agreement and talk frequently about regulatory co-operation. Ofcom is also a member of a global network of regulators, so it can share best practice and welcome further co-operation.
UK Space Economy
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Baroness Ashton of Upholland (Lab)
My Lords, at the request of my noble friend Lord Stansgate, and with his permission, I beg leave to ask the Question standing in his name on the Order Paper.
The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)
My Lords, the space economy is a top priority for the Government, who have announced a £2.8 billion investment over the spending review for the UK Space Agency, including a £1.7 billion commitment at the last European Space Agency Ministerial Council. We are strategically investing to support sector growth through a new outcomes-based, targeted approach. Through a one-government philosophy, we will grow the space economy by focusing investment on enabling businesses to commercialise and scale.
Baroness Ashton of Upholland (Lab)
I thank my noble friend the Minister for that reply. Given that, in the space inquiry we conducted, The Space Economy: Act Now or Lose Out, we identified that the space sector is worth £18.6 billion to the economy, employs 55,000 people and is growing a rate of about 6% a year, can she tell us more about the priorities across government, as space impinges on every aspect of our lives?
Baroness Lloyd of Effra (Lab)
I share the enthusiasm of my noble friend, the committee and the report for the space economy. We responded in detail to the recommendations earlier this year. We are setting out our strategic priorities, which, as the committee and my noble friend highlighted, encompassed many aspects of our lives, including defence, economic growth and support for our farming communities. We will continue to focus our spend on the priorities of economic growth and national security outcomes.
Lord Clement-Jones (LD)
My Lords, on the Government’s space plan, will they formally adopt a policy of space debris neutrality, requiring all satellites launched from the UK to have what is called a “designed to demise” commitment to prevent further orbital congestion? With an active debris removal procurement worth some £75 million, how are the Government ensuring that UK-based SMEs are not being edged out by larger international companies for these critical domestic contracts?
Baroness Lloyd of Effra (Lab)
The noble Lord raises the important issue of space debris, which creates risks to our critical national infrastructure. We are strengthening UK space surveillance and investing in debris mitigation technologies. We are seen as a leader in space sustainability, including with the international community and His Majesty the King. We are supporting important UK companies such as Astroscale to understand the risks and costs of active debris removal. In fact, there are further announcements today on this important issue of space debris removal.
Lord Cromwell (CB)
Does the Minister agree that space still lacks an effective and enforceable legal framework, including liability for the space junk that has just been referred to, which is continuously being fly-tipped in space and is now blighting the few usable orbits around our planet? If so, what are HMG doing to ensure that UK expertise in law and in insurance play leading roles in making space a less lawless frontier?
Baroness Lloyd of Effra (Lab)
The UK has a great deal of expertise on space, including on regulatory issues. We continue to collaborate internationally— for example, at the UN Committee on the Peaceful Uses of Outer Space—to shape and uphold standards, regulations, norms and agreements on best practices to define the in-orbit regime across the globe.
Baroness Mobarik (Con)
The first vertical-launch spaceport to receive planning consent was at Sutherland, in the far north of Scotland. However, Orbex, the private entity in the equation, suspended construction of Sutherland’s spaceport in December 2024, with only six months to go until the infrastructure would have been completed. Given the announcement of £1.5 billion in funding for national space programmes, what progress has now been made towards supporting the completion of the spaceport, which has already attracted interest from a number of potential launch providers? At a time when sovereign launch capability is becoming increasingly important, this infrastructure is vital not only for job creation and regional regeneration but for strengthening the UK’s space and defence capabilities. Would the Minister be willing to meet with me and key stakeholders to discuss how this project might be taken forward and how the Government can support its timely delivery?
Baroness Lloyd of Effra (Lab)
As I set out in my speech last week, assured access to space is one of the four priorities of the Government’s space policy. As I also set out then, we are pursuing our ambition of assured access to space. Last week, I announced a further £20 million of investment over the spending review to accelerate launch from Scotland. I will be working with industry and international partners to ensure that the UK has assured launch options.
Lord Lennie (Lab)
My Lords, is my noble friend the Minister aware of the space department at Northumbria University? If not, would she accept an invitation to visit it and see its extraordinary, cutting-edge research?
