Financial Services and Markets Bill [HL]

Lord Ashcombe Excerpts

Committee stage
Monday 6th July 2026 Grand Committee

[Lord Hunt of Wirral (Con)]

My Lords, in moving Amendment 142A and speaking to the other amendments in this group, which I also support, I am asking for the FCA to be able to develop a dedicated division to undertake its regulatory activities regarding wholesale market participants.

This amendment is all about ensuring that in what is a highly competitive global marketplace the FCA can balance its priorities and resources effectively to benefit the consumer or clients who use them in those markets that the FCA regulates. The FCA’s protection of the individual consumer is rightly prominent, but businesses that are customers of wholesale markets, such as our world-leading London insurance market, require a very different level of protection. Currently, the definition used by the FCA is very unclear and does not distinguish between these two very different sets of needs.

I declare my long-standing interest in financial services Bills over the last 50 years, particularly as a practising solicitor in the City of London and a partner in the firm DAC Beachcroft LLP. I have slowly but surely seen the evolution of regulation, but I am concerned that it is now inhibiting the growth of what is for us one of the great global centres, particularly for insurance. However, the definition of wholesale does not just apply to insurance; it applies to other aspects of financial services as well. The FCA is well aware of the issue. Indeed, it has been raised actively with the FCA over the last few years and there have been commitments to action. However, sad to say, progress is not being made. The FCA appears to be struggling with the definition of a retail consumer and has not found the best way forward.

Once again, we rely on our Select Committee to highlight the issue. The cross-party Financial Services Regulation Committee identified this as an issue, finding in its report last year:

“The FCA does not do enough to distinguish between firms that cater to wholesale and retail markets in its regulation and supervision which … imposes unnecessary burdens and frictions on firms … These issues have fuelled an increase in bureaucracy and imposed significant monetary and resource demands on firms”.


Witnesses to that Select Committee gave key examples. They show that wholesale and retail markets serve fundamentally different customers. Retail regulation is designed to protect individual consumers, whereas wholesale markets are primarily used by professional investors, insurance firms, banks, pension funds and corporate entities. The London insurance market deals almost exclusively with corporate clients, but the regulations take a one-size-fits-all approach, applying consumer-focused rules to firms and activities for which they were never really intended.

We have a situation where pet insurance is essentially regulated in the same manner as marine or aviation insurance. Policies and services delivered in the London market are bespoke to the individual client or individually negotiated and tended, where there is no evidence of this type of market failure. They are not unit-based commoditised products that are offered within the retail market. The FCA’s implementation of what is described as the consumer duty has introduced considerable uncertainty for domestic and international firms operating in the London market. This uncertainty is driven by a lack of clarity on the FCA’s expectations as to how firms should comply with the consumer duty, including which markets and consumers it applies to.

I believe, therefore, that a dedicated wholesale division would help to ensure that regulation is proportionate to the sophistication of market participants. That is why I feel so strongly that this amendment and my noble friend Lord Ashcombe’s amendment should be contained in the Bill. I hope that the Minister will be able to address this issue for the first time as a Minister on a financial services Bill, recognising that, at the moment, we are dealing with two separate markets that are merged under the consumer duty, which is wholly inappropriate. I beg to move.

[Lord Ashcombe (Con)]

My Lords, I declare my interest as an employee of Marsh, which is an FCA-regulated firm. I shall speak to Amendment 142C in my name, which seeks, in essence, to achieve something modest but necessary: equipping the regulator with a clearer and more effective framework within which to operate.

I am—as, I suspect, other noble Lords are—unequivocal in my support for well-judged regulation. It is the foundation of consumer protection, market integrity and London’s standing as an international global financial centre, particularly in insurance, as my noble friend Lord Hunt mentioned. However, the position in which we find ourselves today is one not of insufficient regulation but of fragmentation, with a system that in parts lacks clarity and coherence.

At present, the FCA operates without a clear statutory distinction between retail and wholesale clients. The distinction between wholesale and retail markets is not academic; it is fundamental, particularly in insurance. Retail regulation exists to protect individuals and small businesses. Wholesale markets are, by contrast, the domain of larger and corporate entities. These participants are not passive consumers. They are typically active, informed buyers engaging in complex and often bespoke transactions, as I said on Monday last week. This is very much in line with my noble friend Lord Hunt’s Amendment 142A, to which I have added my name.

