Superintelligent AI

Baroness Lloyd of Effra Excerpts

Thursday 29th January 2026 Lords Chamber

[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, I thank my noble friend Lord Hunt for initiating this important debate on an important topic, and all noble Lords from around the House for their contributions today. This Government believe that advanced AI has transformative potential for the UK: from scientific innovation and public service reform to economic growth, as many noble Lords have set out today. However, as we realise these benefits, we need to make sure that AI remains secure and controllable. New technologies bring with them novel risks, and we have heard today from many noble Lords the directions in which technology might take us.

As has been mentioned, the UK is committed to a context-based regulatory approach whereby most AI systems are regulated at the point of use and by our existing regulators, who are best placed to understand the risks and the context of AI deployment in their sectors. Regulators are already acting. The ICO has released guidance on AI and data protection, and last year Ofcom published its strategic approach to AI, which sets out how it is addressing AI-related risks. My noble friend asked about Ofcom’s expertise and resources. Ofcom has recruited expert online safety teams from various sectors, including regulation, tech platforms, law enforcement, civil society and academia, and is being resourced to step up and regulate in this area. The FCA has also announced a review into how advances in AI could transform financial services.

As my noble friend also mentioned, the Government are working proactively with regulators, through both the Digital Regulation Cooperation Forum and the Regulatory Innovation Office, to ensure that regulators have the capabilities to regulate what we see today and anticipate regulations that may be needed in the future, both in respect of AI and of other scientific and technological developments in other areas that are coming towards us. We heard many suggestions today on how we might regulate further. The Government are prepared to step up to the challenges of AI and take further action. We will keep your Lordships’ House updated on any proposals in this area. However, I am unable to speculate on any further legislation ahead of parliamentary announcements.

We have heard a lot of testament to the abilities and expertise of the AI Security Institute. Equally, as other Lords have mentioned—the noble Lord, Lord Tarassenko, brought precision to the definitions here—we cannot be sure how AI will develop and impact society over the next five, 10 or 20 years. We need to navigate this future based on evidence-based foresight to inform action with technical solutions and global co-ordination.

We should be very proud of our world-leading AI Security Institute: it is the centre of UK expertise, advancing our scientific understanding of the capabilities and the associated risks. Close collaboration with AI labs has ensured that the institute has been able to test more than 30 models to understand their potentially harmful capabilities, and we think this is the best way to proceed. It is having a real-world impact. The institute’s testing is making models safer, with findings being used by industry to strengthen AI model safeguards. It is carrying out foundational research to discover methods for building AI systems that are beneficial, reliable and aligned with human values.

One of the AISI’s priorities is tracking the development of AI capabilities that would contribute to AI’s ability to evade human control, which has been raised many times in the debate today. It supports research in this field through the alignment project, a funding consortium distributing £15 million to accelerate research projects. To ensure that the Government act on these insights, the institute works with the Home Office, NCSC and other national security organisations to share its evidence for the most serious risks posed by AI.

The noble Baronesses, Lady Foster and Lady Neville-Jones, spoke about the risks associated with AI cyber capabilities. We are closely monitoring those, in terms of both the risks posed and the solutions for combating the cyber risks that AI can contribute. We have developed the AI Cyber Security Code of Practice to help secure AI systems and the organisations that develop and deploy them. That is another example of the UK setting standards that can be followed by others—another point made by noble Lords today, when they spoke about how the UK can contribute to the safe development of AI. The institute will continue to evaluate and scan the horizon to ensure we focus our research on the most critical risks.

As has been pointed out, AI is being developed in many nations and will also have impacts across borders and across societies, so international collaboration is essential. The Deputy Prime Minister set out to the UN Security Council last autumn the United Kingdom’s commitment to using AI responsibly, safely, legally and ethically. We continue to work with international partners to achieve this.

The AI Security Institute is world leading, with global impact. Since December it has assumed the role of co-ordinator for the International Network for Advanced AI Measurement, Evaluation and Science. That brings together 10 countries, including Commonwealth countries such as Canada, Australia and Kenya, and the US, the EU and Singapore, to shape and advance the science of AI evaluations globally. That is important because boosting public trust in the technology is vital to AI adoption. It helps to unlock groundbreaking innovations, deliver new jobs and forge new opportunities for business innovators to scale up and succeed. The UK has shaped the passage of key international AI initiatives such as the Global Dialogue on AI Governance and the Independent International Scientific Panel on AI—both at the UN—and the framework convention on AI at the Council of Europe. The convention is the world’s first international agreement on AI and considers it with regard to the Council’s remit of human rights, democracy and the rule of law, seeking to establish a clear international baseline that grounds AI in our shared values.

I shall close by talking about the importance not only of the UK taking the risks of AI seriously, but of our conviction that it will be a driver of national renewal, and of our ambition to be a global leader in the development and deployment of AI. This is the way that will keep us safest of all. Our resilience and strategic advantage are based on our being competitive in an AI-enabled world. It matters who influences and builds the models, data and AI infrastructure.

That is why we are supporting a full plan, including our sovereign AI unit, which is investing over £500 million to help innovative UK start-ups expand and seed in the AI sector. It is why we are progressing the infrastructure level, including the announcement of five AI growth zones across the UK, accelerating the delivery of data centres. It is why we are expanding National Compute and why we are equipping all people—students and workers—with digital and AI skills. We want to benefit from AI’s transformative power, so we need to adopt it as well as manage its risks. That is why we have also committed to looking at the impact of AI on our workforce through the AI and future of work unit. We are working domestically and collaborating internationally to facilitate responsible innovation, ensuring that the UK stands to benefit from all that AI has to offer.

UK Start-up Companies

Baroness Lloyd of Effra Excerpts

Wednesday 28th January 2026 Lords Chamber

[Lord Londesborough (CB)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and declare my interests as an adviser and investor in start-ups.

[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 latest ONS figures highlight the continued resilience of UK entrepreneurship. One-year survival rates have also remained strong, holding at over 93% in recent years. Furthermore, the percentage of adults starting or running a new business in the UK in 2024 was 14%, as opposed to 12% in 2023, remaining above France, Germany and Italy. This underscores the ability of new British firms to establish themselves successfully.

[Lord Londesborough (CB)]

I thank the Minister for her response, but I think it is fair to say that key data on our start-ups is missing in action. Since the enterprise investment scheme was introduced 30 years ago, I have calculated that £40 billion has been invested in EIS start-ups, triggering £12 billion in tax credits. I declare an interest in that I am a beneficiary. And yet what has been the economic impact? What is a true success rate of these start-ups? How many permanent jobs have been created and sustained? What is their net contribution to GDP? And what is the return on investment of that £12 billion from the public purse? If the Minister is unable to answer these questions, can I suggest that her colleagues at the Department for Business and Trade knock heads with the ONS so that they can produce this data?

[Baroness Lloyd of Effra (Lab)]

The evidence from HMRC’s 2022 evaluation shows that 75% of enterprise investment scheme companies strongly agreed that finance led their company to grow. As the noble Lord is aware, in the Budget the Government introduced an entrepreneurship tax package to support innovative young companies, doubling the eligibility of the EIS. At the same time, the Treasury is running a call for evidence to gather evidence on how well existing support is working, including the EIS, and on options for further support. The questions that the noble Lord asked will be addressed, at least in part, by the consultation that the Treasury is launching now.

[Baroness Kingsmill (Lab)]

My Lords, I too have been very much involved in start ups, including chairing a fintech. At the moment, the real issue for start-ups is scalability. I wonder what the Government can do to assist companies and the brilliant entrepreneurs that we produce in this country in scaling up their businesses.

[Baroness Lloyd of Effra (Lab)]

My noble friend raises the equally important point that, as well as supporting start-ups, we need to support scale-ups. One initiative that the Government have taken is the entrepreneurship prospectus, which takes action on four important areas that create the ecosystem for companies not only to establish themselves but to thrive. That includes: on R&D, focusing public research firepower on priority sectors; changing the procurement rules and approach so that the Government are a better customer for innovative businesses, which is something that scale-ups often raise with us; the changes to tax reliefs, which I mentioned; and strengthening the ability of public finance institutions to invest at series B and beyond.

[Lord Popat (Con)]

My Lords, many SMEs and start-up businesses are facing a challenging time, not just because of high taxation but because they are heavily regulated as well. To open a bank account can take as much as three months, registering VAT takes time and a contract with a lawyer could be as much as 60 pages. Can the Minister give us an assurance that the Government will look into all this? We should genuinely be celebrating wealth creation and help our GDP.

[Baroness Lloyd of Effra (Lab)]

The UK has an extremely strong track record as a vibrant ecosystem for start-ups and scale-ups, and that is something the Government are committed to building on—hence, as I mentioned, the entrepreneurship package. Specifically on regulation, we are not sitting still on that either. We have announced, as part of our regulation action plan, a commitment to reduce the administrative burden on all businesses by 25%. We have already announced several specific measures to ease the regulatory burden for smaller companies. For example, we announced in October 2025 that we would exempt tens of thousands of companies from producing strategic and directors’ reports. We are looking carefully across all departments at how we can optimise regulation. In addition, through the Regulatory Innovation Office, we are looking at how to regulate new technologies that perhaps do not fit within the existing regulatory purview, such as drones or novel foods.

[Lord Fox (LD)]

My Lords, I am pleased to hear that the Government are going out and looking for evidence. I want to add another sector that has not really been mentioned here. From my meetings with businesses, there is a whole section of businesses—a large lump—with perhaps 100 employees, which are successful and are doing well, and are often family owned or privately owned, but they find it difficult to get the capital they need, not to turn themselves into unicorns but perhaps to double in size or get half the size again. Can the Minister take on board that sector? Can she discuss with colleagues how those firms can get access to the finance they need? That incremental growth would make a big difference to our economy.

[Baroness Lloyd of Effra (Lab)]

As noble Lords may know, we are supporting our public finance institutions. We are increasing the capitalisation of the British Business Bank, which can play a role in this area, complemented by the National Wealth Fund’s new mandate, which includes a focus on other sectors such as digital and technology. As the noble Lord is aware, we are also acting over the longer term, which may take a little longer, to increase the amount of capital that domestic pension funds can allocate to private assets, including through the Mansion House Accord and the Sterling 20 group, in order to continue to support businesses getting access to finance in the UK.

[Lord Bilimoria (CB)]

My Lords—

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[Lord Bilimoria (CB)]

My Lords, I am a member of the expert advisory council of the Government’s Help to Grow: Management scheme set up by Rishi Sunak when he was Chancellor, which this Government have happily continued. Some 10,000 businesses have graduated from this, but is the Minister aware that only businesses with five to 249 employees are eligible for the scheme? Micro-businesses, including start-ups, which make up 90% of SMEs in this country have fewer than five employees and so are not eligible for this programme. Will the Government consider expanding this very successful programme to include micro-businesses?

[Baroness Lloyd of Effra (Lab)]

I am happy to take away that question and consult with colleagues on it. The noble Lord is right that businesses of all sizes make up the huge vibrancy of our economy and we must think about the right intervention from government and the private sector to help them to grow.

[Lord Clarke of Nottingham (Con)]

My Lords, if the Government are as keen on entrepreneurship as the Minister keeps suggesting, why did the Chancellor in her last Budget reduce the tax relief for venture capital trusts, which I set up in my last Budget in 1997 precisely to encourage the kind of investment she is so enthusiastic about?

[Baroness Lloyd of Effra (Lab)]

I thank the noble Lord for his question. We expanded the eligibility for various schemes to support entrepreneurs and scale-up businesses such as the enterprise management incentives and the enterprise investment scheme. I will need to consult with Treasury colleagues specifically on venture capital trusts, because I believe that we increased the investment limits for venture capital trusts but the nature of his question suggests otherwise.