Baroness Lloyd of Effra (Lab)
Absolutely. One of the great pleasures of covering civil space is the enormity of expertise in our universities and companies. Almost everybody you meet is doing something ground-breaking and impressive. I would be very happy to meet the people suggested by my noble friend.
Viscount Camrose (Con)
My Lords, events in Ukraine and Iran are showing the growing military defence importance of satellite communication, navigation and earth observation systems. Given our strengths here in the UK in satellite manufacture and space data services, does the Minister agree that the UK space sector is particularly well suited to dual-use applications that support both economic growth and defensive capability? If so, is now the moment for the Government to look for further ways to promote investment in our satellite manufacturing sector?
Baroness Lloyd of Effra (Lab)
The noble Viscount makes an important point. The two priorities of our space policy are economic growth and national security; they are priorities for the whole of government and are central to our approach to space. I co-chair the Space Ministerial Forum with my colleague from the Ministry of Defence, bringing that whole-of-government approach to this important issue. In the speech I made last week on our four priorities, satellite communication was one of them; it is a real priority for the Government.
Lord Stirrup (CB)
My Lords, following on from the previous question, there is a clear and urgent strategic demand for a robust, Europe-based polar satellite constellation. This is an area where the UK should be taking a lead, but at the moment it is not. This requires urgent action and sufficient investment. Will the Government undertake to give this area a real boost?
Baroness Lloyd of Effra (Lab)
I very much agree with the noble and gallant Lord that the UK’s geography can provide particular advantages to the whole of Europe and to NATO. We are very committed to supporting the development of spaceports. Last week, I announced a further £20 million to support the development of spaceports in Scotland, so that is something we are pursuing with vigour.
Lord Harper (Con)
My Lords, I strongly support what my noble friend said about SaxaVord. I was very pleased to consent to the CAA’s regulatory approval when I was the Transport Secretary. I want to press the Minister a little more on the market size that will potentially be available to the UK with that vertical launch capability at SaxaVord. What specific steps will the Government take to ensure that we have that capability in the years to come?
Baroness Lloyd of Effra (Lab)
The noble Lord makes two important points. On the regulatory framework, the CAA has been doing some excellent work in supporting the development of a space regime that allows the UK to be a very attractive place for all sorts of space activity, including launch. The space indemnities Act is supportive of that, so I do agree with the noble Lord. As I mentioned, the £20 million that I announced last week was to accelerate the development of spaceports in Scotland for vertical launch.
British Business Bank
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Baroness Jones of Whitchurch
To ask His Majesty’s Government what criteria are used by the British Business Bank when investing in UK businesses.
The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)
My Lords, the British Business Bank’s investments are aligned with its strategic mandate, which is agreed with the Government and sets the bank’s overall strategic direction. It includes four objectives, the first of which is to support our most promising businesses in the industrial strategy priority sectors to scale and stay here. The bank is operationally independent and is responsible for undertaking its own due diligence and making investment decisions independently of government.
Baroness Jones of Whitchurch (Lab)
I thank my noble friend for that. The additional funding that has been given to the British Business Bank is welcome, but will it be encouraged to take higher risk stakes in some of our more innovative companies? Can we be assured that it has the expertise to make those critical judgments?
Baroness Lloyd of Effra (Lab)
My noble friend is right to ask about mandate and risk appetite. This is the direction that the British Business Bank is taking, guided by its new strategic mandate. It is increasingly taking bigger bets to enable innovative British companies to scale and stay in the UK. The Government have provided a one-third uplift to the BBB’s financial capacity to help it to do so. It is able to leverage deep industry expertise across its investment activities, including both direct investments and investments made through funds.
Lord Fox (LD)
My lords, as has been alluded to, as well as operating on a commercial basis the British Business Bank is expected to fill structural gaps in the capital market. As the sponsor of the British Business Bank, how does the Minister see its role in scaling up the UK defence supply chain? How will the British Business Bank help us to deliver the defence industry that we absolutely need?
Baroness Lloyd of Effra (Lab)
The British Business Bank’s new strategic mandate explicitly talks about supporting businesses in the industrial strategy priority sectors, which, as noble Lords will know, includes defence. One of the things that we will be doing is looking at where the financing gap is, whether that is for R&D intensive or deep-tech companies, and at investing behind specialist fund managers or investment strategies that specifically support particular sectors. Using its mandate, and with the increased financial capacity, the British Business Bank will be able to support our defence industry supply chain here in the UK.