This situation leads to a consequence: a degree of inconsistency that is, frankly, difficult to justify. Businesses of broadly similar scale and sophistication can find themselves subject to different regulatory treatments depending on the regime applied or the particular lens through which they are viewed. That uncertainty serves no one well. It imposes a cost on, first, firms, which must devote increasing resource to navigating overlapping and at times contradictory interpretations, and, ultimately, on consumers and smaller businesses, which bear that burden through higher costs and reduced access to services.

There is, however, a straightforward solution. Where my amendment takes that further than my noble friend’s is as follows. A turnover threshold of £6.5 million already exists in statute and is used by the Financial Ombudsman Service to reflect the size of companies. It reflects a determination made by Parliament of the point at which a business can reasonably be expected to possess a degree of financial sophistication and resource, and it could easily be adopted by the FCA.

My amendment does not seek to innovate for innovation’s sake; rather, it seeks to bring coherence by anchoring the distinction between retail and wholesale clients to that already established threshold. In doing so, it would provide the regulator with a clear statutory direction. It would also introduce a necessary discipline: that retail-style protections should not be applied to wholesale clients unless there is a demonstrable and proportionate case for doing so.

This is not about weakening regulation; it is about smart regulation. It is a call for regulation that is properly targeted and grounded in the realities of the market. This matters because we must allow the FCA to focus its efforts where they are most needed, which is on genuine customer protection for individuals—you and me when we are purchasing insurance, for example—rather than dispersing them across forms of compliance that add bureaucracy cost without delivering commensurate benefit.

There is a genuine competitive point here too. Post Brexit, we have the chance to move faster than Europe, but we can do that only if the industry has certainty. Businesses need to know where they stand. They cannot plan investment or hire teams based on regulatory guidance that shifts depending on whom you talk to and when. They need law. My amendment offers a measure of that certainty. It would reduce unnecessary friction and support the FCA in meeting its secondary objectives of growth and competitiveness, and it would do so without in any way diminishing the protection afforded to those who genuinely require it. This is a measured and pragmatic proposal that respects the importance of regulation while seeking to improve its application. I support the other amendments in this group.

Financial Services and Markets Bill [HL]

Lord Ashcombe Excerpts

Committee stage
Wednesday 1st July 2026 Grand Committee

[Lord Holmes of Richmond (Con)]

My Lords, what a pleasure it is to follow my noble friend Lady Neville-Rolfe. I agree with everything she said, with all the principles she set out and with the amendments in this group.

I shall speak to Amendment 106 and the other amendments in my name. We are asking a lot of our financial regulators and it is only right that we offer help in the Bill. When we come to the Minister’s response —I do not want in any sense to pre-empt him—there may be comments around the amendments being overly prescriptive. I suggest that these amendments do not ask for prescription but, in fact, deliver clarity and, in a sense, are variously helpful to our financial services regulators.

My amendments seek to offer that help but also, as my noble friend Lady Neville-Rolfe said, to assist in driving that high-performance culture. Our regulators are well-regarded around the world. That is about high performance, but high performance in its turn is about continuous development and improvement. I think that this Bill can assist in that purpose.

In essence, this is all about the “E”s in this group: efficiency, effectiveness and economic activity. It is often said that delay defeats equity. In this instance, delay defeats economic activity and economic growth. It frustrates small, medium and larger businesses in what they are trying to do right across the United Kingdom economies. I believe that this suite of amendments offers clarity to the regulator and that, through that clarity, the regulator can give the right direction and the right support to all our businesses to do what they do best, which is to create economic activity and drive and deliver economic growth. I look forward to the Minister’s response.

[Lord Ashcombe (Con)]

My Lords, I declare my interest as an employee of Marsh, an FCA-regulated entity. These amendments in the names of my noble friends Lady Neville-Rolfe, Lord Altrincham and Lord Holmes concern Clause 21, which I very much welcome in principle. The improvements to regulators’ approval timelines are a positive step, as are the powers within the clause that enable the Government to amend those timeframes over time. In effect, the Bill already recognises the need for a mechanism to drive improvement. However, the evidence suggests that we can and should go further. The fact that regulators have consistently met their existing targets—targets that have remained largely unchanged for some 25 years—indicates that there is clear scope for more ambitious deadlines.

