Employment Rights Bill

Debate between Baroness Penn and Lord Hunt of Wirral

Committee stage
Wednesday 18th June 2025 Lords Chamber

[Baroness Penn (Con)]

My Lords, Amendment 280 is designed to address the use of substitution clauses that allow for illegal working. There are different ways of measuring it, but on some estimates there are 4.7 million gig economy workers in the UK, including around 120,000 official riders at Uber Eats and Deliveroo, two of the largest delivery companies in the country.

For years we have heard stories of labour market fraud and visa abuse committed by contractors related to those companies, and much of that abuse has come through the legal loophole created by substitution clauses. These clauses have traditionally been used to give flexibility to businesses, but in the gig economy they are being used to allow illegal working. From late 2018 to early 2019 there were 14,000 fraudulent Uber journeys, according to Transport for London. During random checks two years ago, the Home Office found that two in five delivery riders who were stopped were working illegally.

I acknowledge that some action is being taken that will address part of this issue. Ministers have said that they will consult on employment status and moving towards a two-part legal framework that identifies people who are genuinely self-employed. I support that ambition, but as someone who worked on the original proposals in this area that stemmed from the Taylor review, I also understand the complexity of resolving this, and I fear that it could end up being put in the “too difficult” pile in Ministers’ in-trays.

The Government have also brought forward amendments to the borders and immigration Bill to include a legal requirement for organisations to carry out right-to-work checks on individuals they employ under a worker’s contract or as individual subcontractors, and for online matching services that provide details of service providers to potential clients or customers for remuneration. What are the timescales for the consultation and the secondary legislation to bring those measures into force? On my understanding, these provisions will not extend to the use of substitutes, meaning that this loophole will remain.

Amendment 280 seeks to go some way to addressing this through the introduction of a comprehensive register of all dependent contractors. Such transparency would help to ensure that employment rights are upheld and pay is not suppressed through illegitimate competition, and would also support the enforcement of right-to-work checks. An alternative approach would be to ban substitution clauses altogether, or at least for those companies and sectors where abuse is the most prevalent—or, as Amendment 323E in a later group from the noble Lord, Lord Berkeley, seeks to do, restrict their improper use.

Given that substitution clauses have played an important part in case law on determining employee or worker status, this could have broader implications, so I have focused on transparency as a first step. But I would be interested to hear the Minister’s view on removing or restricting the use of substitution clauses and whether that is preferable to a register delivering transparency, for example.

A further alternative would be to introduce right-to-work checks for substitutes by the original engaging business. While this was deemed to be out of scope for this Bill in the Commons, I had hoped that the Government’s amendments to the borders Bill would fill this gap. However, unless I have misunderstood—I would be grateful if the Minister can clarify this for me—their approach leaves this loophole untouched. The impact assessment for the Government’s amendments to the borders and immigration Bill reflects the harms that illegal working has on our economy. It says:

“Illegal working creates unfair competition, negatively impacts legitimate businesses, and puts additional pressure on public services. A rapid growth has been observed in the UK in modern labour market models where businesses can currently engage workers without the requirement to complete right to work checks”.


Without further action to address the abuse of substitution clauses, as the App Drivers and Couriers Union has said:

“Unfortunately there is this loophole that allows some bad people to come through. They are not vetted so they could do anything”.


The Government need to take action to guarantee fairness and justice in our labour market. A register of dependent contractors provides a way to resolve this abuse and hold big employers in the gig economy to account. I beg to move.

[Lord Hunt of Wirral (Con)]

My Lords, I congratulate my noble friend Lady Penn on tabling this important amendment. The requirement for certain company directors to maintain and report a register of dependent contractors under substitution clauses is a measure that would bring much-needed transparency to a complex area of employment. It recognises the evolving nature of work arrangements in sectors such as courier services and taxi operations. Of course, there are compliance burdens associated with maintaining such registers, especially for large companies operating over multiple jurisdictions. Additionally, data protection considerations must be carefully addressed to ensure sensitive personal information is handled appropriately and securely. These are important factors that require careful balancing against the benefits of increased transparency. We look forward to hearing the Minister’s response.

[Lord Leong (Lab)]

My Lords, I thank the noble Baroness, Lady Penn, for her Amendment 280 and for meeting with my noble friend Lady Jones and me last month to discuss this very important issue.