[Lord Hunt of Wirral (Con)]

My Lords, does the Minister share my concern that an increasing number of entrepreneurs are saying that Britain is becoming an increasingly unattractive place to grow a business? Given that AI start-ups, in particular, depend on access to powerful data centres for success, the principal barrier that she could address is that we have the highest electricity prices in Europe. Will she now set out a clear strategy to reduce electricity costs so that AI companies can realistically build scale and remain in Britain?

[Baroness Lloyd of Effra (Lab)]

Our approach to the AI opportunity is comprehensive. It includes the AI growth zones which are being announced and include full access to energy as part of the package as well as local skills packages of £5 million per area to ensure that local areas benefit from these AI growth zones.

TikTok: Bereaved British Parents

Baroness Lloyd of Effra Excerpts

Tuesday 27th January 2026 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)]

We are aware of the case brought in the United States. No parent should have to go through what these parents have. Our deepest sympathies are with those affected. We have commenced powers through the Online Safety Act to require information from services about a child’s online activity in the tragic event of their death. We have also established a data preservation process to ensure that services preserve relevant data. We are committed to making those powers work effectively.

[Baroness Berger (Lab)]

My Lords, I thank my noble friend for her reply. Ellen Roome is one of a number of bereaved British parents who are suing TikTok. Ellen had been fighting for four years to get access to her son Jools’s social media account after he died performing a TikTok challenge. Digital data that should be preserved as evidence in the critical early period following a child’s death is not being requested and is routinely being deleted or lost. Justice must prevail. Will the Government ensure that there is automatic digital data preservation for every one of these tragedies so that they can be fully investigated?

[Baroness Lloyd of Effra (Lab)]

The Government are aware of calls to make the data preservation process faster. These are new powers and we are actively monitoring the effectiveness of the current process, working closely with Ofcom to do this. We are carefully considering any means that could allow relevant data to be preserved in a timely manner to ensure investigations are well informed and families get the answers they need.

[Lord Clement-Jones (LD)]

My Lords, the litigation alleges that TikTok’s algorithm deliberately promoted harmful content to children. That is exactly what we originally thought the Online Safety Act was going to help protect our children from, but that appears to be wrong. Will the Government, given their statement of strategic priorities, insert a statutory definition of safety by design and require Ofcom specifically to address addictive algorithms and compulsive design features?

[Baroness Lloyd of Effra (Lab)]

The noble Lord will be aware of the Statement that the Technology Secretary made last week to initiate a short consultation looking at further measures that could be taken, which responds to some of the questions that underlie his question about the nature of social media use and actions that could be taken in response to parental and other requests to deal with it—for example, looking at breaks to stop excessive doomscrolling, or further enforcement of the law. That consultation will take place swiftly before the summer.

[Baroness Barran (Con)]

My Lords, the noble Baroness says—and I absolutely believe her—that she personally and the Government will do everything they can to address these issues. Is she aware that later today we will debate a group of amendments to the Crime and Policing Bill that would very simply close the gap and ensure that coroners and the police have access to the digital and social media data they need? Those amendments would put an end to the unimaginable pain that families are going through, waiting to find out how and why their children died.

[Baroness Lloyd of Effra (Lab)]

Yes, we are aware of those calls and those measures that have been put forward. We are working closely with Ofcom and the Chief Coroner’s office to understand how those would work. We are closely monitoring this and actively considering options to strengthen the process.

[Lord Russell of Liverpool (CB)]

Will the Minister please draw to the attention of her right honourable friend the Secretary of State the following facts about TikTok? In June 2025, TikTok announced that it would expand its investment and presence in the UK, proudly declaring:

“What underpins our continued growth is our deep commitment to safety”.


Two months later, in August, TikTok announced that it was going to fire almost all its content moderation team in the United Kingdom. One of those moderators said that, as part of their daily job, they were told to scrutinise 1,200 videos every working day. Does that give us confidence that TikTok is a company that can be trusted?

[Baroness Lloyd of Effra (Lab)]

All services operating in the United Kingdom must comply with the Online Safety Act. Ofcom is the regulator of online services and, when services fail to comply with the duties under the Act, it has enforcement powers to take action against them. We have made it very clear that Parliament has given those powers to Ofcom and the Government are backing Ofcom to use the measures in its remit to scrutinise the operation of services operating in the UK to provide the right environment for children and all users of social media here.

[Baroness Shah (Lab)]

My Lords, as the mother of a tech-savvy 16 year-old, access to social media is a topic of discussion in our household and among her friends. They do not believe an outright ban will work. Parents who have suffered incredible loss have also voiced differing views on how we keep children safe online, which is why I believe a consultation is the best way to proceed. Can the Minister tell us how the Government will make sure that all views are considered in the consultation?

[Baroness Lloyd of Effra (Lab)]

My noble friend is right to highlight the fact that we all share the objective of a safe online space, but one where children and others can benefit from the digital world and the digital economy. Navigating that and getting the right measures in place was the subject of some debate in this House last week, which showed exactly how defining these parameters and the way in which we proceed will take a short amount of time. On her question about how to ensure that we hear the voices of all, that is exactly what we intend to do during the course of this consultation, particularly the voice of young people.

[Baroness Stedman-Scott (Con)]

My Lords, bereaved parents in this case say that they repeatedly warned platforms about dangerous content but were ignored until their children so tragically died. What assurance can the Minister give that victims’ families are now being listened to directly by regulators, rather than having to resort to the courts to be heard?

[Baroness Lloyd of Effra (Lab)]

The noble Baroness makes a point about the effectiveness of the regime as it stands and future developments. As I mentioned, we are looking carefully at how the regime is working currently, at the timeliness of the preservation of data, and at the communication of those steps. As she also knows, further measures will come into force over the coming year or so. Ofcom and others are consulting on measures that will take those further requirements forward for categorised services.

[Lord Cryer (Lab)]

My Lords, the Government are being asked to introduce a legal compulsion to force big tech companies to preserve the relevant data. Why do we not just do it?

[Baroness Lloyd of Effra (Lab)]

We have put in place powers under the Data (Use and Access) Act, which established the data preservation process, to require Ofcom, when notified by a coroner, to issue a data preservation notice to the specified online service companies. Since coming into force on 30 September, Ofcom has issued at least 12 data preservation notices. As I mentioned, we are looking carefully at how this is working, at the speed at which this is taken forward and at what more needs to be done.

[Lord Sandhurst (Con)]

My Lords, further to the question from the noble Lord, Lord Russell, is the Minister confident that TikTok can be trusted when looking at the interests of children and young persons? Yes or no, please.

[Baroness Lloyd of Effra (Lab)]

We have set a regime. This House passed the Online Safety Act. It is a regime supervised by Ofcom. We have given Ofcom the resources it needs to supervise against the Online Safety Act. We have made it clear that we back the use of those powers and, as we have seen recently, the Government are prepared to make it clear that they stand behind Ofcom in taking action where that is seen to be fitting.

[Lord Bassam of Brighton (Lab)]

My Lords, the Minister will be aware that Australia has already instituted a ban. I welcome the consultation that was announced last week. Will we look at Australia’s experience and try to interpret the experience of other jurisdictions in carrying out the consultation?

[Baroness Lloyd of Effra (Lab)]

My noble friend is right that there are other practices in other jurisdictions. We should absolutely learn from their experience of taking measures to protect children online and how they are enacted, and look at the effect on both the social media space and on children.

Superintelligent AI

Baroness Lloyd of Effra Excerpts

Monday 26th January 2026 Lords Chamber

[Lord Hunt of Kings Heath]

To ask His Majesty’s Government what plans they have to regulate the development of superintelligent AI.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)]

AI’s superintelligence is the subject of ongoing debate regarding its definition and whether it is achievable. Advanced transformative AI presents both significant opportunities, such as improvements in healthcare and climate action, and risks. As frontier AI evolves, the AI Security Institute helps the Government assess and identify potential emerging risks, which would include pathways towards any kind of superintelligence. The Government will remain vigilant and prepare for new AI risks, including rapid advancements that could affect society and national security. AI regulated by existing expert regulators will be informed by the AISI findings.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am grateful to my noble friend for that considered Answer. Clearly, AI has great potential; the UK is third in the global league of AI investment. I understand the Government’s response, which is essentially a nuanced approach to encourage both proper regulation and investment.

However, superintelligent AI undoubtedly does present risks. The Minister will know that the director-general of MI5 has warned of the

“potential future risks from non-human, autonomous AI systems which may evade human oversight and control”.

Meanwhile, the UK’s AI Security Institute has warned:

“In a worst-case scenario, this … could lead to catastrophic, irreversible loss of control over advanced Al systems”.


The problem is that the companies developing superintelligence do not know the outcome and there are currently no barriers to the development. I urge the Government to take this really seriously and to start talking to other countries about putting some safety controls in.

[Baroness Lloyd of Effra (Lab)]

My noble friend is right to mention the research of the AI Security Institute, which is advice the Government listen to and take very seriously. AI is a general-purpose technology with a wide range of applications, which is why the UK believes that the vast majority of AI should be regulated at the point of use. My noble friend is also right that collaboration with other countries is critical, and the UK’s approach is to engage with many other countries, and through the AI Security Institute with developers so that it has good insight into what is happening in development today.

[Lord Clement-Jones (LD)]

My Lords—

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[Lord Clement-Jones (LD)]

My Lords, I declare an interest as a consultant to DLA Piper on AI regulation and policy. In their manifesto, the Government promised

“binding regulation on … companies developing the most powerful AI models”,

yet, 18 months later, even in light of the harmful activities of stand-alone AI bots, we have seen neither the promised consultation nor any draft legislation. How can the Government credibly claim to be taking superintelligence seriously when they cannot get round even to publishing a consultation, let alone legislating?

[Baroness Lloyd of Effra (Lab)]

As I mentioned earlier, most AI systems are regulated by our existing expert regulators, and they are already acting. The ICO has released guidance on AI and data protection and the MHRA is taking action to allow a sandbox for AI as a medical device product. We are working with regulators to boost their capabilities as part of the AI opportunities action plan, and where we need to take action—for example, as we have under the Online Safety Act—we will do so. We do not speculate on legislation ahead of future parliamentary Sessions, but we will keep noble Lords updated should and when we bring forward a consultation ahead of any potential legislation.

[Baroness Harding of Winscombe (Con)]

My Lords, in 1982, the then Government commissioned a philosopher, Dame Mary Warnock, to explore the moral and ethical frameworks around human embryology and fertilisation, long before many of the developments were really possible. I worry that the AI Security Institute is just trying to work out what it does, rather than what it should do. Will the Government consider a similar commission to establish the ethical frameworks for superintelligence?

[Baroness Lloyd of Effra (Lab)]

The AI Security Institute looks at the science and the implications of AI, and collaborates with many other research institutes to examine some of the implications for our society and economy. That approach is bearing great fruit. The institute publishes findings so that we can all take account of them.

[Lord St John of Bletso (CB)]

Can the Minister elaborate on what economic and labour market risks are associated with superintelligent AI, as distinct from generative AI?

[Baroness Lloyd of Effra (Lab)]

As I mentioned at the start, there is a lot of debate about the pathway that AI development will take and the pace at which it is developing. The AI Security Institute has reported a sharp rise in AI capabilities over the past 18 months, with continued growth almost certain, and it is looking at the implications of this. For example, one of its research focuses is tracking the development of AI capabilities that would test the limits of human control, which is one of the most pertinent questions for anybody thinking about the implications of superintelligence.