These amendments are therefore designed to embed a culture of continuous improvement, as referred to by my noble friend Lord Holmes. They would ensure that any future changes to the timeframe set out in Clause 21 could move in only one direction, towards faster decision-making. Moreover, where regulators have consistently met revised targets over a period of two years, the Treasury would be required to reduce those timelines further. In doing so, we would place a statutory obligation on the system to evolve and improve. This matters greatly for the competitiveness of the United Kingdom, particularly for the insurance market in which I work. The speed at which regulators handle authorisations, variations of permission and approvals for senior managers has a direct impact on the ease of doing business. These processes define many firms’ day-to-day interactions with regulation and shape broader perceptions of our market. Firms today have choices about where to deploy capital, where to grow and where to locate talent. A regulatory system that is clear, predictable and timely is a key part of that decision-making calculus.

The UK must offer a compelling proposition. There are many other places to go. Evidence from the London Market Group reinforces this point. A recent survey of firms regulated by the FCA and the PRA shows that both institutions are respected with strong overall scores, yet concerns remain. More than half of firms believe that aspects of the FCA’s approach negatively affect the attractiveness of the London market, and nearly nine in 10 highlight slow approvals for senior managers as having a strong detrimental impact on their operations. Improving timelines is not about reducing standards; it is about ensuring that our system supports growth, innovation and competitiveness. These amendments help to achieve just that.

[Lord Bridges of Headley (Con)]

My Lords, I should like to speak briefly and, in so doing, declare my interest as an adviser to and shareholder in Banco Santander. I very much support these amendments. I think that we would all agree that we want our regulations and the entire process to be simple and robust, as that is the bedrock of a competitive global financial centre. I do not think that anyone here is arguing for a weakening to the extent that it would undermine confidence in the market, which is absolutely critical.

To support what has just been said, I draw your Lordships’ attention to a study that TheCityUK brought out a few years ago—I think in 2023. It highlighted in its survey concerns among those in the City about the speed of regulatory requirements. If I am reading it right, of those who responded to the survey and were undergoing FCA regulatory approvals, 92% were experiencing delay. If you look at the views on the opaqueness of the systems, which indeed adds to uncertainty and undermines investor confidence, an enormous percentage—almost 100%—saw the system as opaque or somewhat opaque. If one then looks further on in this study at the perceived overall impact that the efficiency of the regulators’ authorisation processes had on the attractiveness of the UK as a place to establish and do business, in terms of the FCA, if my maths serves me right, almost 90% saw it as detrimental or somewhat detrimental to the UK’s attractiveness.

I am sure that the FCA and others are doing their best to solve this issue, but these amendments would do a lot to add pressure to that process and would strengthen the resolve within the system to address what is a clear need if we are to build on the competitiveness of London as a financial centre.

--- Later in debate ---

[Lord Stockwood (Lab)]

I understand that the regulator does not have the power to increase deadlines without our consent.

[Lord Ashcombe (Con)]

The wording in the Bill is “changing”, so it can go up or down, but we are asking for it to be reduced. That is significantly different.

[Lord Stockwood (Lab)]

The noble Lord makes an important point, but the regulator does not have that power. Only the Treasury can grant that power to increase the timelines.

[Lord Ashcombe (Con)]

Then the Treasury can do it, but it should be down and not up.

[Lord Stockwood (Lab)]

I think this requires some further detail. It is an affirmative power that the Treasury has to regulate, but I will write to the noble Lord in full to make sure that he understands that we are taking this issue seriously.

I turn to Amendment 151 and thank the noble Lord, Lord Howard, for raising this. I know that it reflects a long-standing frustration that credible firms, particularly those led by individuals already known to the regulator, may still face lengthy authorisation processes that can delay market entry and inhibit innovation and growth. However, while the previous approval and track record of senior individuals is clearly relevant to the regulator’s assessment, authorising a firm is not simply a matter of approving the people who run it. The regulators must assess the firm as a whole, including its business model, governance, systems and controls, and whether it is capable of operating safely and in the interests of its customers.

The Government recognise the importance of timely and effective authorisation processes, especially for new firms. This is why the Government are shortening the deadlines for new firm authorisation applications through this Bill. It is also why the Government are taking steps to establish a provisional licences regime, to reduce the barriers that firms face when seeking FCA authorisation and to help them get up and running faster. The challenges that firms face when seeking authorisation are real, and I am happy to discuss that further with the FCA, but imposing a statutory requirement on the Treasury to undertake such a review is disproportionate and not the right way to address them. As I committed to the noble Lord in our meeting prior to today, I will talk to the FCA about this and how it will ensure that this process is sped up.

I fully recognise the concerns that noble Lords have raised about delays, responsiveness and the need for an approvals regime that supports growth and competitiveness. The Government are actively addressing these through the shortening of a range of statutory deadlines in the Bill, in a way that is targeted, proportionate and will ensure competitiveness without compromising the rightly high regulatory standards that firms must meet to operate in the UK. I therefore ask the noble Baroness to withdraw Amendment 105.

