Employment Rights Bill
Baroness Lloyd of Effra ExcerptsTuesday 16th December 2025
(1 day, 20 hours ago)
Lords ChamberRead Full debate Employment Rights Bill 2024-26 View all Employment Rights Bill 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 156-I Marshalled list for Consideration of Commons Reason - (16 Dec 2025)
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.
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”.
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.
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(2 days, 20 hours ago)
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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 ExcerptsWednesday 10th December 2025
(1 week ago)
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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.
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.
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.
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.
“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.”
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)
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.
“(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.”
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.
(i) a day specified in, or determined in accordance with, the rules of the union, and
(ii) ”
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.
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(1 week ago)
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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(1 week, 1 day ago)
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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.
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.
Online Safety Act 2023 (Priority Offences) (Amendment) Regulations 2025
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Baroness Lloyd of Effra
That the draft Regulations laid before the House on 21 October be approved.
Relevant document: 40th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 4 December.
Children: Age Verification and Virtual Private Networks
Baroness Lloyd of Effra Excerpts(1 week, 6 days ago)
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Baroness Benjamin
To ask His Majesty’s Government what measures have been put in place to prevent children using virtual private networks to avoid age verification to access harmful material online.
The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)
The Online Safety Act requires services to use highly effective age assurance to prevent children in the UK from encountering harmful content. Ofcom’s guidance makes it clear that age assurance must be robust to prevent circumvention. Services must also take steps to mitigate against circumvention methods that are easily accessible to children. Providers that do not comply with their child safety duties by deliberately promoting the use of VPNs could face enforcement action under the Act.
Baroness Benjamin (LD)
I thank the Minister for that Answer. However, Childnet has discovered an increase in the use of VPNs by children in the last three months. While younger children are deterred by age-verification checks, teenagers actively seek out and share methods to circumvent them. Many minors are downloading free VPN applications that often monetise user data and expose devices to viruses. Also, by relocating to countries with few or no internet safety laws, children can be exposed to more extreme, illegal or unmoderated content. Perhaps children under 16 should be banned from social media altogether. What action will the Government take to address the increasing number of children using VPNs? Will they instruct Ofcom to follow the lead of the Australian e-safety commissioner and require that digital services check VPN traffic for technical and behavioural red flags that suggest a user in the UK may be a child? Let us act sooner rather than later.
Baroness Lloyd of Effra (Lab)
We recognise the international efforts to better protect children online, including in Australia, and we are working with the Australian Government to understand the impact of their policies, including that one. There is currently limited evidence on how many children use VPNs, and the Government are addressing this evidence gap. We welcome any further evidence in this area, such as that quoted by the noble Baroness, Lady Benjamin, to complement our understanding. The Government will ensure that we act where we need to, as we have seen in other areas, and that future interventions are proportionate and evidence based.
Lord Vaizey of Didcot (Con)
My Lords, this is a complex and difficult area. I often praise the work of Ofcom in implementing the Online Safety Act, and everyone thinks I am applying to be the chair of Ofcom: I am not. I do however think that the suggestion of the noble Baroness, Lady Benjamin, is a very interesting one. A lot of research needs to be done, and it would be interesting to see the VPN research. There is another huge gap in researching the technology used in our schools by edtech providers, and in providing some kind of quality framework to ensure that this technology—how it collects our children’s data, and so on—is at least transparent and known about, so that requisite action can be taken in the future.
Baroness Lloyd of Effra (Lab)
The noble Lord makes a very good point about the need for accurate, evidence-based research that allows us to take the right action. As noble Lords may have seen, Ofcom published a report this morning setting out a number of methods for researching, for example, the use of VPNs by children. We should also examine technological solutions, as well as advice and guidance, and the role of Ofcom in enforcing the requirements of the Online Safety Act.
Baroness Jones of Whitchurch (Lab)
My Lords, while it is of course important that platforms maintain the standards Ofcom has set for them, does my noble friend the Minister also agree that parents have an important role to play in all of this to make sure that the parental controls on devices are implemented in full? Is there not more of a role for digital literacy for adults, to make sure they are keeping a proper eye on what their children are doing and that they comply with the regulations?
Baroness Lloyd of Effra (Lab)
My noble friend makes a very important point about the role of all of us in using the technology available to protect ourselves and to equip ourselves to be safe online, and for parents to do that in respect of their children. It is also very important that the Government support literacy campaigns, both for digital skills and online safety. The Government will play their part in supporting parents in that domain.
Lord Carlile of Berriew (CB)
On the Radio 4 “Today” programme this morning, Ofcom admitted that none of the three fines levied so far has been paid. Is it not right that Ofcom should be encouraged to take much stronger enforcement action against those who do not pay by making it clear that within a very short time, they will lose their right to appear on any screen in the United Kingdom unless their enforcement is fit for purpose?
Baroness Lloyd of Effra (Lab)
I think we all agree that enforcement is an incredibly important part of the Online Safety Act. Ofcom’s enforcement powers include fines of up to £18 million, or 10% of qualifying worldwide revenue. The Government have been very clear to Ofcom that it has our full backing to take enforcement action. We are standing right behind it to do that as effectively as possible.