[Viscount Camrose (Con)]

My Lords, I want to build on the very important point raised by the noble Lord, Lord Hunt. Given that AI research and development can be conducted, in effect, anywhere, regulation of the development of superintelligent AI is going to have to be global. Does the Minister feel that the UK is genuinely taking full advantage of our considerable convening power in this space to drive forward the global AI safety agenda? Further, might there be grounds for concern that our convening power may be diminished over time by the emerging political uncertainty that came to the fore over the weekend?

[Baroness Lloyd of Effra (Lab)]

The Government have forged many extremely successful relationships; as evidenced, for example, by the number of trade deals secured over the past 18 months or so. These relationships with the EU, the US, India, France and many other countries include discussions on AI. In addition, the UK is the co-ordinator on related questions for the International Network for Advanced AI Measurement, Evaluation and Science, which aims to shape and advance the science of AI evaluations globally. Our engagement is on all levels, and specifically on the technical level. The noble Viscount makes an extremely important point. This is an effort of global development, so it is important that we engage with developers globally and with other countries.

[Lord Browne of Ladyton (Lab)]

My Lords—

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[Lord Browne of Ladyton (Lab)]

My Lords, I am and always have been a faithful. With tighter regulation in the future confidently anticipated, is it not often the case that its absence in the present can impede innovation rather than foster it? Given that many of those responsible for the development of AI—and, in some cases, the development of AI superintelligence—have repeatedly requested tighter controls on their activities, can my noble friend the Minister assure your Lordships’ House that the existing regulatory structures are adequate? Can she describe the mechanisms through which their salience and strength are kept under constant review?

[Baroness Lloyd of Effra (Lab)]

My noble friend makes a very good point: our regulators need to be equipped and to have the capabilities, capacity and expertise to regulate a fast-advancing technology. We have put in place many actions and convening powers as part of the AI action plan, to make sure that our regulators have that capacity and capability. Through the AI Security Institute, we are making sure that they have the information they need to regulate. Many departments are thinking about this in concert with their regulators, to ensure that we are taking advantage of the opportunities and preparing for the risks that AI will undoubtedly bring.

Social Media: Non-consensual Sexual Deepfakes

Baroness Lloyd of Effra Excerpts

Wednesday 14th January 2026 Lords Chamber

[Lord Clement-Jones (LD)]

My Lords, we on the Liberal Democrat Benches welcome the Secretary of State’s Statement, as well as her commitment to bring the new offence of creating or requesting non-consensual intimate images into force and to make it a priority offence. However, why has it taken this specific crisis with Grok and X to spur such urgency? The Government have had the power for months to commence this offence, so why have they waited until women and children were victimised on an industrial scale?

My Commons colleagues have called for the National Crime Agency to launch an urgent criminal investigation into X for facilitating the creation and distribution of this vile and abusive deepfake imagery. The Secretary of State is right to call X’s decision to put the creation of these images behind a paywall insulting; indeed, it is the monetisation of abuse. We welcome Ofcom’s formal investigation into sexualised imagery generated by Grok and shared on X. However, will the Minister confirm that individuals creating and sharing this content will also face criminal investigation by the police? Does the Minister not find it strange that the Prime Minister needs to be reassured that X, which is used by many parliamentarians and government departments, will comply with UK law?

While we welcome the move to criminalise nudification apps in the Crime and Policing Bill, we are still waiting for the substantive AI Bill promised in the manifesto. The Grok incident proves that voluntary agreements are not enough. I had to take a slightly deep breath when I listened to what the noble Viscount, Lord Camrose, had to say. Who knew that the Conservative Party was in favour of AI regulation? Will the Government commit to a comprehensive, risk-based regulatory framework, with mandatory safety testing, for high-risk models before they are released to the public, of the kind that we have been calling for on these Benches for some time? We need risk-proportionate, mandatory standards, not voluntary commitments that can be abandoned overnight.

Will the Government mandate the adoption of hashtagging technology that would make the removal of non-consensual images possible, as proposed by the noble Baroness, Lady Owen of Alderley Edge, in Committee on the Crime and Policing Bill—I am pleased to see that the noble Lord, Lord Hanson, is in his place—and as advocated by StopNCII.org?

The Secretary of State mentioned her commitment to the safety of children, yet she has previously resisted our calls to raise the digital age of consent to 16, in line with European standards. If the Government truly want to stop companies profiteering from children’s attention and data, why will they not adopt this evidence-based intervention?

To be absolutely clear, the creation and distribution of non-consensual intimate images has nothing whatever to do with free speech. These are serious criminal offences. There is no free speech right to sexually abuse women and children, whether offline or online. Any attempt to frame this as an issue of freedom of expression is a cynical distortion designed to shield platforms from their legal responsibilities.

Does the Minister have full confidence that Ofcom has the resources and resolve to take on these global tech giants, especially now that it is beginning to ramp up the use of its investigation and enforcement powers? Will the Government ensure that Ofcom uses the full range of enforcement powers available to it? If X continues to refuse compliance, will Ofcom deploy the business disruption measures under Part 7, Chapter 6 of the Online Safety Act? Will it seek service restriction orders under Sections 144 and 145 to require payment service providers and advertisers to withdraw their services from the non-compliant platform? The public expect swift and decisive action, not a drawn-out investigation while the abuse continues. Ofcom must use every tool Parliament has given it.

Finally, if the Government believe that X is a platform facilitating illegal content at scale, why do they continue to prioritise it for official communications? Is it not time for the Government to lead by example and reduce their dependence on a platform that seems ideologically opposed to the values of decency and even perhaps the UK rule of law, especially now that we know that the Government have withdrawn their claim that 10.8 million families use X as their main news source?

AI technologies are developing at an exponential rate. Clarity on regulation is needed urgently by developers, adopters and, most importantly, the women and children who deserve protection. The tech sector can be a force for enormous good, but only when it operates within comprehensive, risk-proportionate regulatory frameworks that put safety first. We on these Benches will support robust action to ensure that that happens.

[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 both noble Lords for their contributions to the debate. We all agree that the circulation of these vile, non-consensual deepfakes has been shocking. Sexually manipulating images of women and children is despicable and abhorrent. The law is clear: sharing or threatening to share a deepfake intimate image without consent, including images of people in their underwear, is a criminal offence. To the noble Lord’s point, individuals who share non-consensual sexual deepfakes should expect to face the full extent of the law. In addition, under the Online Safety Act, services have duties to prevent and swiftly remove the content. If someone has had non-consensual intimate images of themselves created or shared, they should report it to the police, as these are serious criminal offences.

I turn to some of the points that have been raised so far. The Government have been very clear on their approach in terms of both the AI action plan and the legislation that we have brought forward. We have introduced a range of new AI-related measures in this Session to tackle illegal activity; we have introduced a new criminal offence to make it illegal to create or alter an AI model to create CSAM; we are banning nudification apps; and we are introducing a new legal defence to make it possible for selected experts to safely and securely test models for CSAM and non-consensual intimate images and extreme pornography vulnerabilities.

AI is a general-purpose technology with a wide range of applications, which is why we think that the vast majority of AI systems should be regulated at the point of use. In response to the AI action plan, the Government are committed to working with regulators to boost their capabilities. We will legislate where needed and where we see evidence of the gaps. Our track record so far has shown that that is what we do, but we will not speculate, as ever, on legislation ahead of future parliamentary Sessions.

I come to the question of Ofcom enforcement action. On Ofcom’s investigation process, the Secretary of State was clear that she expects an update from Ofcom on next steps as soon as possible and expects Ofcom to use the full legal powers that Parliament has given it to investigate and take the action that is needed. If companies are found to have broken the law, Parliament has given Ofcom significant enforcement measures. These include the power to issue fines of up to 10% of a company’s qualifying worldwide revenue and, in the most serious cases, Ofcom can apply for a court order to impose serious business disruption measures. These are all tools at Ofcom’s disposal as it takes forward its investigations. On the question of whether Ofcom has the resources to investigate online safety, as I think I have mentioned in the House before, Ofcom has been given additional resources year on year to undertake its duties in respect of enforcing the Online Safety Act: that is, I think, £92 million, which is an uplift on previous years.

I come to the question of the Government’s participation in news channels and on X. We will keep our participation under review. We do not believe that withdrawing would solve the problems that we have seen. People get their news from sources such as X and it is important that they hear from a Government committed to protecting women and girls. It is important that they hear what we are doing and hear when we call out vile actions such as these. We think it is extremely important to continue to take action and continue to back Ofcom in the actions that it is taking in respect of this investigation, and in fact all of its investigations under the Online Safety Act.

The noble Lord asked whether it should be mandatory for AI developers to test whether their models can produce illegal material. Enabling AI developers to test for vulnerabilities in their models is essential for improving safeguards and ensuring that they are robust and future-proofed. At present, such testing is voluntary, but we have been clear that no option is off the table when it comes to protecting UK users, and we will act where evidence suggests that further action can be effective or necessary. We are keeping many of the areas that have been raised today under review and we are seeking further evidence. We are looking at what is happening in other jurisdictions and at what is happening here and we will continue to take action.

I also reflect on the point that the noble Lord made that the issues around enforcing illegal activity are nothing to do with free speech. These are entirely separate issues and it is incredibly important to note that this is not about restricting free speech, but about upholding the law and ensuring that the standards that we expect offline are held online. Many tech companies are acting responsibly and making strong endeavours to comply with the Online Safety Act, and we welcome their engagement on that. We need to make sure that our legislation and our enforcement is kept up to date with the great strides in technology that are happening. This means that, in some cases, we will be looking at the real-life impact and taking measures where new issues arise. That is the track record that we have shown and that is what we will continue to do.

[Baroness Thornton (Lab)]

My Lords, from any reasonable reading of the Online Safety Act, X either failed completely to carry out a risk assessment in relation to the potential of its Grok AI tool to create harmful content or, if it did so, it did it in such a totally incompetent way that it might as well not have bothered.

I think that this Government are doing exactly the right thing and that we have given Ofcom the powers. I would like to know as soon as possible about Ofcom— well, that would be good but, in parliamentary terms, it can be rather a stretch. But we do need to have a deadline for when we are going to hear from Ofcom on how quickly it is going to do this.

Nobody has referred yet to the victims of this activity. What help and support can we give to those who are being attacked in this way? What advice is being given to them and by whom, so that they can be effectively supported when these devastating images are created?

[Baroness Lloyd of Effra (Lab)]

My noble friend is right to raise the extremely important point about victim support and the impact that this has on people. We have seen testimonies and reports of how devastating, degrading and humiliating this experience can be. The Revenge Porn Helpline is doing fantastic work in providing specialist support and help with getting images removed from the internet, and I commend it for that activity.

On the question on the investigation process, the Secretary of State has been clear that she expects an update from Ofcom on next steps as soon as possible and that she expects Ofcom to use its full legal powers. We hope that that will be clear as soon as possible.

[Baroness Owen of Alderley Edge (Con)]

My Lords, I declare an interest as I am receiving pro bono legal advice on NCII from Mishcon de Reya. I am delighted that the Government are finally enforcing the law that noble Lords in this House pushed so strongly for in the passage of the data Bill, criminalising the non-consensual creation and requesting of intimate images. However, I cannot help but feel frustrated that, along with survivors, I have been asking the Government to enforce this law since it achieved Royal Assent last June. I hope it is now clear to the Government that we cannot afford any similar delays. With this in mind, will the Minister commit to looking again at my amendments to the Crime and Policing Bill that just last month the Government would not accept, which would implement a 48-hour time limit for the takedown of NCII material and a hash registry? Will she also join me in thanking the survivors and campaigners, who have fought for so long for this law, for their bravery and perseverance?