I reassure the noble Baroness that the Government are already taking action to tackle the main risks that arise from substitution, including illegal working. As she mentioned, substitution is a complex area on which we are still gathering data.

An ONS online survey of around 10,000 businesses from across the UK, published this month, found that close to 3% of UK businesses use substitution clauses. While we do not know the number of substitution clauses used in the gig economy, we know that this could impact a large number of individuals. Although estimates of the number of gig economy workers vary vastly in various surveys, from around 500,000 to 4.4 million people—the noble Baroness mentioned some 4.7 million people—the CIPD finds that roughly 75% of those in the gig economy consider themselves to be self-employed.

We have introduced an amendment to the Border Security, Asylum and Immigration Bill, as was mentioned by the noble Baroness, to extend the scope of employers required to carry out right-to-work checks to those who engage limb (b) workers or individual sub-contractors, such as those working in the gig economy. This requirement will cover those working as substitutes.

We understand the complexity of these issues, and of employment status more widely, and that is why we have committed to consult in detail on a simpler framework for employment status. Comprehensive consultation will better account for the full range of today’s employment relationships, while addressing the minority of employers who will seek to avoid legal obligations.

We were clear that some reforms in our plan to make work pay will take longer to undertake and implement. We do not have a set timeline for consulting on employment status at this point, and I assure the noble Baroness that we will keep her up to date as and when this happens. We understand the complexity of employment status, as I mentioned earlier, and we are definitely committed to consulting in detail. Comprehensive consultation will better accounts for the full range of today’s employment relationships, while also addressing the minority of employers who will seek to avoid legal obligations, as I mentioned.

The noble Baroness’s amendment would create significant additional reporting burdens for businesses and would not necessarily change how those businesses use substitution clauses, as I mentioned in my earlier speech. I therefore ask the noble Baroness, Lady Penn, to withdraw Amendment 280.

Financial Conduct Authority: Financial Inclusion

Debate between Baroness Penn and Lord Hunt of Wirral

Tuesday 22nd March 2022 Lords Chamber

[Baroness Penn (Con)]

My Lords, I think a noble Baroness before referenced the credit union sector. It does excellent work in supporting people with access to low-cost credit. I am sure that it is part of our Financial Inclusion Policy Forum, where we bring together representatives from industries of all sorts to look at what more we can do to ensure financial inclusion in this country.

[Lord Hunt of Wirral (Con)]

Would my noble friend the Minister like to reflect for a moment on the excellent work of the Financial Inclusion Commission, which has put forward a plan to ensure that the regulator has a “must have regard” provision to tackle financial inclusion? Will she and her colleagues sit down with that commission and put together an action plan that can see real progress in tackling the issues facing financial inclusion?

[Baroness Penn (Con)]

My Lords, the Government are absolutely committed to taking action on financial inclusion. That is why we have the Financial Inclusion Policy Forum that brings together industry, consumer groups, the regulator and the third sector. We publish an annual report on the Government’s work on financial inclusion, which sets out the broad range of initiatives and ongoing work to support the sentiment that my noble friend expressed about taking action in this area.

Cash Infrastructure

Debate between Baroness Penn and Lord Hunt of Wirral

Monday 19th July 2021 Lords Chamber

[Baroness Penn (Con)]

My Lords, the Government believe that we need to make digital payments as accessible as possible, but we also acknowledge the continuing role of access to cash, particularly among some of the groups that the right reverend Prelate mentioned. That is why, as part of the consultation, reasonable access considerations will be given to the FCA to regulate, as I have said, so that people can have access to that cash. LINK, the UK’s largest ATM provider, has taken action to protect the distribution of free-to-use ATMs, including in deprived locations and more remote locations.

[Lord Hunt of Wirral (Con)]

My Lords, as an independent non-executive director of LINK, I recognise the valuable work being done to help ensure that cash remains readily available right across the UK. What analysis have the Government made of the declining acceptance of cash by retailers, particularly in the hospitality sector, and are any measures planned to reverse that apparent trend?

[Baroness Penn (Con)]

My Lords, analysis has been done by the Bank of England which showed that 40% of people had visited a store that did not accept cash in the six months prior to January 2021. That is an increase on the January 2020 figure of around 15%. We are taking forward several measures; as part of this consultation, we will help businesses continue to accept cash by ensuring reasonable access to cash depositing facilities, as well as cash ATMs and withdrawal facilities. There was also an amendment to the Financial Services Act 2021 to allow for cashback without purchase, which will also support local cash recycling and continued cash acceptance.