Lord Clement-Jones (LD)
My Lords, the Minister says that the Government are standing right behind Ofcom. Many of us very strongly support Ofcom’s actions in fining those such as the AVS Group for not observing proper age checks on their sites. But, as the noble Lord, Lord Carlile, indicates, there is no point in having fines unless we have proper enforcement. What resource are the Government satisfied Ofcom has to pursue enforcement?
Baroness Lloyd of Effra (Lab)
We have ensured that Ofcom is resourced to implement its online safety duties and have increased the amount available to it year on year; its budget is, I think, £92 million to support all its Online Safety Act responsibilities. We believe that it has the resources it needs to effectively implement and supervise the Online Safety Act.
Lord Markham (Con)
Following on from noble Lords’ comments, to me it is quite clear that Ofcom has a lot of the powers necessary to restrict underage usage but seems to lack the will. That was abundantly clear from the Radio 4 interview this morning. My experience in such matters is that the Ofcom leadership really needs to understand the strength of feeling in this House and Parliament as a whole—that they need to be more robust in enforcement. Will the Minister agree to arrange a meeting with the Ofcom CEO and key Lords here today so that we can fully hold Ofcom to account on this?
Baroness Lloyd of Effra (Lab)
The noble Lord makes an important point about the strength of feeling here, which was replicated in the discussions yesterday in the Select Committee. I am very happy to take forward his request to set up a meeting with Ofcom.
The Lord Bishop of Norwich
My Lords, given the Church of England’s role in education, I welcome the age limits introduced for harmful material sites. However, it is very hard to police the use of VPNs, and thus education is likely to be needed in a great deal of cases, as well as enforcement. What role will Ofsted’s new framework play in ensuring that statutory relationships, sex and health education is delivered effectively with regard to this matter?
Baroness Lloyd of Effra (Lab)
I thank the right reverend Prelate for that question. The importance of digital skills and media literacy was highlighted as a recommended area in the curriculum and assessment review, and we will be responding to that. On his point about relationships education, I will have to come back to him.
Baroness Thornton (Lab)
I commend my Government for the action they are taking on the Online Safety Act. It is a bit rich for the party opposite, who dragged their heels for several years, to talk about the implementation of this. I do not know how many noble Lords here would know how to download a VPN and then choose a country which has no age-verification rules. It is clear that there are teenagers who can do this. Is Ofcom researching this? Is it assessing these risks and will it be bringing forward solutions?
Baroness Lloyd of Effra (Lab)
My noble friend highlights the complexity of some of these issues and the importance of understanding exactly the use of VPNs by adults and children, and whether they are indeed being used to circumvent the age-assurance aspects of the Online Safety Act. Ofcom, as it set out this morning, is researching the use of VPNs in many areas, particularly their use by children of all ages—older as well as younger children.
Data Adequacy Status: EU Data Protection Standards
Baroness Lloyd of Effra Excerpts(1 week, 6 days ago)
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Lord Kirkhope of Harrogate
To ask His Majesty’s Government what assessment they have made of the European Commission’s decision of 24 June to extend the United Kingdom’s data adequacy status until 27 December; and what steps they are taking to ensure that the United Kingdom’s new Data (Use and Access) Act 2025 maintains alignment with the EU data protection standards needed for a future adequacy agreement.
The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)
My Lords, the Government welcomed the publication of the European Commission’s draft adequacy decisions in July, which concluded that the UK continues to provide an essentially equivalent level of data protection. The EU’s six-month extension allowed the Commission to consider the reforms made by the Data (Use and Access) Act. I look forward to the successful completion of the adoption process ahead of the 27 December deadline this year.
Lord Kirkhope of Harrogate (Con)
My Lords, I am very pleased with that reply from the Minister. What I am mostly concerned about is the loss of the provisions relating to law enforcement, particularly the real-time exchange of information, on which our intelligence authorities and police authorities have historically relied. That is no longer available to us; in what is undoubtedly a very dangerous world, surely that is a priority for the discussions that will take place now and in the future on the whole question of data adequacy with our European neighbours.
Baroness Lloyd of Effra (Lab)
I thank the noble Lord. He brings a great deal of experience over the years in many areas of data protection legislation, anti-money laundering and the security side. Since the UK and EU leaders’ summit on 19 May, we have been working with the EU to increase the safety and security of UK and EU citizens, to respond to shared threats, and to support police investigations, including through enhanced data exchange. We continue to work and meet closely with the EU on these matters.
Lord Clement-Jones (LD)
My Lords, the Government are trying to hit a moving target, as far as I can see. The EU is adopting a new digital omnibus, which will change EU GDPR. How confident are the Government about being able to get a decision from the EU in time?