Register of Overseas Entities (Protection and Trusts) and Limited Liability Partnerships (Application of Company Law) (Amendment) Regulations 2026

Lord Ashcombe Excerpts

Tuesday 30th June 2026 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Business and Trade (Lord Leong) (Lab)]

My Lords, these regulations will make targeted and technical amendments to strengthen the operation and transparency of the register of overseas entities, which I will refer to as the ROE. They will also correct a technical issue relating to limited liability partnerships, which I will refer to as LLPs.

The Government remain committed to improving the transparency of beneficial ownership as part of our efforts to tackle economic crime while ensuring that there are appropriate safeguards for sensitive personal information. Noble Lords will be aware that the ROE, established by the Economic Crime (Transparency and Enforcement) Act 2022, is a key part of that framework. It is a public register requiring overseas entities that own or purchase land in the United Kingdom to disclose information about their beneficial owners or managing officers to Companies House.

The register plays an important role in exposing ownership structures and supporting efforts to combat illicit activity. Information on the ROE has been used by law enforcement agencies, journalists and others investigating corruption, money laundering and assets held by sanctioned individuals. Last year, the Government increased public access to trust information on the ROE through the launch of the trust disclosure service on 31 August. The service allows members of the public to apply to Companies House for access to trust information held on the register. Applicants must provide their own details, together with the overseas entity’s name and identification number. While this information is publicly available, applicants must also provide the name of the trust they wish to investigate. However, the trust’s name is not publicly available on the register.

In addition, where an application relates to trust information involving a person under the age of 18, the applicant must demonstrate a legitimate interest. This requires evidence that they are investigating money laundering, tax evasion, terrorist financing or sanctions breaches. Where legitimate interest cannot be demonstrated, all associated trust information is withheld, including information relating to adults. These requirements can create barriers to access and limit the effectiveness of the service. This instrument will therefore make two targeted changes to improve public access to trust information and ensure that the service operates as intended.

First, it will remove the requirement for applicants to provide the trust name when requesting information. This addresses a significant barrier, as many applicants are unlikely to know that information, resulting in applications being rejected. Secondly, the instrument will change how information is held where a trust involves a person under the age of 18. Where legitimate interest is not demonstrated, Companies House will be able to disclose trust information relating to adults while continuing to withhold information relating to the individual under 18. This will ensure that access is not unnecessarily restricted simply because a minor is connected to the trust. Information relating to those under 18 will continue to require a legitimate interest before it can be disclosed. Taken together, these changes will increase transparency and public scrutiny while maintaining appropriate protections for minors.

The instrument will also make targeted improvements to the ROE protection regime by simplifying the process for removing a residential address from the public register. Currently, individuals may apply to Companies House to have their home address removed, but they must provide supporting evidence. This protection regime helps safeguard individuals who may face the risk of violence or intimidation if their personal information is publicly available.

These regulations will remove the requirement to submit supporting evidence when applying to remove a home address from a public ROE. In most cases, the register can already verify whether an address is residential. The change therefore removes an unnecessary administrative burden. The regulations will also require applicants to provide a replacement service address for publication on the register, except in limited circumstances.

Finally, the instrument will make a limited technical correction to the LLP framework. A requirement to provide additional address information was inadvertently introduced ahead of schedule; these regulations remove that requirement for now. It will be reinstated once the necessary systems are in place for both companies and LLPs. Work to achieve that is already under way. In the meantime, other address information will remain publicly available.

Taken together, these are sensible and proportionate amendments. They improve the transparency and operation of the ROE while making a necessary technical correction to the LLP framework. I thank noble Lords in advance for their contributions and will endeavour to address in my concluding remarks the points that they may raise. I am grateful for the support shown across the House for these regulations. I beg to move.

[Lord Ashcombe (Con)]

My Lords, I welcome the opportunity to speak to these regulations, which form part of the ongoing work to strengthen and refine the register of overseas entities, a register introduced by the Conservative Government to bring greater transparency to overseas ownership of UK land and to protect our economy from illicit finance. The instrument before us makes targeted and practical improvements to ensure that the register continues to operate effectively, balancing transparency with the proper protection of personal and sensitive information. These are measured and proportionate adjustments that respond to operational experience and ensure that the system remains robust, fair and fit for purpose.