Baroness Rawlings (Con)
My Lords, what are HMG doing to help the UK businesses affected by the present Gulf war?
Baroness Lloyd of Effra (Lab)
As was said earlier, we are monitoring the situation very carefully. It is unclear at present what exactly the long-term impact on energy prices and energy security will be. We are carefully looking at that. In the meantime, we have taken measures, including through the British energy-intensive industries scheme, to support energy prices for the most intensive users here in the UK.
Lord Londesborough (CB)
My Lords, the development bank has some eye-catching five-year targets, including funding the creation of 370,000 new jobs and crowding in some £26 billion of additional private capital. I welcome that ambition, but, for perspective, can the Minister say how the bank has performed over the last five years, particularly in the areas of job creation and gross value added?
Baroness Lloyd of Effra (Lab)
I may have to come back on those precise questions. The British Business Bank produces annual reports and has recently published an impact report which addresses some of the questions that the noble Lord specifically asks around job creation. That is an important aspect of its accountability for the funding it gets.
Baroness Caine of Kentish Town (Lab)
My Lords, the creative industries is a priority sector for the modern industrial strategy but not for the National Wealth Fund, as business structures seem to be better fitted to investment from the British Business Bank. Can my noble friend provide reassurance that the bank has the expertise and criteria that fit businesses such as those in the creative industries whose value lies in intellectual property, particularly while its protection is currently uncertain? In due course, can she share the comparative levels of investment made in the last two years in the key growth sectors?
Baroness Lloyd of Effra (Lab)
My noble friend is right to mention consistency with the industrial strategy. It was only in October last year that the Government gave the British Business Bank a new mandate, including to align with the industrial strategy’s priority sectors and making available £4 billion to support those areas. In setting out the priority sectors, the Government have outlined ways in which they expect the British Business Bank to meet that—for example, using specialist fund managers or tailored approaches for the specific financing and other requirements of those subsectors. Creative UK has committed to providing a single gateway to help those creative industries that need access to finance to navigate between the various sources of finance available from the Government.
Lord Ranger of Northwood (Con)
My Lords, I am a member of the Science and Technology Select Committee. We recently produced a report, Bleeding to Death, which I hope the Minister has seen, looking at the scale-up ecosystem of the UK and particularly the role of the British Business Bank. It concluded that we are in a doom loop. We do not have the scale or competitiveness, despite the extra investment in the British Business Bank. One of our recommendations was to bring different funds together, such as Innovate Finance, the National Wealth Fund and the British Business Bank. Have the Government looked at that recommendation?
Baroness Lloyd of Effra (Lab)
As I said, we are helping businesses navigate the way—for example, through the business growth service, which enables businesses to access all the types of finance and support that they need, including UK export finance and other facilities with the Government. For the creative industries, Creative UK has committed to taking that role to help those businesses navigate the way through. On supporting businesses and the VC ecosystem, there is a lot of activity with the new investor pathways programme to provide £400 million of cornerstone investments into VC funds.
Lord Mair (CB)
My Lords, to follow up on the question from the noble Lord, Lord Ranger, I have the privilege of chairing the House of Lords Select Committee on Science and Technology, and we published a report recently on the financing and scaling of UK science and technology companies. To achieve real economic growth, our report recommended that the British Business Bank should work much more closely with the National Wealth Fund and Innovate UK, and that it should focus on priority sectors and companies in the direction set by the Government’s industrial strategy, which has already been referred to. It is good that the Minister has confirmed that that is the direction being taken. Is the British Business Bank actively implementing this in conjunction with the National Wealth Fund? Is it prioritising science and technology companies and the identified sectors of the industrial strategy?
Baroness Lloyd of Effra (Lab)
The Government’s statement of strategic priorities had as its first objective to support our most promising businesses in the industrial strategy priority sectors, and the digital and technologies sector is among the industrial sectors identified. When the next annual report comes out in a year, we will be able to tell exactly how successful that has been. However, we have seen, in the light of some of the direct investments made, that the British Business Bank has taken seriously the mandate to invest directly and is pursuing that pathway.
Lord Hunt of Wirral (Con)
My Lords, does the Minister agree with me how grateful we are to the noble Baroness, Lady Jones of Whitchurch, for introducing the subject of the British Business Bank, particularly at such a key time? Does she agree that, rather than setting demographic targets for investment, we and the British Business Bank should be focusing on backing the most investable opportunities in order to maximise productivity growth and returns for the taxpayer?