Baroness Lloyd of Effra (Lab)
To take that question in two parts, we are confident about the EU’s scrutiny of our legislation. The Commission has started its review and published the report that I mentioned in July. The European Data Protection Board published a non-legally binding opinion on its draft decision on 20 October. We are confident that a member state vote will take place ahead of the 27 December deadline. The EU’s proposals to change its data protection framework have only recently been published. We will have a look at the details of those changes as and when they become clear and are confirmed.
Lord Hunt of Kings Heath (Lab)
My Lords, related to data security is superintelligent AI. Many recent reports have suggested that this is a huge threat to our global security. Are we discussing this with the EU and other international partners to try to mitigate some of the potential damage that could be caused by it?
Baroness Lloyd of Effra (Lab)
We continue to look at all potential AI threats and are immensely assisted in this by the work of the AI Security Institute, which has deepened our understanding of critical security threats posed by all sorts of frontier AI and the type that the noble Lord mentioned. We continue to talk about this to international partners.
Baroness Stuart of Edgbaston (CB)
My Lords, this is not just about legal frameworks; what is also important is the physical security of some of the data structures. Are we in discussions with other European partners, in particular with Ireland, to ensure that their undersea cables are secure, not just undersea but when they enter the mainland?
Baroness Lloyd of Effra (Lab)
The noble Baroness is right that there are risks to undersea cables. I shall have to come back to her on the precise discussions that we have had with Ireland, as I am not completely up to speed with those, but it is something that we are very well aware of in general. We have taken forward a lot of discussions with industry and others about it.
Lord Howell of Guildford (Con)
My Lords, when it comes to data adequacy, the Government are, of course, aware of a report from the UK Statistics Authority that said:
“Quality problems have manifested into published errors, delays, and de-accreditation of official statistics”.
That is pretty damning stuff. Can the Minister tell us what is going to be done now to improve the situation? Flying blind is surely really rather dangerous in the present world circumstances, particularly for this Government.
Baroness Lloyd of Effra (Lab)
I thank the noble Lord for his question. I think about the adequacy of the Office for National Statistics and some of the information that it provides, which we all rely on. In terms of the particular programme of enhancement, I shall need to come back to him on that point to set out what is being done in that area.
Lord Hodgson of Astley Abbotts (Con)
My Lords, if, as the Minister says, this is such an important matter, why did it not merit a single mention in the Chancellor’s speech on the Budget?
Baroness Lloyd of Effra (Lab)
On the issue of data adequacy agreements with the EU, I think we are proceeding quite adequately in terms of the process of it scrutinising our data protection regulations. We are confident that the 27 December deadline will be met.
The Earl of Clancarty (CB)
Is there a relationship here with concerns over IP and copyright, because our rules for data reuse are relevant to alignment with the EU?
Baroness Lloyd of Effra (Lab)
The noble Earl asks a very interesting question but one which I am afraid, again, I am unable to give him any deep answer on. I shall have to revert to him on IP in particular.
Lord Markham (Con)
My Lords, in view of the high stakes for UK services in digital trade with the 27 December deadline fast approaching, will the Government publish the adequacy risk assessment and correspondence that they have shared with the Commission, redacted where necessary, so that Parliament and stakeholders can see how they have satisfied themselves that the Data (Use and Access) Act is not put at risk?
Baroness Lloyd of Effra (Lab)
My understanding is that there is a lot of to and fro, and many requests between the EU and UK of a very technical nature to allow the European Commission to make its judgment. Quite a lot of those have been published already, in the European Commission report and in the European Data Protection Board’s opinion. The process by which this is set out is already transparent and clear.
Baroness Jones of Whitchurch (Lab)
My Lords, on the assumption that we get approval on 27 December, will my noble friend the Minister move quickly to make sure, as per the economic reset with the EU, that we reduce trade barriers and boost economic growth, which has been held back in this country by Brexit for far too long?
Baroness Lloyd of Effra (Lab)
My noble friend is right that the importance of digital trade to the UK and its exposure to the EU is a very significant part of our digital trade agreement, as are the relationships that underpin this. As a testament to the way in which the reset is happening, we welcome the state visit of the German President here today.
Lord Vaizey of Didcot (Con)
My Lords, to follow up on what the noble Baroness, Lady Jones, said to the Minister, digital trade is so important. The previous Government led the way with digital trade agreements, particularly with countries such as Singapore. As chair of the UK-ASEAN Business Council, I see how important these digital trade agreements are and how the UK leads the way as a member of the CPTPP and an observer at ASEAN. I hope that the Minister will keep her nerve as we start to reset our relationship with our largest trading partner, just 20 miles across the channel—the EU.
Baroness Lloyd of Effra (Lab)
That is a very good point. I was able to discuss with my Malaysian counterpart the potential for a digital trade agreement when I was in Kuala Lumpur earlier this year. I very much hope that we can progress that to promote digital trade—and likewise with the EU. I assure the noble Lord that the Government are working extremely actively to progress the EU reset.
Lord Watts (Lab)
My Lords, is this not just another example of the disaster of Brexit, which was spelled out, in all places, in the Telegraph a couple of weeks ago, demonstrating the damage that has been done to the country? Do we not need to speed up our relations and discussions to get back to some sensible agreement with our main trading partner in Europe?