[Baroness Lloyd of Effra (Lab)]

I thank the noble Baroness for her remarks, and for her expertise and input over the course of many years in this area. On the take-down time, we are looking at the experience in other jurisdictions, as I mentioned. We are also looking at the experience of the timelines that are implemented in this country; that is something that Ofcom will look at. We will look at both the scope and the speed of both those jurisdictions. As I think noble Lords have seen, we will look at measures, and if we believe that they are effective and speak to the harms that we are seeing, we will take action.

[Baroness Kidron (CB)]

My Lords, I was in the other place when the Secretary of State made her Statement. I commend her for the strength of her words, but we are beyond words now. We are living in a country where any woman or child can be stripped to a bikini and turned into abuse material, as the price and entry point of being online. I do not accept the Government’s defence. There are many ways to communicate with the electorate, and to choose a company that monetises the humiliation and degradation of women and girls as part of its business proposition is to demonstrate that this is business as usual. It is not action for change.

I also disagree very strongly with the Minister: it has not been shocking. We have had the amendments that the noble Baroness referred to—most of those came from Members of this House, including the AI CSAM amendment that she referred to. In the last few weeks, the Government have pushed back on the amendments to the Crime and Policing Bill and, before that, to the data Bill. We have amendments on these issues. We foresaw it and, to be honest, we foresaw it in the Online Safety Act, so even on the other side this is not a shock.

I ask the Minister now to commit to placing the violence against women and girls guidance on a statutory footing, accepting amendments on chatbots and LLM risk assessments, and making a move with Ofcom to say that companies are not required only to do a risk assessment; they must, on a mandatory basis, mitigate those very risks that they find. We must not legitimise a platform which sows division, degrades women and sexually humiliates children.

[Baroness Lloyd of Effra (Lab)]

I thank the noble Baroness for her points and for her expertise that she brings to the House. I should have mentioned that I commend all those who have been speaking up from a position of experience. It is a very difficult thing to do, and it brings a unique perspective into the debate.

I spoke before about the Government withdrawing from using these platforms; we do not think that would be effective. We understand why people feel strongly about it. It is something that we keep under review.

The noble Baroness raised a number of other important issues. We are monitoring how Ofcom’s code on violence against women is being implemented. We think it is very important. I will discuss the many other areas she raised with my colleague who is taking that Bill through and, indeed, with the noble Baroness outside the House if that would be of interest.

[Lord Pack (LD)]

My Lords, last week the Government stated in this House that 10.8 million families use X as their main news source, which obviously would be many more people in total, but Ofcom’s data shows that only 3% cite X as their primary news source, which is under 2 million people—such a small number, in fact, that it is smaller than the number of people who believe that the moon landings were faked. Is it not time for the Government to rethink their approach to X, and, in particular, to rethink the Home Office’s published social media policy, which positively prioritises and encourages people to use X? Is it not time to start discouraging rather than continuing to encourage it?

[Baroness Lloyd of Effra (Lab)]

I have responded to this question before. I understand why people feel strongly about it. As I mentioned, the Government keep participation under review, but it is important that we can communicate with people wherever they get their news from. We have things to say about our violence against women and girls strategy, about what is acceptable in terms of social media, and on many other topics. It is important that we reach all people.

[Baroness Bennett of Manor Castle (GP)]

The US Under-Secretary of State for Public Diplomacy, Sarah B Rogers, an appointee of President Trump, said in an interview that was broadcast on GB News in the early hours of this morning that if the UK Government were to ban X, nothing was off the table, in what were clearly threatening remarks. She said that the political valence of the British Government is antagonistic to that of X. Given what we are talking about, one would really hope so. Will the Minister confirm that the British Government will act in the interests of the well-being of the British public and the country, stand up to such threats to democracy and not allow themselves to be bullied by the Trump Administration?

[Baroness Lloyd of Effra (Lab)]

The Government’s motivation is to take action to protect users in the United Kingdom and to support Ofcom in implementing UK law. That is what we have made very clear. We have made it very clear that Ofcom has our full backing in implementing compliance with the Online Safety Act and that we have given Ofcom tools that it can use, and the Secretary of State and others have made it clear that it has our support in using those tools. I hope that clarifies our motivations in these areas.

[Lord Wigley (PC)]

My Lords, the Minister will have gathered that all parts of this House feel very strongly indeed on this matter. It is quite outrageous that people’s bodies should be used in that way. I pick up one point that was mentioned on the Front Bench: surely, in extremis, there should be custodial sentences available.

[Baroness Lloyd of Effra (Lab)]

These are serious offences and the noble Lord is right that there is consensus on this. The decisions on prosecution and sentencing are for the police and courts. They should know that, as we have said, they have our support in taking that action.

[Baroness Keeley (Lab)]

My Lords, I welcome the Government’s announcement that they are bringing legislation into force this week to tackle this issue, and I welcome the news that Ofcom has launched a formal investigation to determine whether X has complied with its duties under the Online Safety Act. Ofcom should act urgently on this. I also support the Government’s intention to act on gaps identified in our online safety legislation, such as the fact that not all chatbots are covered.

I commend my noble friend Lady Owen of Alderley Edge for her work on banning deepfakes through amendments to the Data (Use and Access) Bill, and her excellent continuing work on this issue. There is an issue about the lack of transparency in how chatbots such as Grok are trained. As I understand it, if an image or multimodal model can generate non-consensual sexual imagery or deepfake pornography, it is certain that the model was trained on large, uncurated web scrapes where such material is common. Does my noble friend the Minister agree that this gives new impetus to the Government tackling the issue of transparency in the training of AI models, which is a matter we are looking at on the Communications and Digital Select Committee in terms of the transparency needed to deal with issues of AI copyright? This is a new and very pressing part of that issue.

[Baroness Lloyd of Effra (Lab)]

My noble friend raises good questions about training and testing. As she will also know, we are bringing forward measures in the Crime and Policing Bill that will allow testing in certain narrow circumstances, so that developers can make sure that the models they bring forward are not able to disseminate these kinds of awful images or CSAM. These are very important things and we are working very carefully with others to find the right regime for these models.

[The Lord Bishop of Gloucester]

My Lords, I welcome moves by the Government on this issue. I came off X last September and there is wider debate to be had about that site. Given that we know that the use of AI tools to harm women will only accelerate—recent research has found thousands of nudification apps available—I repeat my question from earlier this week: what more will the Government do to create a robust framework so that AI will be used responsibly in the whole landscape of misogyny and abuse?

In relation to Ofcom, I heard what the Minister said about increased funding year on year, but why therefore does it seem that Ofcom does not have teeth?

[Baroness Lloyd of Effra (Lab)]

I thank the right reverend Prelate for her comments. In terms of Ofcom’s enforcement powers, it has imposed four financial penalties under the Online Safety Act, including of over £1 million. From the Government’s point of view, we are clear that it should be confident that it has our backing to use the powers that Parliament gave it, and we are resourcing it with the additional funding that we have provided. We believe that that is sufficient and we will see from its updates on its online safety activities exactly what it is doing, and that is part of its accountability to Parliament and the Government.

In terms of other things that we are taking forward, noble Lords will know that we are legislating in the Crime and Policing Bill to criminalise nudification tools. That offence will target tools that are specifically designed to generate non-consensual intimate images and make it illegal for companies to supply those tools.

[Baroness Shawcross-Wolfson (Con)]

I was very glad to hear the Minister say that she believes in upholding offline standards online, and I hope the Government will consider the amendments from the noble Baroness, Lady Bertin, to the Crime and Policing Bill, and try to regulate online pornography as they do offline pornography. Can the Minister clarify whether the Government’s very welcome ban on nudification apps is going to apply to all apps with this capability, or only to single-purpose apps? There have been some worrying reports today that only single-purpose apps will be covered, and it is very easy to see how developers could add secondary functions to circumvent the law.

[Baroness Lloyd of Effra (Lab)]

The proposed offence will target tools which are specifically designed to generate non-consensual intimate images. General purpose AI tools which are not designed solely or principally to generate non-consensual images will not be included; this is for those that are designed specifically for that purpose.

[Viscount Stansgate (Lab)]

My Lords, I hope the whole House welcomes the Secretary of State’s Statement. Can my noble friend say whether it is thought that the social media platform X understands the revulsion caused by its AI Grok tool? I ask this question of my noble friend because the reported comments of the founder of X certainly suggest that he does not, and some aspects of the initial reaction by the company, such as saying it is acceptable as long as it is paid for, suggest that that it simply has no idea about the strength of the public reaction to this.

[Baroness Lloyd of Effra (Lab)]

I cannot speak for others but, from our perspective, it is clear under the Online Safety Act what illegal content is, and what the child safety duties are. Operating in the United Kingdom means abiding by those; it means doing the risk assessments, taking swift action against priority offences, and abiding by all of the regime in place here in the UK.

[The Earl of Effingham (Con)]

My Lords, this is all happening on social media, so does the Minister agree with the largest union representing teachers in the UK on banning social media for under-16s?

[Baroness Lloyd of Effra (Lab)]

There are strong views about access to social media for under-16s, and we understand that it is an area of concern for many, especially parents. We are keeping evidence on the impact of social media on children under review. While a ban is not our current policy, we are closely monitoring what is happening in Australia and looking carefully at the evidence. We have already taken some of the boldest steps to protect children with the Online Safety Act, and we are listening to views, for example, from the NSPCC and others. These include concerns about setting age limits which might mean that people are unprepared for the digital world, which is also a responsibility in terms of media literacy and ensuring that people can operate safely and securely in this new digital world.

Employment Rights Bill

Baroness Lloyd of Effra Excerpts

Consideration of Commons amendments and / or reasons
Tuesday 16th December 2025 Lords Chamber

Moved by

[Baroness Lloyd of Effra]

That this House do not insist on its Amendments 120N and 120P to 120S, to which the Commons have disagreed for their Reason 120T.

120T: Because it is appropriate to remove the limit on compensatory awards imposed by section 124 of the Employment Rights Act 1996.

[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, in moving this Motion, I will also speak to Motion A1. Throughout the passage of this Bill, which arrived in your Lordships’ House nine months ago yesterday, we have scrutinised, deliberated and debated all areas. Once again, I thank noble Lords for fulfilling their scrutiny role and, in the course of doing so, providing their invaluable insight.

However, we are now in round 4 of ping-pong on a Bill that the Government have a clear electoral mandate to deliver. We cannot be accused of attempting to push the Bill through without listening to the concerns raised by noble Lords. We are immensely grateful for the more than 60 occasions on which noble Lords have engaged with us, offering rigorous scrutiny and thoughtful challenge. It is because of this valuable feedback that the Government have been able to act and make changes where appropriate, including through technical amendments in Committee and on Report and the publication of an implementation road map outlining what the Government will consult on, when, and at what point new rights are expected to go live.

The Government are pleased to have found commonality in the three previous rounds of ping-pong on 11 of the 12 issues the House asked the Government to look at again. The contributions of noble Lords from across the House have helped bring forward solutions on a range of specific issues, from heritage railways to paid time off for special constables. On a number of other issues, such as the right to be accompanied, the Government have made non-legislative commitments which noble Lords have recognised as important progress. Most recently, during ping-pong, the Government brought forward amendments to the Bill on zero-hours contracts, seasonal work, trade union ballot thresholds and trade union political funds, which will help to ensure that stakeholders’ views and insights are represented in the final policy outcomes as we shift into the implementation phase for this Bill.