Baroness Lloyd of Effra (Lab)
I could not agree more with the noble Lord’s first point: my noble friend has given us a good opportunity to talk about this important institution. The new mission set by the British Business Bank is to drive economic growth by helping smaller businesses to get the finance they need to start, scale and stay in the UK. That is how we will grow a more productive economy here in the United Kingdom.
Bereaved Partner’s Paternity Leave Regulations 2026
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Baroness Lloyd of Effra
That the draft Regulations laid before the House on 13 January be approved. Considered in Grand Committee on 2 March.
Employment Rights Act 2025 (Investigatory Powers) (Consequential Amendments) Regulations 2026
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Baroness Lloyd of Effra
That the Grand Committee do consider the Employment Rights Act 2025 (Investigatory Powers) (Consequential Amendments) Regulations 2026.
The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)
My Lords, this instrument makes consequential amendments to the Investigatory Powers Act 2016 following Parliament’s decision in the Employment Rights Act 2025 to create the Fair Work Agency, and brings together the functions of the Gangmasters and Labour Abuse Authority, the Employment Agency Standards Inspectorate and HMRC’s national minimum wage enforcement teams. It ensures that officers performing the same GLAA-derived criminal enforcement functions will continue to have access to the same investigatory tools under the same statutory thresholds and safeguards once they sit within the new agency.
Where the GLAA is currently named in the Investigatory Powers Act, these regulations update that reference so that the Department for Business and Trade, in so far as it relates to the Fair Work Agency, is listed instead. All of the underlying safeguards in the IPA, including the statutory requiring purpose, the minimum 12-month sentence threshold and the requirement for necessity and proportionality, remain exactly as Parliament originally set them.
I fully appreciate that the powers to acquire communications data are intrusive and must be used only when necessary and proportionate. These powers concern the who, when and where of a communication—that is, subscriber details, timings and location data—but not the content of any call, message or email. They do not reveal what a person said or wrote. They remain significantly less intrusive than interception, yet they are vital tools in tackling the most serious forms of labour exploitation, where victims are often too frightened, too isolated or too controlled to come forward with evidence.
It may help the Committee if I explain the scope of these powers. Under the Investigatory Powers Act, communications data authorisations will be able to be given to the FWA only for the purpose of preventing or detecting serious crime. This is defined in primary legislation, and one of the key elements is that the offence must carry a sentence of at least 12 months’ imprisonment; that statutory threshold remains unchanged. We need to ensure that the Fair Work Agency can continue to investigate the same serious exploitation offences, including unlicensed gangmastering and modern slavery, that the GLAA handles today. Those offences already meet the existing statutory definition of serious crime, and therefore fall within the same communications data authorisation framework, applying the same necessity and proportionality tests and the same independent scrutiny as before. The threshold, authorisation process and full oversight of the Investigatory Powers Commissioner remain exactly the same.
In transferring these functions to the Fair Work Agency, we have ensured that the safeguards that apply under the Investigatory Powers Act will continue in full. Communications data applications will remain subject to independent scrutiny by the Investigatory Powers Commissioner’s Office, including routine inspections and case sampling. The established single-point-of-contact system will continue to play its gatekeeping role, with an accredited specialist assessing every request to ensure that it meets the statutory crime purpose and satisfies the stringent tests of necessity and proportionality. Requests will still require authorisation by a designated senior officer at the appropriate grade and will continue to be submitted for approval by the Investigatory Powers Commissioner’s Office, with only limited provision for urgent internal authorisation.
The Fair Work Agency will operate in full compliance with the communications data code of practice, ensuring that standards of record-keeping, error reporting and handling of sensitive material remain exactly as they are today. In short, the framework of safeguards that Parliament has already put in place remains completely unchanged. The change made by this statutory instrument is the updating of the public authority’s name, ensuring continuity of capability following Parliament’s decision to transfer the GLAA’s enforcement functions to the Fair Work Agency.
The GLAA has always used these powers sparingly. Historically, the number of communications data applications has been modest and focused on a small number of the most serious investigations, often concerning organised criminal exploitation, threats of harm or potential trafficking. That discipline of “last resort” use and that culture of necessity and proportionality will continue in the Fair Work Agency.