Business and Planning Bill

Debate between Baroness Penn and Lord Hunt of Wirral

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Tuesday 14th July 2020 Lords Chamber

[Baroness Penn (Con)]

My Lords, the Government wholly support the intention behind the amendment to enable socially distanced outdoor performances. I assure the noble Baroness, Lady Jones, that, although I am not my noble friend Lord Greenhalgh, I have a great admiration for our cultural sector and for the performing arts.

I am delighted to refer my noble friend Lord Hunt to the Culture Secretary’s announcement last week that, from Saturday 11 July, theatres, dance and music have been able to restart as long as they are Covid secure, take place outside with a limited and socially distanced audience, and have the appropriate approvals from local authorities. To support our theatres and performance venues to get up and running safety, we have published new government guidance that provides detailed advice on how to keep all those working in the performing arts and audiences safe.

My noble friend Lady Anelay asked about that guidance. We have worked with the sector through the Cultural Renewal Taskforce and the entertainment and events working group to produce it. We will continue to engage with the sector on the basis. My noble friend raised advanced notice. So far we have published a five-stage road map, on which we are at stage 3, so venues and others can plan for future stages in advance of them being introduced. That guidance will evolve. We are working on some of the science behind safely reopening some of these venues. As that progresses, we will update the guidance in line with consultation with the sector.

Since outdoor performances are now allowed, local authorities can already issue licences where appropriate for such events under the provisions of the Licensing Act 2003 and existing authorisations will not have lapsed, the intention behind my noble friend’s amendment has been wholly achieved.

My noble friend made two further points in relation to his amendment. The first was that the inclusion of the amendment would signal the Government’s commitment to this vital sector. I completely agree with my noble friend that our creative arts are an intrinsic part of what makes us a nation. I hope noble Lords will agree that there are many routes by which the Government can demonstrate their support for the sector. The announcement of the £1.57 billion of support—the largest ever one-off funding package for the sector—demonstrates that commitment.

That funding will also be essential to address the points raised by my noble friend Lord Hunt and the noble Lords, Lord Kennedy and Lord Clement-Jones, among others, about support for freelance workers and others in the sector. It will enable organisations to resume cultural activity, albeit in a socially distanced manner, which will increase employment opportunities for freelancers. That is in addition to funding announced by Arts Council England in March of £140 million for artistic organisations and £20 million for individuals, including self-employed practitioners, to continue their craft. More than 10,000 individuals and organisations have been successful in applying for this emergency funding.

My noble friend also sought reassurance on the legislative underpinning for the reopening of outdoor performances, as did the noble Lord, Lord Clement-Jones, and the noble Earl, Lord Clancarty. This amendment is not needed to allow outdoor performances to take place, even in venues where they do not already take place. Local authorities can license outdoor performances already; this is underpinned by legislation in the Licensing Act 2003. I hope noble Lords will agree that it is not good legislative practice to duplicate this provision through additional legislation. It might also be worth noting that we are not planning to put in place underpinning legislation for the reopening of every sector of our economy, however significant the default is that those sectors should be open and that is what should be in place.

I hope that this addresses most of the points raised by noble Lords. I apologise to the noble Earl, Lord Clancarty, for being unable to hear part of his contribution, particularly about the role of local councils, due to technical difficulties. We will of course continue to engage, but on the point of legislative underpinning compared to this Bill, we are not aware of any representations, for the process of applying for temporary events notices for example, which in any case is a shorter timescale than pavement licences, which are dealt with in the Bill. For these reasons, I am unable to accept this amendment, and therefore I hope that my noble friend can withdraw it.

[Lord Hunt of Wirral [V]]

My Lords, I am very grateful to my noble friend Lady Anelay of St Johns, the noble Baronesses, Lady Jones of Moulsecoomb and Lady Bowles of Berkhamsted, the noble Lords, Lord Clement-Jones and Lord Kennedy of Southwark, and the noble Earl, Lord Clancarty. We have spoken with one voice, and I greatly welcome the Minister’s commitment to our intention. As she said, legislative underpinning is the key. We are providing the hospitality and construction sectors with that legislative underpinning. The performing arts deserve similar recognition. I will return to the subject, but in the meantime, I beg leave to withdraw my amendment.