Baroness Lloyd of Effra (Lab)
My noble friend is right about the importance of making swift progress to reset the relationship to promote trade and get all the agreements in place under the EU reset, which goes from everything from energy to defence and security—all sorts of areas where we can make real progress to support the UK economy.
Online Safety Act 2023 (Priority Offences) (Amendment) Regulations 2025
Baroness Lloyd of Effra Excerpts(1 week, 6 days ago)
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Baroness Lloyd of Effra
That the Grand Committee do consider the Online Safety Act 2023 (Priority Offences) (Amendment) Regulations 2025.
Relevant document: 40th Report from the Secondary Legislation Scrutiny Committee
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, these regulations were laid before the House on 21 October this year. Before I proceed further, I draw the Committee’s attention to a correction slip issued for these regulations in October for minor drafting changes related to the date of the Sexual Offences Act 2003 in the Explanatory Notes and the order of words for the title of an offence inserted by paragraph 2 of the regulations.
The Government remain firmly committed to tackling the most serious and harmful online behaviours. This statutory instrument strengthens the Online Safety Act by designating new priority offences aimed at addressing cyber flashing and content that encourages self-harm. By doing so, we are ensuring that platforms take more proactive steps to protect users from these damaging harms.
Evidence shows that cyber flashing and material promoting self-harm are widespread and cause significant harm, particularly among younger age groups. In 2025, 9% of 18 to 24 year-olds reported experiencing cyber flashing and 7% encountered content encouraging self-harm in a four-week period. That equates to around 530,000 young adults exposed to cyber flashing and 450,000 to self-harm content. This is unacceptable.
Further, 27% of UK users exposed to cyber flashing reported significant emotional discomfort. There is also compelling evidence that exposure to self-harm content worsens mental health outcomes. A 2019 study found that 64% of Instagram users in the US who saw such content were emotionally disturbed by it. Another study in 2018 revealed that 8% of adults and 26% of children hospitalised after self-harming had encountered related content online. These figures underline that these are not marginal issues—they are widespread and deeply harmful.
As noble Lords will know, the Online Safety Act, which received Royal Assent on 26 October 2023, imposes strong duties on platforms and search services to protect users. Providers must assess the likelihood that their services expose users to illegal content or facilitate priority offences, and then take steps to mitigate those risks; these include safety by design measures and robust content moderation systems.
The Act sets out a list of priority offences for the purposes of illegal content duties. These represent the most serious and prevalent forms of online illegal activity. Platforms must take additional steps to address these offences under their statutory duties. This statutory instrument adds cyber flashing and content encouraging self-harm to the list of priority offences. Currently, these offences fall under the general illegal content duties. Without priority status, platforms are not required to conduct specific risk assessments or implement specific measures to prevent exposure to these harms; that is why we are adding them as priority offences.
Stakeholders have strongly supported these changes. Organisations such as the Molly Rose Foundation and Samaritans have long called for greater protection for vulnerable users. These changes will come into force 21 days after the regulations are made, following approval by both Houses. Ofcom will then set out in its codes of practice the measures that providers should adopt to meet their duties. Our updates to the Act’s safety duties will fully take effect when Ofcom makes these updates about measures that can be taken to fulfil the duties.
We expect Ofcom to recommend actions such as enhanced content moderation; improved reporting and complaints systems; and safety by design measures—for example, testing algorithms to ensure that illegal content is not being promoted. If providers fail to meet their obligations and fail to take proportionate steps to stop this vile material being shared on their services, Ofcom has strong enforcement powers to enforce compliance. These include powers to issue fines of up to £18 million or 10% of qualifying worldwide revenue, whichever is higher.
This statutory instrument upgrades cyber flashing and self-harm content to priority status, reinforcing the Online Safety Act’s protections. Service providers will be required to take more proactive and robust action to detect, remove and limit exposure to these harmful forms of illegal content. This will help ensure that platforms take stronger steps to protect users, reduce the prevalence of these behaviours online and make the internet safer for all. I beg to move.
Lord Addington (LD)
My Lords, I hope this is one of those occasions when we agree that what is coming here is a good thing—something that is designed to deal with an evil and thus is necessary. I want just to add a bit of flesh to the bones.
If we have regulation, we must make sure—as we are doing now—that it is enforced. I congratulate the Government on the age-verification activities that were reported on this morning, but can we get a little more about the tone, let us say, with which we are going to look at future problems? The ones we have here—cyber flashing and self-harm—are pretty obviously things that are not good for you, especially for younger people and the vulnerable.
I have in front of me the same figures of those who have experienced disturbing reactions to seeing these things, especially if they did not want to see them. Self-harm is one of those things; it makes me wince even to think about it. Can we make sure that not only those in the industry but those outside it know that action will be taken? How can we report across more? If we do not have a degree of awareness, reporting and everything else gets a bit slower. How do we make sure that everybody who becomes a victim of this activity knows that it is going on?