On the final issue of unfair dismissal, in the face of successive Lords votes against day-one rights to protection from unfair dismissal, itself a manifesto commitment, the Government took the extraordinary step of convening a series of constructive conversations between business representative organisations and trade unions, which reached a workable agreement on the unfair dismissal provisions. Yesterday, those representatives—from the British Chambers of Commerce, the Chartered Institute of Personnel and Development, the Recruitment and Employment Confederation, Small Business Britain, the Federation of Small Businesses, and the Confederation of British Industry—wrote to the Secretary of State for Business and Trade, stating that the outcome of the dialogue

“represented a significant step forward which will have a positive impact on growth and opportunities”.

--- Later in debate ---

[Lord Fox (LD)]

My Lords, this time last week I said that much had happened in the preceding interval. Today, the opposite is true. We are now down to one issue, but the arguments on that issue remain as they were last week. For that reason, unlike last week, this speech will be short.

There remain concerns about the removal of the cap on compensation, as we have heard. As he did last week, the noble Lord, Lord Sharpe, has taken those concerns and amplified them, to the seeming exclusion of the wider strategic position of what we are discussing. I understand the motives, and those motives became ever clearer just now. If the noble Lord would like to have a face-off on the water industry, I would be very happy to discuss with him the hundreds of thousands of tonnes of sewage that went into the rivers under the Conservative Government and the compensation terms that he very helpfully enumerated, which happened on his watch. However, this is not the arena for that argument, and I will pass without comment. My critique of the noble Lord’s amendment to the Motion is unchanged. We believe there are better ways of dealing with the cap than derailing the package that got the key concession with which we are all very pleased.

As set out last week, reiterated in the Minister’s letter and by the Minister just now, the Government will publish an enactment impact assessment for the Bill. They will do so prior to commencement regulations which would put in place the dismissal package. That was what we on these Benches were asking for and we were pleased to receive that assurance. Further, the impact assessment will be publicly available, and I was pleased to hear the Minister say that we will be engaging the community of business in the process of developing that impact assessment.

Many UK business associations and organisations share the feeling that there is nothing to be gained from the opposition amendment today. They are asking the opposite. As the Minister set out, six of the major organisations have sent a letter. It is a longish letter, as the noble Lord, Lord Sharpe, demonstrated by selectively picking elements out of it. But as the noble Lord, Lord Pannick, pointed out, the conclusion is clear and actually unambiguous, in saying,

“we believe that the best way forward is to keep working with the government and trade unions to find balanced solutions through secondary legislation. To avoid losing the 6 months qualifying period, we therefore believe that now is the time for Parliament to pass the Bill”.

I said that last week, and it is truer this week.

I also pointed out last week that, as the business organisations said, the key to enacting the Bill will be through secondary legislation. If His Majesty’s loyal Opposition care about how the Bill is brought into life, it is on those statutory instruments that they should focus their attention. Their critical actions must extend to include the possibility of fatal Motions to vote down secondary legislation and keep the Government focused on the needs of British business. That is the real arena that we should be working in.

If the amendment from the noble Lord, Lord Sharpe, is put to a vote and he seeks to extend ping-pong to yet another round, that will clearly be against the advice of the business groups which have been cited. I urge your Lordships to heed the advice of those organisations, and the advice of the noble Lords that we have heard opposite, and pass the Bill now.

[Baroness Lloyd of Effra (Lab)]

My Lords, I again thank your Lordships’ House for its attentive scrutiny throughout the passage of the Bill. There can be no doubt, as the noble Lord, Lord Vaux, mentioned, that this House has discharged its duties as a revising Chamber. Your Lordships’ House asked the Government to look again, and we have worked collaboratively with noble Lords to reach this agreement. I thank the noble Lords, Lord Fox, Lord Pannick and Lord Vaux, for their speeches in favour of the compromise proposed by the Government.

I turn to a number of the issues raised, in particular by the noble Lord, Lord Sharpe. I remind noble Lords that negotiations are successful only where there is compromise, as was so eloquently put in the previous debate by my noble friend Lord Barber of Ainsdale, the former chair of ACAS. The Government and worker representatives moved considerably during negotiations to agree to retaining a six-month qualifying period. Without similar compromise from business representatives on the removal, this deal would have been one-sided and undeliverable.

On the question of the impact of the cap, I do not think I can do better than the noble Lord, Lord Pannick, who said last week that

“the concerns that have been expressed about the impact of the removal of the cap are perhaps … exaggerated”.—[Official Report, 10/12/25; col. 276.]

Just now, he mentioned that he does not believe it will lead to the chaos that the noble Lord outlined earlier. It is not our view, but, in any case, as I mentioned, we will publish the enactment impact assessment as soon as the Bill achieves Royal Assent. It will be public and transparent, and will include an assessment of the impact of removing the compensation cap.

I remind noble Lords of our commitment to convene meetings with shareholders so that those from the City, law practitioners and others can feed into that. Those findings will be taken into account by the dispute resolution task force that we are setting up—it will have all that information to hand. We are obviously very keen to improve the functioning of the dispute resolution system. We inherited something that was not in a good state. We are providing ACAS with over £65 million in resource funding, which is a significant increase. We are working actively to make this a system that works extremely well.

I hope that this afternoon will mark the end of the Bill’s journey through Parliament. I reiterate the Government’s commitment, mentioned by other noble Lords who spoke today, to continue talking to and genuinely engaging with interested parties in the way we have recently about the full range of issues discussed today. The Bill will deliver a generational shift in employment rights. It will do so by working with businesses and trade unions in a collaborative manner. These changes to the qualifying period and the compensation cap are proportional and practical. For those who are concerned about business impact, the joint letter should provide noble Lords with reassurances that businesses support this workable agreement. As they have stated,

“now is the time for Parliament to pass the Bill”.

I hope noble Lords will recognise the progress made over the past nine months, oppose the amendment tabled by the Opposition Front Bench, and, in doing so, support the package to deliver certainty for businesses and fair rights for workers. It is indeed time for Parliament to pass the Bill. I commend it to the House.

[Lord Sentamu (CB)]

My Lords—

--- Later in debate ---

[Baroness Lloyd of Effra (Lab)]

I thank the noble and right reverend Lord for his question. As I mentioned last week, the context here is Bill specific and the changes that have been proposed and have been put in terms of this tripartite agreement were in response to issues that had been raised in your Lordships’ House. We went away and convened a particular mode of operating, and we have brought it back as a Bill-specific package. As I also mentioned last week, there are many discussions in the House about how we want to take business forward. The Leader of the House has set that out very clearly. That is the way we intend to proceed more generally.

[Lord Sharpe of Epsom (Con)]

My Lords, I am grateful to all noble Lords who have spoken in this very brief debate. The noble Lord, Lord Pannick, is of course right—I did not quote that bit of the letter because the Minister did. The House generally does not like needless repetition, so I am following the rules.

I am very grateful to the Minister for those assurances, and I am somewhat reassured. I am grateful—correct me if I have any of this wrong—that the impact assessment will be published before commencement and will be public and transparent and include a dispute resolution mechanism, that the tripartite agreement will endure going forward in further discussions around the Bill, and that all stakeholders will be consulted widely. That is, in effect, what we were asking for. The simple fact of the matter, though, is that we on these Benches will continue to hold the Government to account on behalf of the wealth creators, the businesses, the employers and their workers in this country.

I have heard what has been said and will emphasise a point made by the noble Lord, Lord Vaux, which I should have made in my speech: we are particularly concerned about the impact of the entire Bill on small businesses. We will return to that theme unless their interests are very carefully protected going forward.

As to the comments by the noble Lord, Lord Fox, regarding the strategic position, I am not entirely sure what the strategic position is. But I am grateful for his comments.

I am also enormously grateful to all those on His Majesty’s Loyal Opposition’s Benches and the many on the Cross Benches who stuck to their principles. We have achieved a great deal and made a bad Bill marginally more palatable. I beg leave to withdraw Motion A1.

Technology Adoption Review

Baroness Lloyd of Effra Excerpts

Monday 15th December 2025 Lords Chamber

[Baroness Jones of Whitchurch]

To ask His Majesty’s Government what progress they have made in implementing the recommendations of the Technology Adoption Review.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)]

The review’s recommendations were incorporated into the industrial strategy and since its launch we have begun to deliver on our commitments. For example, we have allocated £99 million of funding to allow for the expansion of the Made Smarter programme to support increased adoption of technologies such as AI in advanced manufacturing. We are taking forward work to implement the recommendations of the SME Digital Adoption Task Force, which published its recommendations in July.

[Baroness Jones of Whitchurch (Lab)]

My Lords, among its many findings, the review identified that there is a proliferation of different business support schemes designed to improve technology adoption and productivity. Many of these are short lived, their impact is variable and they are hard for SMEs to navigate. What consideration is being given to streamlining business support based on the evidence of which interventions have proved most successful in the past?

[Baroness Lloyd of Effra (Lab)]

I thank my noble friend for her commitment and sponsorship of this important area. Long-term certainty is critical in driving private sector investment. That is why we are expanding successful programmes such as Made Smarter Adoption, and making changes to government procurement and regulation. To make it easier for businesses to find the support they need, in July we launched the new Business Growth Service, including developing a single online access point for government-backed advice and support services. It has already seen over 127,000 domestic users.

[Lord Kirkhope of Harrogate (Con)]

My Lords, it is really encouraging to hear in the report about AI adoption hubs set regionally around the country. I would like to ask the Minister about AI literacy, which is also referred to in the review. Is she happy that we are doing enough to bring about that literacy? That seems to be one of the big problems with the development of AI in this country.

[Baroness Lloyd of Effra (Lab)]

The noble Lord is absolutely right that we need to take action on a number of fronts, including AI literacy and digital skills more generally. The Government are taking action on digital skills in a number of areas, including through what was the CyberFirst programme and is now the TechFirst programme, looking at both young people and students.

On AI skills, particularly for those in the workforce, the Prime Minister announced a plan to train 7.5 million workers with essential AI skills by 2030 through our industry partnership with key players. It is great to have those players collaborating with us on that.

[Lord Clement-Jones (LD)]

My Lords, the Technology Adoption Review is clear that the UK’s ability to turn research excellence into productivity gains depends on skills and access to world-class talent across our innovation system. In light of Sir Paul Nurse’s recent warnings that high visa fees and restrictive rules are actively deterring early career researchers and damaging the UK’s science base, will the Government commit to aligning research visa policy with their technology adoption ambitions, say, by emulating the Canada Global Impact+ Research Talent Initiative?

[Baroness Lloyd of Effra (Lab)]

The noble Lord is right that attracting high-calibre talent to this country is incredibly important. We have a number of ongoing initiatives to do that, including the Global Talent Taskforce, as well as through academia, as my noble friend the Minister with responsibility for science and technology talked about. The digital skills jobs plan will also set out how we can support that aim and get the balance right between growing homegrown talent and attracting those we need to from abroad, so that we have the best chances of growing our science base and the spin-outs.

[Lord Hunt of Kings Heath (Lab)]

My Lords, does my noble friend agree that AI literacy should be extended to the police force and the judiciary? In very recent cases, it is clear that AI provided incorrect quotes in compiling reports and writing judgments; and in the case of the West Midlands Police, a non-existent football match was cited as a reason why Maccabi fans should not be allowed into Birmingham. Do we not have to do a lot more to teach people how to use AI properly?

[Baroness Lloyd of Effra (Lab)]

My noble friend is absolutely right that AI has huge potential, but that getting right its adoption and the use of critical skills, whether in the public or private sector, is an integral part of ensuring that it drives productivity and all the promised expectations.

[The Lord Bishop of Derby]

My Lords, impressive work is already under way to drive technological innovation across local and regional government. Derby City Council was the first in the UK to introduce phone assistants powered by generative AI—they are called Darcie, Ali and Perry; do come and ask me why they have those names if you want to know—to streamline call centre interactions with residents. I declare my interest as Bishop of Derby and a member of the Derby City Partnership board. How will the Minister’s department learn from best practice and pilot initiatives across local and regional government to ensure that AI implementation maintains inclusivity and high ethical standards in all sectors?