On implementation, the Fair Work Agency will bring together three regulators into a single recognisable body, making the system easier for workers to navigate and clearer for responsible businesses. This consolidation will not dilute expertise. Existing GLAA specialists will continue to carry out GLAA-derived criminal enforcement with the same training, oversight and legal powers. Early operational arrangements, including access controls and internal governance structures, will ensure that only appropriate officers can apply for or authorise investigatory activity.
On transparency, the Investigatory Powers Commissioner will continue to report annually on the use of these powers, providing Parliament with a clear overview of how these powers are exercised. In addition, I can confirm to the Committee today that the Fair Work Agency will report on its use of the Investigatory Powers Act powers in its annual report. This will allow Parliament to see clearly that use continues to be confined to GLAA-derived criminal investigations, just as today. We will reflect this commitment in the Fair Work Agency’s framework agreement and in its enforcement policy statement, in line with good practice.
This statutory instrument is essential housekeeping. It prevents an unintended and undesirable drop in capability during a period of organisational transition and ensures continuity in tackling serious labour exploitation while keeping all of the guardrails that Parliament put in place firmly intact.
Lord Hunt of Wirral (Con)
My Lords, the instrument before us is, on the face of it, a technical one. As the Minister explained, it ensures that enforcement officers of the new Fair Work Agency inherit the same communications data powers, under the Investigatory Powers Act 2016, that officers of the Gangmasters and Labour Abuse Authority held before them. However, the creation of the Fair Work Agency is the moment at which this Committee confers covert investigatory powers on a body whose structure, resourcing and operating principles remain, to a troubling degree, undefined.
I turn first to what I regard as the most fundamental concern: the departure from the settled policy of targeted, sector-specific enforcement. The GLAA was created for a reason. It was designed to address the specific and acute vulnerabilities of workers in agriculture, food processing, shellfish gathering and related sectors—industries where the risk of exploitation and labour abuse was demonstrably high and where ordinary enforcement mechanisms were plainly insufficient.
The Fair Work Agency sweeps that away. It appears that it will have a broad mandate to inspect any business in any sector at any time. That is a significant departure; we were given no adequate explanation for it during Committee or Report on the Employment Rights Act 2025. On what evidential basis have the Government decided that the enforcement problems, which were previously confined to high-risk sectors, now require a body with universal reach? What assessment has been made of the risk that this broader mandate will dilute the quality and focus of enforcement, rather than improving it? The Minister just mentioned a framework agreement, but am I not right in saying that this Committee has not yet seen even a draft of it? Perhaps the Minister will clarify that aspect.
This matters acutely for small and medium-sized enterprises, which are already facing more than £600 million in costs flowing from the Employment Rights Act—costs that are, in large part, administrative in nature, such as in record-keeping, compliance processes and reporting obligations. These activities will now fall within the Fair Work Agency’s line of sight. These businesses, many of which are without dedicated human resources functions or legal support, will be exposed to an agency that is armed with powers of entry, powers to seize documents and electronic records, and now, through this instrument, powers to obtain communications data covertly. What guidance will be issued to ensure that enforcement action against small businesses is proportionate? What safeguards exist to distinguish a genuine, minor administrative error from deliberate wrongdoing? Will businesses that make honest mistakes face the prospect of document seizure, substantial financial penalties and the full weight of this agency’s investigatory apparatus?
Businesses have said that they want any action taken against them to be proportionate, and that the Fair Work Agency should function primarily as a compliance partner, not as a punitive instrument. The Minister has said that she shares that aspiration, and I invite her to say how that aspiration will be given legal and operational effect.
Baroness Lloyd of Effra (Lab)
I thank the noble Lord for his series of questions on this matter. To come back to its core, the statutory instrument has a strictly limited purpose to ensure that the same investigatory powers currently applying to the GLAA transfer smoothly to the new Fair Work Agency. The Fair Work Agency will enforce the legislation listed in Schedule 7—not all employment legislation. On day one, the Fair Work Agency will take the same remit and powers of current regulators, subject to existing and enhanced safeguards, which will continue to apply.
On the noble Lord’s question about going wider, as I mentioned, this applies only to serious crimes under the legislation that have a minimum 12-month sentence threshold. This is a very limited series of offences—the most serious that we encounter in the labour market today. He also asked when the framework agreement will be published. It will be published on 7 April alongside the statutory instrument.