It is quite clear that the platforms are responsible; everybody knows that. It is about knowing that something is going on and being prepared to take action; that is where we will start to make sure not only that this is unacceptable and action will be taken but that everybody knows and gets in on the act and reporting takes place.
I could go on for a considerable length of time, and I have enough briefing to do so, but I have decided that the Grand Committee has not annoyed me enough to indulge in that today. I congratulate the Minister, but a little more flesh about the action and its tone, and what we expect the wider community to do to make sure this can be enacted, would be very helpful here. Other than that, I totally welcome these actions. Unpleasant as it is that they are necessary, I welcome them and hope that the Government will continue to do this. We are always going to be playing a little bit of catch-up on what happens, but let us make sure that we are running fast and that what is in front of us does not get too far away.
Baroness Lloyd of Effra (Lab)
My Lords, I thank noble Lords for their broad support for adding these offences to the priority offences list. This is an important step in improving the online safety regime and improving the environment in which we all use the internet, particularly children and vulnerable people. This will help fulfil the Government’s commitment to improving online safety and strengthening protections for women and girls.
On the points made by the noble Lord, Lord Addington, about tone and proactivity, it is really important that we communicate what we are doing, both in the online world and in terms of violence against women and girls in the physical world. We know that we must all do more to tackle misogynistic abuse, pile-ons, harassment and stalking, and the Government’s whole approach to tackling violence against women and girls is an active one and is something that we have real, serious goals on. We welcome everyone supporting that move forward. For example, the publication of Ofcom’s guidance, A Safer Life Online for Women and Girls, sets out the steps that services can take to create safer online spaces, and the Government will be setting out our strategy for tackling violence against women and girls in due course as part of that. I think that the publication of Ofcom’s report this morning, which sets out the activity that it has taken and will take, will help raise the profile, as the noble Lord says, about what is expected of services in terms of the urgency and the rigour with which these changes are made.
On the question of VPNs, which we talked about a little earlier, we do not have a huge amount of information or research about their use, particularly by young people to circumvent age assurance. We know that there are legitimate reasons to use VPNs, and we do not have a huge amount of evidence about their use by young people, either very young people or older teenagers. Ofcom and the Government are committed to increasing the research and evidence for how VPNs are being used and whether this is indeed a way that age assurance is being circumvented, or whether it is for what might be legitimate reasons, such as security or privacy reasons. That is an important piece of the evidence puzzle to know exactly what measures to take subsequently.
Viscount Camrose (Con)
I am particularly interested in whether it is a legitimate defence for a platform to say, “We could not have prevented this access because a VPN was in use”, and therefore whether it falls to the platforms themselves to figure out how to prevent abuse via VPNs.
Baroness Lloyd of Effra (Lab)
I think we may need to have this conversation together with Ofcom. My understanding is that doing the risk assessments and putting these offences on the priority list increases the level of risk assessment that must be done. When a platform is doing its risk assessment, it will have to take into account the way in which children, young people or other users will access the service. Thus, depending on what its service provided and how people accessed it, if that was a factor that needed taking into account, it would therefore have to take that into account in the controls it was putting in place, as a platform, on the basis of its knowledge of its user base. Thus, it would, perhaps, go to the more conservative as opposed to the more permissive end of controls. That is my understanding, and if it is not correct, I will correct it.
Likewise, the noble Lord, Lord Addington, made points about emerging technology, making sure that this measure is fit for purpose and that we keep all Online Safety Act duties, defences and coverage very much up to speed with what people are experiencing in their daily lives. Many others have raised the issue of AI chatbots, including what is currently covered and not covered under the Act. The Secretary of State has commissioned work on AI chatbot activity to make sure both that there is no gap in coverage and that we are keeping up to speed with the emerging technology.
That is an example of how we want to approach emerging technology: making sure that we are getting all of the best research and information, and, if there are gaps in any areas, plugging them. This is the approach we have taken so far, and it is one we are committed to continuing. Whether enacted through advice, guidance, codes or additional offences, all of those are open to us to take forward, whatever the technology shows.
Those were the main questions that were asked. On enforcement, the point is absolutely well made. Enforcement is good only if platforms and services know that these things will be enforced. We have been very clear that Ofcom has our backing to carry out enforcement activity. We have funded the online safety part of Ofcom year on year to ensure that it has the capacity and resources to enforce whatever it needs to enforce in this area. We are very committed to continuing to protect children online. We welcome Ofcom’s recent consultation on additional measures to build on its safety codes—including additional protections on live streaming, which many have called for, as children should not have harmful content pushed on them and should have age-appropriate experiences.
We remain committed to keeping young people safe online, and we will continue to work closely with campaigners, charities, industries and Ofcom to achieve this goal. We will also work with all civil society campaigners and those with an interest. The Secretary of State has also announced that DSIT will support an NSPCC summit at Wilton Park next year in order to bring together experts and young people to discuss the impact of AI on childhood.