[Baroness Lloyd of Effra (Lab)]

Learning from best practice is a critical part of our approach, as is taking test and learn pilots out so that we can see what works on the ground, particularly in collaboration with local government, businesses and civil society. It is an approach that we take across many different parts of the public sector, and I will make sure that we look at that example in particular.

[Lord Brooke of Alverthorpe (Lab)]

My Lords, the report is critical of skills shortages, problems with regulations and the financial constraints on investments. I know that it is not directly the Minister’s responsibility, but could she talk to the Treasury about looking for alternative systems of raising funds, and involving the public and extending public/private partnerships, so that we can get some initiative and money going in, in addition to the money that will be invested that she already mentioned?

[Baroness Lloyd of Effra (Lab)]

In many areas—in fact, the entire industrial strategy and particularly the Technology Adoption Review—that has been done in concert with the private sector. It is an incredibly important part of the approach. To take one example, the skills package in construction takes that approach forward; both the private and public sectors are putting themselves forward together to provide more opportunities for young people. That is the approach that we will take across digital and AI skills, as I mentioned.

[Viscount Camrose (Con)]

I draw noble Lords’ attention to my technology interests, as set out in the register. What assessment have the Government made of the critique of the CBI and others that their technology adoption plans are too fragmented? Does the Minister agree that, without strong co-ordination across different technology adoption initiatives, we will be unable either to assess their collective impacts or to learn their individual lessons?

[Baroness Lloyd of Effra (Lab)]

The technology review and many others have identified that there is no silver bullet in respect of technology adoption. What is needed in the creative industries is perhaps completely different from what is needed in the energy sector, for example. The review’s approach and its adoption into the industrial strategy is to match the needs of a particular sector with a set of technological or digital approaches. Beneath that are some common themes—for example, on skills, connectivity or infrastructure. We have to look at it in that way: measures cut across the economy and specific measures are suited to subsectors.

[Lord Hampton (CB)]

My Lords, as a teacher, when anybody in the House says, “We need to teach people stuff”, I keep on saying, “Why do we not teach it in schools and why do we not teach it properly?”

[Baroness Lloyd of Effra (Lab)]

The question of digital skills and media literacy is probably most relevant to this area. The noble Lord will have seen that the curriculum and assessment review, which came out recently, has taken into account the need to update our approach to embrace both the risks and the opportunities of the digital world and AI.

Employment Rights Bill

Baroness Lloyd of Effra Excerpts

Consideration of Commons amendments and / or reasons
Wednesday 10th December 2025 Lords Chamber

Moved by

[Baroness Lloyd of Effra]

That this House do not insist on its insistence on Lords Amendment 1B in respect of which the Commons have insisted on their disagreement; and do agree with the Commons in their Amendments 1E and 1F in lieu of Lords Amendment 1B.

[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, I shall speak also to Motions A1 to E1. Given the developments that have taken place since the Bill was last debated by the House, I would like to take some time to set out the context of those changes. I therefore must ask for the indulgence of the House with regards to the length of my speech.

Before to turning to the specifics of the amendments in the name of the noble Lord, Lord Fox, I want to provide a general update. Throughout the passage of this important Bill, which delivers on multiple manifesto commitments, we have gone through careful deliberation, scrutiny and debate. Noble Lords will have seen my statement given to your Lordships’ House last week where I outlined how the Government had convened tripartite discussions with trade unions and business representative organisations. Those discussions were focused on finding a way forward on unfair dismissal. This is an issue which business and many in your Lordships’ House, including His Majesty’s loyal Opposition, told us was their number one priority. Solving it was the only means of breaking the current impasse between this House and the other place.

I am glad to report that we have secured an agreement between trade unions and business representative organisations on that issue which has unlocked a path to get this much-needed Bill on to the statute book without further delay. This is acknowledged in the joint statement made by business representative organisations involved in the negotiations, which accepts that any remaining concerns with the Bill can be dealt with in the regulations to come, which will be informed by open and transparent consultation. This negotiated outcome has now been debated and agreed by the elected House. We will, of course, debate it in detail this afternoon, but I ask your Lordships’ House to endorse the agreement reached by worker and employer representatives.

The success of these discussions sets a clear example of the benefits of working together in a tripartite manner. This commitment was front and centre of the Labour Party’s plan to make work pay, and I am pleased to see it in action as part of these discussions. We must not stand in the way of, and further delay, these long-promised improvements to workers’ rights.

As the recent agreement centres on unfair dismal, I shall speak first to Motion B and Amendments 120G to 120M tabled by the Government in the other place, and Motion B1 and the amendments to the Commons amendment tabled by the noble Lord, Lord Sharpe of Epsom, relating to unfair dismissal.

The Government’s amendments in lieu will reduce the qualifying period for unfair dismissal protections from 24 months to six months, all while maintaining existing day-one protections against discrimination and automatically unfair grounds for dismissal. To further strengthen these protections, the Government have also tabled amendments which will ensure that the qualifying period for unfair dismissal protections can be varied only by primary legislation and that the compensation cap for claims will be removed. That will remove both the 52 weeks’ pay and the £118,223 cap. In practice, few awards get anywhere close to these caps, with the median average award for unfair dismissal being £6,746 in 2023-24. Removing the cap would not impact the methodology for how an employment tribunal calculates these awards.

The amendments from the noble Lord, Lord Sharpe, would change the Government’s amendments and go against the negotiated outcome of discussions between the trade unions and business representatives in November. My colleague, Minister Dearden, confirmed the outcomes of these negotiations in the Commons when debating this element of the Bill on Monday. She said

“I was in the room as part of the negotiations with business representatives and trade unions … I can confirm that the compensation cap was discussed and agreed in the room”.— [Official Report, Commons, 8/12/25; col. 94.]

The Government believe that the current compensatory award caps incentivise claimants to construct complex cases which allege discrimination to access uncapped compensation. These types of claims are more complex and take longer for the tribunal to handle. Therefore, by our removing the compensation cap for ordinary unfair dismissal claims, this incentive will be lessened, making it easier for tribunals to reach a judgment more quickly and decreasing burdens on the system.

Following a helpful meeting with the noble Lord, Lord Vaux of Harrowden, I can confirm that we will publish an enactment impact assessment for the Bill as soon as possible once the Bill secures Royal Assent and prior to commencement regulations for the entire unfair dismissal package being presented to Parliament. The new impact assessment will be publicly available and include an assessment of the impact of the removal of the compensation cap. We are aware of representations made by organisations, including the British Retail Consortium and UKHospitality. The Government stand ready to engage with those and similar organisations to hear their concerns and answer their questions.

Our impact assessments will set out how we will review the Bill and any secondary legislation that follows. Implementing the Bill will take several years, and its full effects will not be realised until long after Royal Assent. That is why our monitoring and evaluation framework will ensure that the real-world impacts are tracked and used to inform future policy decisions.

We will also publish post-implementation reviews to assess the impact of the implemented policies. These will typically occur five years after the legislation comes into force. Additionally, the dispute resolution stakeholder taskforce, which includes business representative organisations and trade unions, is looking at the likely impact of the full suite of measures in the Employment Rights Bill on employment tribunals, including the removal of the compensation cap. I can assure noble Lords that findings from the impact assessment on the removal of the compensation cap will be taken into consideration by the taskforce. This taskforce will help the Government to develop reform measures to ensure that the current system, including ACAS, is more efficient and resilient so it is better equipped to respond to future changes.

I now turn to Motion A and the government Amendments 1E and 1F, and to Motion A1 and Amendments 1G and 1H, which were tabled by the noble Lord, Lord Fox, relating to zero-hours contracts. I take this opportunity to thank the noble Lord, Lord Fox, for his contributions throughout the passage of the Bill. Our conversations have been constructive and productive. While others have sought to oppose measures in the Bill outright, we have appreciated his efforts to understand and accommodate our chosen policy approach while ensuring that the Bill is deliverable in a manner that works for employers and employees alike.

We agree that security of work is of the utmost importance, and it is clear that we align on needing to protect workers from precarious employment. We also agree that future arrangements must not place excessive burdens on employers. We will do this by working with businesses and other stakeholders on the detail of the zero-hours measures, which will be set out in future regulations.

We have tabled an amendment in lieu in the other place which will place a statutory duty on the Secretary of State to consult before exercising powers to set the length of the initial and subsequent reference periods. This consultation will conform to best practice and ensure that all stakeholders can contribute and shape how reference periods are set in regulations. The amendments in the name of the noble Lord, Lord Fox, seek to set the subsequent reference period at no less than 26 weeks. I can reassure him that our amendment places a statutory duty to consult on this detail. As part of the consultation, there will be adequate opportunity for him and others to feed in their representations on the length of subsequent reference periods before the detail is set in regulations.

We recognise that there is a strong business interest in this issue, given the new responsibilities that businesses will have under this part of the Bill, and we are committed to working with them, unions and stakeholders ahead of the necessary secondary legislation. It is important we get the detail right, and we cannot do that without consultation. It would not be appropriate for us to pre-empt that exercise and, therefore, I cannot support the noble Lord’s amendment. However, I look forward to hearing what he says on the matter, and I hope he will agree that our proposed approach is fair, workable and balanced, ensuring that the Government can implement their manifesto commitment with the input of key stakeholders.

Motion C and Amendments 48E and 48F, tabled by the Government in the other place, relate to seasonal work. The Government are fully aware that for some employers, work fluctuates throughout the year. The consideration of seasonal work is built into the right to guaranteed hours provisions and embedded in the Bill. There are several ways in which the employer can approach seasonal demand. In the other place, we tabled a further amendment in lieu, placing a statutory duty on the Government to consult before making these relevant regulations, including with representatives of seasonal workers and representative bodies of employers with seasonal workers.

Therefore, before any such regulations are introduced, employers, trade unions and other parts of civil society with interests in seasonal work will be consulted. This will ensure that they have their say and can directly influence the policies set out in the regulations, enabling the flexibility and security that are needed for the seasonal work sector. I thank the noble Lords on the Front Bench opposite and the noble Lord, Lord Fox, for their engagement on this issue. In our engagement, we provided indicative examples of how the relevant provisions would apply to different types of seasonal worker. I have shared these in an all-Peers letter to noble Lords which we hope will further contextualise these points.

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[Lord Pannick (CB)]

My Lords, there is one short point that the House should bear in mind in relation to Motion B1. There is already no cap on the award of compensation in employment tribunals for race discrimination, sex discrimination and disability discrimination cases. The House may therefore think that the concerns that have been expressed about the impact of the removal of the cap are perhaps rather exaggerated.

[Baroness Lloyd of Effra (Lab)]

My Lords, I thank all noble Lords for their contributions today. This continues the robust discussion that we have had throughout the passage of the Bill.

I come first to some of the constitutional points, or those that go to the way that we do business. As I outlined in my opening speech, the tripartite talks and the amendments resulting from them were context- and Bill-specific. They were really a demonstration of the way in which we listened very clearly to the views expressed in this House through many exchanges, which led to a very productive tripartite discussion. However, they are very context- and Bill-specific. The noble Lords, Lord Vaux and Lord Cromwell, will be familiar with discussions with the Leader of the House on how she and other Members would like to conduct business more regularly.