The noble Lord questioned the culture of and approach to enforcement and recalled that we have previously discussed the interests of small businesses and micro-businesses and the culture of enforcement more generally. We have thought about how the Fair Work Agency will go about its work. The idea of a single enforcement body will make it easier for small employers to understand their obligations and get the right guidance early. The agency is focused only on taking firm action against the small minority of rogue employers who exploit workers, and the idea is to ensure fair competition for responsible businesses. That is the approach we are taking. This statutory instrument is about transferring those legal powers that are currently housed within one agency to another.
On resourcing and funding, the budget for the Fair Work Agency will be set out in the usual way through the department’s allocation processes. Given that the Fair Work Agency will have additional areas of remit under the Employment Rights Act, it will have a larger budget than its predecessor organisations combined. We will communicate that budget when the organisation is set up. On the question of the transfer of employees, all staff will transfer under the Civil Service equivalent of TUPE—that is the model that will be used.
I reinforce that the protections will remain in place. This is about ensuring that the powers for very serious crimes are transferred to the Fair Work Agency, so that it has the means to pursue those limited but serious offences under the full oversight of the Investigatory Powers Commissioner. This SI is essential to enable that smooth transition, and I commend it to the Committee.
International Women’s Day
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Baroness Lloyd of Effra
That this House takes note of International Women’s Day.
The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)
My Lords, it is a pleasure to open today’s International Women’s Day debate on behalf of the Government. As noble Lords will know, the theme of this year’s International Women’s Day is “Give to gain”. This day is about celebrating the power of solidarity and camaraderie; it is about adhering to the words proclaimed by Millicent Fawcett—the same words inscribed on her statue in Parliament Square just a stone’s throw away from here:
“Courage calls to courage everywhere”.
This day is about recognising that when women thrive, we all rise. I believe that is true of this place. Both Chambers are of very different composition to the ones I knew in the 1990s when I first started working in Westminster. Back then, around 10% of the seats in the other place were held by women; last year, that figure stood at roughly 40%. We have seen a similarly positive trend in this House: female membership has steadily risen from below 10% in the early 1990s to over 30% today. I am looking forward to hearing the maiden speeches today from my noble friends Lady Linforth, Lady MacLeod of Camusdarach, Lady Martin of Brockley, Lady Nargund and Lady Paul of Shepherd’s Bush. I am proud to serve in a Government where the positions of Chancellor, Home Secretary and Foreign Secretary are all occupied by brilliant women, as are the Secretaries of State for Wales, science and culture. Our representation has changed for the better.
Our economy has changed for the better, too. Top British companies are leading the way for gender equality in boardrooms. Women occupied over 43% of roles on FTSE 350 executive boards as of last year. Our society has also changed for the better. The UK ranks fourth in the global gender gap index. That is all cause for celebration and optimism, but noble Lords will know that there is still more to do.
That extends to the places where economic power lies today and the industries that are at the forefront of tomorrow’s economy. We have much more to do to further women’s rights and opportunities in the UK and around the world, which is why this Government are working to prioritise women’s health by working with the women’s health ambassador to deliver our 10-year health plan. At work, we are putting in stronger protections for pregnant women and new mothers and tackling maternity inequality. We are also improving the system of parental leave, and making flexible working more easily available through our plan to make work pay. Through the Employment Rights Act we are taking the first steps towards requiring employers to publish an action plan alongside their gender pay gap reporting. We are tackling violence against women and girls, with a focus on education and prevention, pursuing perpetrators and supporting victims through our landmark strategy.
I would like to take a moment to reflect on the achievements of Jill Saward as we mark 40 years since her harrowing attack in 1986. I pay tribute to a woman whose courage shifted the national conversation surrounding sexual violence. She transformed the horrific trauma she endured into a catalyst for systemic change. She became a pioneering voice, helping to dismantle the long-standing taboos around sexual violence that silenced countless victims, and she campaigned for essential reforms to our justice system that were so desperately required. We owe her, and the many who continue her vital work, a debt of profound gratitude, and our commitment is to continue to tackle violence against women and girls.