Turning back to the SI under discussion, today’s update is another step towards a safer digital environment—one that protects the most vulnerable and addresses emerging risks. I thank the Committee and, on that basis, I commend these regulations to the Committee.
ExxonMobil: Mossmorran
Baroness Lloyd of Effra Excerpts(3 weeks, 2 days ago)
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Lord Fox (LD)
My Lords, this is quite clearly a blow for the area of Fife, and especially for the direct and indirect workers of the plant. Just as the noble Lord, Lord Sharpe, said, our thoughts go to them and their families as they seek to find ways of coming to terms with the blow.
The closure will see many highly qualified and specialised workers laid off at a time of severe cost of living pressures. The company has talked about supporting its employers and possible relocation available for some, but what about contractors and the wider supply chain? As far as I am aware, no task force has yet been set up to manage this, so can the Minister please update your Lordships’ House on how the wider workforce will be helped as this crisis bites? It is reported that only around 50 staff are being offered jobs, and nearly 500 miles away in Hampshire. Can the Minister confirm how many have actually agreed to relocate? What are the Government doing to protect and create highly skilled, high-quality jobs located for those who cannot move far from their homes, their communities and their wider family? More generally, much is made of the transition to net zero, which we wholeheartedly support, but there is a danger of the old jobs disappearing more quickly than the new ones are being created, and this mismatch will make growth very difficult, if not impossible.
There has, not unexpectedly, been some finger-pointing—indeed, we just saw some—trying to work out who is to blame for this. But we should understand that this plant has been in trouble and making a loss for five years. If economic and trading environments are causing the closure, both this Government and the last Government are culpable. But I also point to Brexit. All the products made at Mossmorran are exported to the EU. Can the Minister outline how much Brexit contributed to the plant’s demise? Given that there will no longer be these exports from the plant, what is the effect on our balance of trade?
This is, of course, a further blow for the Scottish economy and UK-wide manufacturing, and it comes fast on the heels of other company closures. The common denominator seems to be a combination of long-standing depressed demand alongside the policy environment—and the overwhelming issue, as noted by the noble Lord, Lord Sharpe, is the cost of energy. Energy was a problem when the noble Lord was in government and it remains a problem now. This is not to downplay today’s news confirming the £420 million a year committed to reduce electricity costs for the UK’s most energy-intensive industries—but that is jam tomorrow; it does not start until 2027.
There is a desperate need for further and more rapid intervention, as many UK chemicals operations face risk of closure before the British industrial competitiveness scheme, as it is called, comes into effect the year after next. There also remains considerable uncertainty about which businesses will benefit from this new support. Can the Minister fill us in on what the process will be for deciding which businesses and sectors qualify for this subsidy? What specific steps are the Government taking for the here and now? We understand what is happening in 2027, and we have seen the long look into the future that is called the industrial strategy, but what is happening now? We need to find a way of making sure that there is long-term investment in our manufacturing and chemicals industry.
The Scottish Government have a responsibility for the economy and jobs in Scotland, so why is there no meaningful mention of them in the Statement? Will the Minister outline what conversations were being had with the Scottish Government and when, and how the Minister sees the role of the Scottish Government going forward?
To conclude, energy-intensive industries are in decline across the UK. Every chemical business across the UK is paying more for its energy than competitors elsewhere, as was the case under the noble Lord, Lord Sharpe, as much as 400% higher than in America. Closures at Grangemouth, Prax Lindsey and now Mossmorran risk forcing downstream operators to import resources at higher cost. Britain’s once dominant chemical industry is continuing to suffer. The UK’s chemical output has reached its lowest level for a decade. The latest business survey of members of the Chemical Industries Association shows that 60% of chemical businesses report falling sales with a further 20% seeing no growth. More worryingly, many report strategic reviews.
Closures reduce our already dwindling industrial capacity and reduce our ability to deliver essential materials for our country’s critical national infrastructure, be it health, energy, food or defence. If the Government want to continue to have a chemical industry, then we need much more action to address these unsustainable costs.
The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Lloyd of Effra) (Lab)
I thank the noble Lords for their statements today, and I entirely agree that our thoughts are with the workers and the families of those affected by the closure.
While this Government inherited a precarious economic position from the previous Administration, it is imperative that we continue to move forward and pursue the right pro-innovation, pro-business policies which generate growth. We were disappointed to learn of Exxon’s announcement of the closure of its Fife ethylene plant. This follows months of engagement with the company and a commitment to explore all the opportunities to retain the site’s operations. However, it is my understanding that there was no credible buyer for the plant. Of course, if there are potential purchasers who wish to explore what is possible, the Government would be happy to work with them. We would be happy to find a solution, whether that is the ongoing operation of the plant or repurposing the site for new uses.
As noble Lords will know, the Government and ExxonMobil have been discussing the operating environment around the plant since April, and officials endeavoured to meet Exxon every week since August. Last weekend, Ministers from across government were in contact with the company to discuss this decision, and I expect there will be further conversations over the coming months. The Minister for Industry was clear that the Government are prepared to step in and support industry where it is feasible to do so, as we did with Harland & Wolff, Tata Steel and most recently British Steel. Sadly, in this instance, the Government are not able to provide support without a fundamentally sound business proposition. No intervention would represent value for money without one.