I will address some of the points made. Again, coming back to the nature of it all, these were discussions between business representative organisations, trade unions and the Government. Specifically on the question of the minutes, there are Civil Service contemporaneous notes of the meetings, but they have not been shared with participants or more widely. We think that it would be impolite and inappropriate to share the meeting notes without the agreement of those who attended the meetings. The Government’s statement and update on the Employment Rights Bill, released on 27 November, and the subsequent Written Ministerial Statement laid in both Houses provide the public summary and conclusion of that meeting. Although it was a slightly different process, we laid that Written Ministerial Statement as soon as we could to give as much clarity as possible to the House on the developments that were happening, which were, as I said before, in response to concerns raised here.

On the question of lifting or removing, that is indeed something that I have also given some thought to. The word “lift”—lifting embargoes; lifting bans—is used very commonly in that manner to mean “remove”. When asked this question in the other place, my colleague, Minister Dearden, confirmed the outcomes of the negotiations and said

“I was in the room as part of the negotiations … I can confirm that the compensation cap was discussed and agreed in the room”.—[Official Report, Commons, 8/12/25; col. 94.]

I was not in the room and I therefore give weight to the comments that she made on that.

To address the comments and interventions made by the noble Lord, Lord Vaux, and my noble friend Lord Barber, this is, in total, a pragmatic way forward. The opposition amendment would not enable us to move forward because it would remove the cap and replace it with the report. It is not something that can be encompassed, and we should continue with the package as negotiated; it is not consistent with the agreement that was reached and which we have brought to your Lordships and encapsulated in the Bill. I just underline that it is not something that we can accept.

Points have been made about the actual substance of the cap. The noble Lord who spoke just before me made the extremely pertinent point that there are already areas of the law that have uncapped areas, and we do not think that removing the cap will mean that compensatory awards will necessarily increase in the way that others have set out. Tribunals have well-established ways of calculating the compensation that might be awarded for particular types of losses resulting from unfair dismissal. As the figures cited today show, those methodologies lead to awards that are, on average, under £7,000. Employment tribunals will continue to focus on claimants’ actual losses when determining awards. I think that some of the fears are unwarranted but, in any case, we will publish the impact assessment and we will engage with business organisations continuously. The last month has shown how productive it can be to engage with business organisations and trade unions together to advance all the measures here. I think that I have dealt with all the points made by Members on the cap.

I come on to the political funds and the question of whether it is an active choice or whether we are trying to restrict people from making an active choice as to whether to contribute to a political fund. When joining a trade union, new members are taking an active choice to voluntarily join a collective organisation that has decided, via a democratic ballot of members, to establish a political fund. We do not see these as two distinct decisions—a decision to join a democratic organisation that has a political fund and a decision to opt in to a political fund—but one active decision. I remind noble Lords that all we are proposing to do is to restore the position as it was for 70 years—I will perhaps not give quite as much detail as my noble friend—before the Trade Union Act 2016 came into force. This simplifies the political funds process to ensure that a balance is struck between protecting trade unions from administrative burdens and ensuring that members continue to have a choice on whether they wish to contribute to a political fund.

Crucially, we agree with the noble Lord, Lord Burns, that members who, for whatever reason, choose not to contribute, should and will be able to do so easily and without detriment, and can exercise that right to opt out of contributing. We will continue to require trade unions to make new members aware of their right to opt out of the political fund. The unions will have to explain to members on the application form that opting out will not affect other aspects of their membership and they will not face any disadvantage. Members will be able to easily inform unions of their decision to opt in or out, including by post, email, completion of electronic form or by any other electronic means.

I was asked about the guidance or regulations in this area. The Secretary of State will be under a duty to issue the guidance within three months of the relevant section coming into force. This guidance will set out expectations as to how quickly unions should action opt-out notifications and will state that unions should, as a matter of best practice, give effect to opt-out notices at the earliest feasible opportunity. This will help to ensure that unions action the opt-out notices promptly. As I stated earlier—I can commit to this again—the guidance will also be clear that opting out must be properly available and practically possible for members who wish to exercise that right. We want to make sure that members are able to opt out in that way, and the guidance will be clear on how that is effected. On the question of the rebate, that will be effected at the earliest time possible once the opt-out notice has been given.

On the question of ballot thresholds, I noticed the attempt to recontextualise the recent year’s industrial action, but the fact is that a threshold of 50% has not led to less industrial action. All strike action recently has taken place with a turnout of more than the 50% threshold, so we do not think that this will inhibit good industrial relations. In fact, we think that the 50% level is unnecessary. It is inhibiting the democratic right of union members and unions to demonstrate their will. It does not take place in other areas—for example, local government or parliamentary elections. Therefore, we do not think it should continue. However, to reiterate, we will not repeal the 50% threshold until we have assessed the impact of e-balloting. The Secretary of State will have to have regard to the impact of that, and he will lay a Statement explaining what the effect of e-balloting is before the 50% threshold is rescinded.

To conclude, we now want to move forward with purpose, guided by our manifesto commitment to work constructively with stakeholders.

--- Later in debate ---

[Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)]

My noble friend is coming to the end. We should hear her remarks and then we will go to the votes.

[Baroness Lloyd of Effra (Lab)]

I emphasise again that the Government’s convening of recent discussions and our willingness to compromise on the issue of unfair dismissal should signal to parliamentarians and stakeholders that we want to get this right. I emphasise that the Government’s work on this agenda is far from over. There will be opportunities for further debate and scrutiny, and I look forward to these discussions. I therefore hope that noble Lords will join business representatives and trade unions in supporting the position reached in recent discussions and backing the Government’s Motions today.

[Lord Fox (LD)]

My Lords, there was a moment when I was engulfed in shame that I had misunderstood the difference between median and average. Fortunately, the noble Lord, Lord Hendy, distracted your Lordships quite quickly, so I have recovered.

Nobody in this House is pretending that this is perfect. We are at a point of pragmatism and, I remind your Lordships, at the third round of ping-pong. The noble Lord, Lord Vaux, has made some important points. All of us go into this. If it was perfect, I would press Motion A1 and I would want to keep on iterating. I know that now is the time for this Bill to pass. Therefore, I beg leave to withdraw Motion A1.

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Moved by

[Baroness Lloyd of Effra]

That this House do not insist on its insistence on Lords Amendments 23 and 106 to 120 in respect of which the Commons have insisted on their disagreement; and do agree with the Commons in their Amendments 120G, 120H and 120J to 120M in lieu of Lords Amendments 23 and 106 to 120.

120G: Leave out Clause 23 and insert the following new Clause—
“Right not to be unfairly dismissed: qualifying period and compensatory awards
Part 10 of the Employment Rights Act 1996 (unfair dismissal) is amended in accordance with subsections (2) and (3).
In section 108 (qualifying period of employment)—
(a) in subsection (1), for “two years” substitute “six months”;
(b) in subsection (2), for ““two years”” substitute ““six months””.
(3) Omit section 124 (limit of compensatory award etc).
(4) In section 209 of that Act (powers to amend Act), in subsection (5), omit “108(1),”.
(5) Schedule (Minor and consequential amendments relating to section (Right not to be unfairly dismissed: qualifying period and compensatory awards)) contains minor and consequential amendments relating to this section.”

--- Later in debate ---

120M: As an amendment to Lords Amendment 42, line 2, leave out “(3) and” and insert “(2A) to”

[Baroness Lloyd of Effra (Lab)]

My Lords, I have already spoken to Motion B. I beg to move.

Motion B1 (as an amendment to Motion B)

Moved by

--- Later in debate ---

Moved by

[Baroness Lloyd of Effra]

That this House do not insist on its insistence on Lords Amendment 48B in respect of which the Commons have insisted on their disagreement; and do agree with the Commons in their Amendments 48E and 48F in lieu of Lords Amendment 48B.

48E: Clause 1, page 6, line 20, at end insert—
“(9A) Before making the first regulations to be made under subsection (9)(c) the Secretary of State must consult—
(a) such persons representing the interests of seasonal workers as the Secretary of State considers appropriate,
(b) such persons representing the interests of employers of seasonal workers as the Secretary of State considers appropriate, and
(c) such other persons as the Secretary of State considers appropriate.”

--- Later in debate ---

Moved by

[Baroness Lloyd of Effra]

That this House do not insist on Lords Amendments 72D to 72H, to which the Commons have disagreed; and do agree with the Commons in their Amendments 72J and 72K in lieu of Lords Amendments 72D to 72H.

72J: Clause 59, page 87, line 10, after “case,” insert “the earlier of—
(i) a day specified in, or determined in accordance with, the rules of the union, and
(ii) ”

--- Later in debate ---

Motion E

[Baroness Lloyd of Effra]

Moved by

That this House do not insist on its insistence on Lords Amendment 62 in respect of which the Commons have insisted on their disagreement; and do agree with the Commons in their Amendment 62E in lieu of Lords Amendment 62.

62E: Clause 156, page 151, line 6, at end insert—“(5) In deciding whether and when to make regulations under subsection (3) bringing section 65 (industrial action ballots: turnout threshold) into force for any purpose, the Secretary of State must have regard to what effect any provision made after this Act is passed for industrial action ballots to be conducted otherwise than by post has had, or is expected to have, on the proportion of those eligible to vote in such ballots doing so.(6) The Secretary of State may not make regulations under subsection (3) bringing section 65 into force for any purpose unless the Secretary of State has laid before Parliament a statement as to how the Secretary of State has had regard to any such effect.(7) In subsection (5) “industrial action ballot” means a ballot for the purposes of section 226 of the Trade Union and Labour Relations (Consolidation) Act 1992 (ballots on industrial action).”

[Baroness Lloyd of Effra (Lab)]

My Lords, I have already spoken to Motion E. I beg to move.

Motion E1 (as an amendment to Motion E)

[Lord Sharpe of Epsom]

Moved by

Leave out from “House” to end and insert “do insist on its Amendment 62, and do disagree with the Commons in their Amendment 62E in lieu of Lords Amendment 62.”

Children: Social Media

Baroness Lloyd of Effra Excerpts

Wednesday 10th December 2025 Lords Chamber

[Baroness Berger]

To ask His Majesty’s Government what consideration they have given to introducing a ban on social media for all children under the age of 16 similar to the one to be introduced in Australia on 10 December.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)]

We understand parents’ concerns about the impact of social media on children. We have taken some of the boldest steps globally to ensure that online content is genuinely age appropriate. It is important that we protect children while also letting them benefit safely from the digital world. We are closely monitoring Australia’s approach to age restrictions. When it comes to children’s safety, nothing is off the table, but any action must be based on robust evidence.

[Baroness Berger (Lab)]

My Lords, our children and young people are living through an experiment imposed on them by platforms that are profiting off their stress, their lack of sleep and their diminished self-worth. I welcome the Australian Government taking action to address the urgency and gravity of this issue. I listened closely to my noble friend the Minister. The impact on teenagers in this country is getting worse, not improving. Will the UK follow Australia, Norway, Denmark, Malaysia and the EU, and impose a ban on under-16s?

[Baroness Lloyd of Effra (Lab)]

We are taking serious action here in the UK through the Online Safety Act. We are also looking very carefully at the evidence that is available about the impacts of social media, screen time and media use on children’s development. At the moment, we do not see a causal relationship between screen time, social media use and children’s development, but we are committed to improving this evidence base. We are looking very closely at what other countries are doing, particularly Australia, with which we have an MoU.

[Lord Hannan of Kingsclere (Con)]

My Lords, the Minister thinks that 16 year-olds should not have certain access. The noble Baroness, Lady Berger, if I understand her, thinks that they should be banned from social media. Can I take it as read that both noble Baronesses will oppose 16 year-olds having the vote?

[Baroness Lloyd of Effra (Lab)]

I do not follow that logic at all. People have different views on online content, and trying to balance the potential benefit that children can have from accessing the digital world with trying to protect them from the harms that they can also see is exactly what joins together many around this House and is exactly what we are trying to navigate through the Online Safety Act.