However, if noble Lords permit, I will use my remaining time to speak about some of the initiatives my ministerial portfolio covers: initiatives to strengthen the roles of women in the workplace, in our economy and in our society. I will start with digital inclusion and the tech sector. We know that the UK’s tech sector is a massive growth driver. We are one of only three countries in the world to have had a tech sector valued at over $1 trillion. But it is not working for all; not everyone can access its opportunities. Only 29% of UK tech employees are women.
One of the groups I work closely with in my role is the cyber security industry, which has a workforce of 143,000 people and only 17% are women. Worse still, every year we lose an estimated £2 billion to £3.5 billion in economic activity because women leave the tech sector or change jobs due to barriers that should not exist. We have our work cut out for us because, at the current pace, it will take 283 years before women make up an equal share of the tech workforce. We want to right this wrong, and our ambition is clear: we want to unlock the full potential of Britain’s tech sector. Why? Because diverse teams do not just create more equitable workplaces; they deliver better outcomes. Different perspectives drive breakthrough solutions and help technology serve all communities, not just some.
To deliver on our ambitions, we are backing initiatives such as Code First Girls and CAPSLOCK, which specialise in helping women to access cyber and tech roles. We also have the TechFirst programme, with £187 million of investment to strengthen our domestic tech skills pipeline. This is about recruiting and supporting high-potential individuals from across the UK, starting in schools through to university, then research and employment. At its core, TechFirst is about giving people access to brilliant tech jobs—the jobs of the future—with the programme acting as a significant driver to support women and girls.
We are keen to play our part with industry. This is not about government going it alone; it is about businesses stepping up, which is why I am glad that IBM took over from the Government on delivering the annual CyberFirst Girls Competition. Last year’s competition reached more than 10,000 girls between the ages of 12 and 13 across 500 secondary schools in the UK. It is a fantastic example of industry leading from the front.
We have set up the new Women in Tech Taskforce. Its mission is to dismantle barriers to education, training and career progression. It will deliver practical solutions for government and industry to implement together, shaping policy that levels the playing field, and it will help us to reverse those economic losses I mentioned a moment ago, which stem from women leaving the tech sector due to barriers that should not exist.
We are also taking action to fix the finance gap for women-led businesses. One of the ways we are doing this at DBT is through the Invest in Women Taskforce. This is about backing women-led businesses, ensuring they are front and centre of this Government’s growth mission. The Invest in Women Taskforce funding pool is the largest of any kind in the world, at an impressive £635 million of institutional capital, all grown since this Government came into office. This Government are putting our money where our mouths are, with £130 million invested by the British Business Bank.
This is not the only way we are supporting female entrepreneurship. The British Business Bank, which backs the taskforce, also runs a number of its own empowering initiatives. The bank’s £400 million Investor Pathways Capital programme is an example. It is reducing barriers to entry for new and emerging fund managers. We know that women are twice as likely to back women-led businesses than men, which is why 50% of this capital is ring-fenced for female fund managers. The bank’s diverse angel syndicate initiative also encourages a wide group of investors to back early-stage businesses. The figures from the programme’s pilot were impressive: 185 new angel investors were engaged, and 176 of them were female. This is a strong example of the British Business Bank channelling investment to women-led small businesses with big ambitions.
When those founders succeed, our economy and our country succeed, which is why the Government are shining a bright light on successful female founders at every possible opportunity. The Department for Business and Trade’s Venture Capital Unit runs an annual initiative, Wave, which does exactly that. It spotlights 10 innovative female-led businesses from across the UK and runs a programme of pitch days and workshops with them.
In sum, it is right that on this International Women’s Day we look back on what has been achieved, and that we acknowledge how attitudes have changed. In Britain we have the most gender-balanced Government in our nation’s history. But with that honour comes a responsibility; the onus is on us to drive further progress. I am looking forward to the debate that will follow. I have one final ask of this House: please help us champion the initiatives I have spoken about today. Help us inspire more women and girls to go as far in life as their talent and ambitions will take them. Let us give so all can gain.
Employment Rights Act 1996 (Application of Section 80B to Adoptions from Overseas) (Amendment) Regulations 2026
Baroness Lloyd of Effra Excerpts(3 weeks, 3 days ago)
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Baroness Lloyd of Effra
That the Grand Committee do consider the Employment Rights Act 1996 (Application of Section 80B to Adoptions from Overseas) (Amendment) Regulations 2026.