We know that it is a concerning time for those affected, which is why our focus is now on supporting the workforce. The Minister for Industry met Unite to explore options for supporting the affected employees, and Exxon is taking steps to mitigate the impact of its closure decision, as any responsible company would, with some employees being retained to support the decommissioning of the site and others being offered relocation and training packages to Exxon’s other assets at Fawley and Southampton. Discussions about the precise allocation of those roles are ongoing and I cannot confirm at this time exactly how many people have decided to make the transition to other sites. Regrettably, this falls short of supporting the entire workforce in finding new employment, which is why the Department for Work and Pensions is engaged in supporting those impacted. Officials in the department are also in contact with representatives from Fife Council and the Scottish Government and are working together on a task force to provide further support. Today, my right honourable friend the Secretary of State for Scotland met the Scottish Government and the Fife local authority to convene the first of those discussions and will continue with that task force over the coming months.
I stress that this closure is not representative of UK industry as a whole. Through our modern industrial strategy, we are channelling support to the eight growth sectors of the economy, including clean energy, defence and advanced manufacturing—all areas in which Scotland is incredibly strong. Far from being uninvestable, since July, we have seen more than £250 billion of investment committed into the UK, alongside 450,000 jobs. Only recently, we have seen further investment into AI growth zones and small modular reactors.
Both noble Lords talked about energy costs. Your Lordships know that bringing down energy costs for British businesses is a key part of our industrial strategy. Although it is important to note that electricity costs were not a major factor behind this site’s closure, we are pressing ahead with unprecedented support for our energy-intensive industries so that they can properly compete and win in the global economy. Last month, we pledged to increase the discount on electricity network charges from 60% to 90% for businesses in sectors such as steel, cement, glass and chemicals; this discount will slash costs for a whole host of businesses not just in England but across the UK. We know that around 550 of our most energy-intensive businesses will save up to £420 million a year on their electricity bills from next April thanks to this one change.
To that end, our new British industrial competitiveness scheme, announced for consultation today, will reduce electricity costs for more than 7,000 eligible manufacturing businesses. We want to save them up to £40 per megawatt hour, or up to 25%, from April 2027; that will cover the foundational and frontier areas, as defined in the industrial strategy. This will be subject to further consultation, as set out in the papers today.
On the point about engaging and working with the devolved Governments, the Scottish Government have been heavily involved in the ExxonMobil discussions, with meetings at the highest level. I thank my colleagues, both there and in the UK Government, who have been engaging on this issue for such a long time and trying to find a way forward. We will continue to work constructively together both to support the hard-working employees of the Fife plant and to ensure that they are fully supported over the coming weeks and months.
Lord Ashcombe (Con)
My Lords, last week was another sad one for the UK oil and petrochemicals industry, as well as for the company employees, contractors and those in the general supply chain who rely on it. The imminent closure of Mossmorran comes in addition to the Grangemouth and Lindsey refineries. What comes next? There is not much left.
Mr Greenwood, the chairman of ExxonMobil UK, mentioned four reasons why the plant at Mossmorran is being closed. Due to time, I will concentrate on just one: the decline in a cheap and abundant source of ethane from the North Sea. We know that there is a large untapped supply of ethane in the North Sea, but this Government have increased taxation on the producers in various ways to prohibit them making any money—making them less competitive—and have prevented any more licences being issued in this basin. This has a snowball effect of closing the North Sea down, reducing a revenue stream to the Exchequer and seeing the workforce continue to fall, as well as, by inference, increasing hydrocarbon imports from overseas where job numbers go from strength to strength.
Equally important are the significantly increasing carbon emissions on a global scale. Just because the imports arrive in the UK emissions-free does not mean that we are not responsible for the increase in emissions from our own production, which are significantly less. Production continues elsewhere in the world and its subsequent transport for our use is more emissions-intensive.
Does the Minister agree with me that this country must, therefore, ensure the continued and increased flow of North Sea hydrocarbon production, rather than having to increasingly purchase product from overseas? This would keep the significant but rapidly reducing onshore and offshore oil and gas industry alive for the foreseeable future; more importantly, it would keep the remaining jobs secure. Electricity generation, green or otherwise, will not satisfy our complete energy needs for many decades to come—if ever—so why do this Government continue to penalise this nation?
Baroness Lloyd of Effra (Lab)
We are co-ordinating the scale-up of industries that will shape the future of the North Sea, going as far as wider offshore wind, carbon capture and storage and hydrogen. The Government have committed over £9.4 billion in investment to carbon capture, with a total of £22 billion for hydrogen and carbon capture this Parliament. That is a huge, positive step for our economy and for jobs in the North Sea.