[Viscount Colville of Culross (CB)]

My Lords, the social media ban on under-16s in Australia is well-intentioned but is not the right solution to protect children from harms. Does the Minister agree with the Molly Rose Foundation that the ban risks creating a cliff edge for young people who at 16 will suddenly be exposed to a poorly regulated online space? Does she agree that there should be strengthened regulation on social media platforms so they are safe for children rather than excluding them altogether?

[Baroness Lloyd of Effra (Lab)]

The noble Viscount makes a really good point—one I was trying to make not as eloquently earlier—that there are good reasons for children to be online. Children of all ages can benefit from being online, but appropriate protections need to be in place, protections which do not lead to unintended consequences. I think our approach, which we are putting in step by step and backing Ofcom to enforce, is the right one at this stage. We are looking very carefully at the evidence as it emerges and looking very carefully at other countries’ experience and not taking things off the table if the evidence leads us in that direction.

[Lord Mohammed of Tinsley (LD)]

My Lords, what steps are the Government taking to ensure that parental controls and education initiatives are keeping pace with the ever-evolving risks that social media poses to our young people right now?

[Baroness Lloyd of Effra (Lab)]

The role of parents and of media literacy is, of course, critical. Indeed, as technology evolves, as access changes, the department will be supporting parents and carers with media literacy. From next year, there will be some pilot projects to support families navigate the online space, particularly in critical thinking and in trying to understand misinformation, disinformation and so on. We are also working very closely with the Department for Education to establish some parental support and some parental hubs in order to support parents having some of those quite difficult conversations.

[Baroness Penn (Con)]

My Lords, the Minister talked about support for parents. Last week, the Centre for Social Justice released a new analysis showing that almost 1 million preschool children are active on social media, something that even the platforms, I would say, do not think is appropriate. That number is rising rapidly. What work are the Government doing with platforms, Ofcom and parents and carers specifically to support those who care for preschool children—nought to five-year-olds—to navigate this online world?

[Baroness Lloyd of Effra (Lab)]

As I mentioned before, we think it is incredibly important to support parents to navigate the online world and support their children’s access. I mentioned the pilot awareness campaign, which is more targeted at eight to 14 year-olds, but I believe the resources that will be available with the Department for Education are more extended. We also support Ofcom’s updated media literacy duties under the Online Safety Act. As part of that, Ofcom is delivering a three-year media literacy strategy that prioritises support for children and families.

[Lord Patel (CB)]

My Lords, in the Lord Speaker’s lecture given by Dr Vivek Murthy, the former US Surgeon-General, he quoted the evidence of the mental health effect on children, particularly children using social media for over three hours per day. He said that it causes a higher degree of depression and anxiety. That is part of the evidence for why there should be better control for children using any kind of social media.

[Baroness Lloyd of Effra (Lab)]

The noble Lord cites some important evidence which, along with other evidence about the links between social media use and different cohorts of young people, young adults and so on, is very important. The Government and Ofcom are looking at that carefully. As I said before, we continue to keep open all the issues here to protect children from unsafe content, while allowing them to participate actively in the digital world, which can provide many opportunities to young people and much education.

[Viscount Camrose (Con)]

My Lords, screen addiction is a growing problem for all ages, but far more so for children. In July, Peter Kyle, the former Secretary of State for DSIT, committed to bringing forward proposals in the autumn to restrict children’s screen time. Since the reshuffles, we have heard no more about those proposals. Can the Minister clarify this point today? Will the Government be bringing forward a package along the lines set out by the former Secretary of State?

[Baroness Lloyd of Effra (Lab)]

We are focusing on implementation of the Online Safety Act: protecting children from harmful content, backing Ofcom as it goes through the children’s risk assessments of the platform operators, and ensuring that the duties that came in in July are effective. That is the priority for the time being. As I said, we are looking at the evidence and assessing what other measures may be needed. If we need to do so in due course, we will do so.

[Baroness Foster of Aghadrumsee (Non-Afl)]

My Lords, I absolutely agree with the Minister’s point of view that everything needs to be evidence-based. But can I suggest to the Minister that, when she looks at social media harms to children, she also looks at AI chatbots, which can make harmful suggestions to children online? I believe the Government should take that very seriously, so I ask her to look at this harmful element, which is harming our young people.

[Baroness Lloyd of Effra (Lab)]

The noble Baroness raises the importance of keeping up to speed with technological developments and looking at their potential impact. Many AI services are already regulated under the Online Safety Act, including chatbots, and so would fall under the purview of the current regime. If there is a risk of harm to users from illegal content, or content that is harmful to children, that would already fall under the regime and there will be duties that apply on it. The Secretary of State has confirmed to Parliament that she is looking to make sure that there are no gaps in the current legislation. She is also looking to make sure that Ofcom is using its existing powers to regulate those AI chatbots that currently fall within the regime.

Mobile Phone and Broadband Prices

Baroness Lloyd of Effra Excerpts

Tuesday 9th December 2025 Lords Chamber

[Lord Sikka]

To ask His Majesty’s Government what steps they are taking to ensure price increases by mobile phone and broadband companies are fair.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)]

It is important that customers feel empowered in engaging in the telecoms market, and confident that they are getting a fair deal. We support Ofcom in taking action to protect fairness and transparency, and welcome its recent steps to remind consumers of their rights. The Chancellor and Secretary of State have written to the CEO of Ofcom and the CEOs of major telecoms companies urging further, faster action to ensure that consumers are treated fairly.

[Lord Sikka (Lab)]

My Lords, I thank the Minister for her Answer. Phone and broadband companies such as O2 have violated Ofcom’s voluntary code and imposed unjustified mid-contract price hikes on customers. The old and vulnerable are hit hard, as they are less likely to shop around. Inflation and poverty are baked into the system. As reducing the cost of living is a government objective, will the Minister enact legislation to ban mid-contract price rises? Statutory rights are the only effective antidote to corporate abuse of power.

[Baroness Lloyd of Effra (Lab)]

My noble friend is right to highlight the importance of the ability to have the right contract and of giving consumers the information they need. We have no plans to ban in-contract price rises, but consumers have the right to leave, penalty-free, for 30 days from when unexpected price rises are announced by a provider. The Chancellor and Secretary of State asked Ofcom to review the suitability of the current 30-day notice period, to ensure that it can be enacted by consumers who experience unexpected and unannounced mid-contract price rises.

[Lord Storey (LD)]

My Lords, given that many telecom contracts include mid-contract price rises linked to inflation plus an additional percentage, what steps are the Government taking to protect low-income customers from these above-inflation increases?

[Baroness Lloyd of Effra (Lab)]

The Chancellor and the Secretary of State have asked Ofcom to review the effectiveness of the changes that came in in January 2025, which set out that consumers must get the details in pounds and pence, so that they can have clarity. We have asked Ofcom to see how effective that is and a report will be coming in spring 2026, so that we can be assured that the measures are indeed effective.

[Lord Vaizey of Didcot (Con)]

My Lords, I certainly do not support mid-contract price rises but, arguably, mobile prices in the UK are among the lowest in Europe, which to an extent affects mobile operators’ ability to invest in the world-class mobile infrastructure we need. On that note, can the Minister update us on the progress of the shared rural network, which will bring mobile coverage to so many areas of the country that do not yet have it?

[Baroness Lloyd of Effra (Lab)]

The noble Lord is right to stress the importance of investing in our digital infrastructure, both in the mobile network and, I would also say, in the fibre network through Project Gigabit. The shared rural network continues to operate this year, bringing more availability to areas that are not covered. Our mobile coverage is increasing year on year.

[Baroness Blower (Lab)]

My Lords, services such as NHS appointments, banking and even shopping, regrettably, have moved online. The typical cost of broadband is around £400 a year—assuming, of course, that people can afford to buy a phone or computer. A new class of social exclusion is therefore emerging. What assessment have the Government made of this new level of social exclusion and its consequences?

[Baroness Lloyd of Effra (Lab)]

Earlier this year, the Government published the Digital Inclusion Action Plan, which set out a number of the measures that we are taking, on top of the importance of the digital infrastructure being in place. They include measures on access to devices and the skills and confidence to enter the online world. There are social tariffs that consumers can use; they should contact their providers to make sure that, if they are eligible for them, they can take them up.

[Baroness McIntosh of Pickering (Con)]

My Lords, the noble Baroness will be aware that the 5% hardest to reach in rural areas are being further disadvantaged by the taking out of landlines. Storm Arwen took all the landlines and mobile phones out over a large area of the north-east and north Yorkshire for nine days. People must be able safely to summon help in an emergency. That will not happen if these landlines are taken out.

--- Later in debate ---

[Baroness Lloyd of Effra (Lab)]

The resilience of our network is absolutely critical. A fibre network is more resilient to many shocks, so the move to fibre will provide more resilience in the future. It is very important that in this transition from the PSTN to the fibre network, vulnerable customers are supported and have the back-up they need in cases of power cuts, and so on. The transition from the PSTN to the other network has already taken place for a large number of consumers in this country and is well on track towards the final handover.

[Lord Watts (Lab)]

My Lords, can I bore the House again? Our regulators are some of the worst in the world and they are letting the public down. We are not holding them to account. Is it not about time that some of these individuals got sacked and replaced by people who will protect the public?

[Baroness Lloyd of Effra (Lab)]

There are very important roles for our regulators. There are also very important governance systems in place that govern how regulators work and how they are accountable to Parliament. I do not think there is any case at present to take the action my noble friend suggests.

[Viscount Camrose (Con)]

My Lords, in May, the Vodafone-Three merger was completed, reducing the number of mobile operators in the country from four to three. Building on the question from my noble friend Lord Vaizey, six months on from the merger, what is the Government’s assessment of its impact, first on consumer prices and secondly on investment in the infrastructure that improves both the digital economy and rural connectivity?

[Baroness Lloyd of Effra (Lab)]

As part of that merger, there was a commitment to invest £11 billion in infrastructure. That is a very important part of the continued rollout of our digital infrastructure, and it is monitored through Ofcom’s Connected Nations report, which is published regularly.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, with the growing emphasis and reliance on—and need for—mobile phones and broadband to undertake business and personal issues throughout the UK, and with problems regarding physical impediments in rural areas, will my noble friend the Minister have immediate discussions with her ministerial counterparts in the devolved Administrations to ensure that there is better connectivity with those broadband companies and the regulator, to ensure better access for all?

[Baroness Lloyd of Effra (Lab)]

It is very important that there is connectivity across all the nations, and geographic coverage targets do include all nations. Many of the programmes in place to support the commercial rollout prioritise those rural areas, including for example in Scotland, Northern Ireland and across the devolved nations, so that all people can benefit from increased connectivity.

[Baroness Foster of Aghadrumsee (Non-Afl)]

My Lords, I urge the Minister to look at the experience of Northern Ireland because, under the confidence and supply agreement signed with the then Conservative Government, Northern Ireland has the best connectivity anywhere in the United Kingdom. That has shown what an enabler it has been for young people and businesses right across Northern Ireland.

[Baroness Lloyd of Effra (Lab)]

That experience indeed shows that good connectivity can provide opportunities for young people to participate in the economy and society. It is our aspiration that all people should have those opportunities.

[Lord Vaux of Harrowden (CB)]

One of the big phone companies has started to charge extra to warn customers of fraud and spam calls. Does the Minister agree with me that part of the basic service of a mobile phone company should be to protect its customers and that it should not charge extra for doing that?

[Baroness Lloyd of Effra (Lab)]

The issue of fraud and telecoms is very important. My noble friend Lord Hanson of Flint recently launched a telecoms fraud charter to emphasise how important it is for all telecoms companies to take action on that.