Furthermore, the clean energy jobs plan—which has £20 million of funding from the UK and Scottish Governments—will support oil and gas workers in training to access the opportunities in clean energy to create the jobs of the future. Looking at the last few years, there was a 75% reduction in oil and gas production between 1999 and 2024. So this is a very long-term trend in the availability of carbon products from the North Sea, not something that has happened just in recent times.
Baroness Alexander of Cleveden (Lab)
My Lords, I refer noble Lords to my registered interests. I welcome the Minister’s statement, in response to the noble Lord, Lord Fox, about the establishment of a task force, which has happened since the Statement was made in the other place. I declare an interest as a former Industry Minister in Scotland, where there has been experience over the last 25 years of how to respond to closures such as these. Those sorts of task forces, to work well, need to be quickly established, as we have seen in this case. However, they also need to focus as broadly as possible, including on opportunities for outplacement, retraining, preferential access to local colleges, dedicated pathways into other employment opportunities and on the future of the site itself, involving remediation and the possible identification of other investors who would be interested, if not in plastics production, then in associated activity.
For all these reasons, can the Minister confirm the breadth of the scope of the task force? Can she also confirm that His Majesty’s Government will work very closely with the Scottish Government, which have their own PACE initiative—the partnership for continuing employment—in cases such as these?
Baroness Lloyd of Effra (Lab)
My noble friend makes some very important points about the importance of swift and collaborative action, partnership with all those who can assist in supporting the workers in this situation and looking at their individual needs and the economic opportunities that are available today, and training them for the future.
She is right that the task force has been established, and my right honourable friend Douglas Alexander met with Fife Council and the Scottish Government earlier today. The Government are committed to working with them to deliver a local response and, more broadly, to mitigate the impact on workers. That will include working with the partnership action for continuing employment and looking to support the 50 employees who are going to be retained to support the decommissioning until 2028, as well as the 50 who are being offered relocation and training packages to Exxon’s other assets.
My noble friend makes a very good point about looking broadly and making sure that this is in the context of the local economy.
The Earl of Effingham (Con)
My Lords, does the Minister know any chief financial officer who talks down prospects for their company? Why does she think the Chancellor spent nine months talking down the UK economy, which has contributed to Grangemouth, Mossmorran and other factories closing down and the subsequent loss of jobs?
Baroness Lloyd of Effra (Lab)
I do not agree with that commentary on our approach to the economy. In fact, I want to take some time to talk about the positive signs in the UK economy. The UK was the fastest-growing G7 economy over the first half of the year, with cumulative GDP growth at 0.9%. The IMF forecast the UK to be the second-fastest-growing economy in the G7 in 2025 and the third-fastest in 2026. I am sure that noble Lords frequently hear the Chancellor and the Prime Minister talking about the value of the inward investment into the United Kingdom. They have been integral to securing that inward investment, as this is an extremely investable country.
Lord Teverson (LD)
My Lords, it is clearly a tragedy for the petrochemical industry in terms of this plant in Scotland. However, in a way, it is only a precursor for the tsunami that is about to happen to the steel industry if we are not careful. As a third country to the European Union—which we unfortunately are now, due to the Conservative Party—we will now face 50% tariffs on our steel industry, 80% of our exports of which go to the European Union. Can the Minister update us on what her department is doing to prevent that wiping out of the UK steel industry that is about to happen, given our third country status?
Baroness Lloyd of Effra (Lab)
The steel industry is incredibly important to the Government. As noble Lords know, the Government have taken action in respect of British Steel, and, as I outlined earlier, in respect of energy costs for the industry. My department has been engaging in discussions with EU counterparts on this to ensure that we properly understand what is going on. We will always take action to protect our industry.
Lord Sharpe of Epsom (Con)
My Lords, if no one else has another question, I will ask a very quick one. The Minister referred to £250 billion-worth of inward investment and 450,000 jobs that will be created. I do not expect her to have this information to hand, but would she be willing to commit to write to noble Lords who have participated in this debate with a list of the amounts dedicated, by whom, where and when, et cetera, particularly in reference to jobs? That is because, as we know, since the Government have taken power, 177,000 jobs have been lost.
Baroness Lloyd of Effra (Lab)
Yes, I am quite happy to write as a follow-up. I think I said £250 billion, and I originally meant to say 45,000 jobs. I apologise; that was my error—but I can follow up on that point.
Lord Fox (LD)
Just to prolong the agony for slightly longer, when the Minister was answering the noble Lord’s question on oil and gas, she came up with a long list of very creditable investments and changes that are going on. When I was asking my question, I referred to the relative speed of creating jobs versus losing them. Does she accept that it is much easier and quicker to lose jobs than to create them? It is very important that this creative process keeps pace with the destruction process, otherwise we will lose even more skills than we are already.
Baroness Lloyd of Effra (Lab)
It is indeed very important that we continue to create jobs in highly productive, well-paid sectors, and that we provide the skills and training to a broad base of young and older people to take advantage of that. Whether that is through large, single-site companies or through the plethora of SMEs that can create jobs, it is important that we continue to focus on the productivity of our economy, so I agree with that point.