As the Minister has outlined, the purpose of the register is to increase transparency around the beneficial ownership of overseas entities that hold land in the United Kingdom and to strengthen the UK’s defence against illicit finance. The framework for the register, including the treatment of trust information, was designed to balance two important principles: first, transparency, to ensure that overseas ownership structures cannot be used to conceal criminal activity; and secondly, privacy and proportionality, particularly in relation to sensitive trust data and information involving minors.

Since the register came into force, operational experience has highlighted several areas where the legislation could be improved to ensure that the system functions as intended. These include: first, the requirement to provide the name of the trust when applying for trust information, which in some cases risked revealing personal or sensitive details; secondly, the rules governing access to trust information where minors are involved, which were found to be overly restrictive; and thirdly, the administrative burden placed on individuals seeking to remove their home address from the public register, even where Companies House could verify the information internally.

The regulations before the Grand Committee today are intended to address these practical issues. They refine the balance between transparency and privacy; ensure that sensitive information, particularly relating to children, is handled appropriately; and streamline processes where the register already has the means to verify information. Taken together, these amendments represent a continuation of the work begun when the register was created, strengthening its operation, improving its accuracy and ensuring that it remains a robust tool within the UK’s wider economic crime framework.

[Lord Fox (LD)]

My Lords, it is a pleasure to follow the noble Lord, Lord Ashcombe, for the first time, I think. I welcome him to the wonderful world of economic crime. We are history-makers today, in that this is the first 11 am Tuesday session. It is a welcome change to the way in which we do business, making constructive use of the time we have. I look forward to lots of 11 am sessions going forward.

As both noble Lords have said, tackling economic crime and financial security are vital for the economy. I was one of the people who worked on the two economic crime Bills brought forward by the previous Administration. There was a collective effort by all parties in the House to try to deal with some of the most pernicious elements of the economic crime going on in our country.

As the Minister said, the register of overseas entities is an important step in improving beneficial ownership transparency, and we welcome any measures that make it work better in practice. As both speakers said, there are three elements to this statutory instrument. The first is to make trust information held on the register of overseas entities easier to access by removing the requirement to provide a trust name, as the Minister said, and allowing disclosure of non-minor information, even when a trust includes children. There was quite a lot of debate on this during the passage of the Bill, and this measure gets the balance right, I think, based on my rather sketchy memory of that debate.

The second element seeks to simplify the process, removing residential addresses from the public register. This is an important service for people who feel threatened or have an element of public life, but it will be important that Companies House applies the evidence properly and does not allow people to remove themselves from the register for non-real or suspicious reasons. At some point it would be useful to get a written response explaining what processes would be required to ensure that this streamlined process is not used by criminals or people seeking to hide their identity.

The third element is the temporary removal of the recently introduced LLP address-reporting requirement. The Minister said that it was prematurely introduced and that Companies House systems need to be upgraded in order to process this information. This causes some concern. The temporary removal of the LLP address-reporting requirement is worrying. The stated reason is that the systems are not yet ready, but it raises a broader question in my mind, which we referred to a lot during debates on the legislation, about the pace and resourcing of the change process going on in Companies House.

Identity verification for company directors became a legal requirement only in November 2025, and Lib Dem colleagues had previously raised concerns about the readiness and security of the One Login platform underpinning these checks. The Government have to set out a clear timetable, which I hope will binding, about when these LLP reporting requirements will be reinstated, and ensure that Companies House receives the investment and support it needs to deliver the reforms that Parliament has already passed.

During the various discussions on the two economic crime Bills, we had updates from Companies House on the transformation it would need to undergo to be able to take on the new responsibilities that the Bills, now Acts, were placing on its shoulders. It was clear that the organisation had a huge cultural change requirement. Of course, some increased resources were made available, but it is a bit concerning that this cultural change might have paused or stalled. Perhaps it is time for interested parties to have an update from Companies House, either in person or virtually, on both its general upgrading of capabilities and the progress of the One Login process.

More broadly, the register of overseas entities is only as effective as its enforcement. We Lib Dems have long called for properly funded enforcement agencies to hold financial criminals accountable—they have huge resources at their disposal—and for the UK to work hard to close further economic crime loopholes that allow corrupt money to flow through British property and company structures. We also reiterate our call—we would never miss the opportunity to do so—for British Overseas Territories to meet the same transparency standards as the UK mainland.

Financial Services and Markets Bill [HL]

Lord Ashcombe Excerpts

Committee stage
Monday 29th June 2026 Grand Committee

[Lord Ashcombe (Con)]

My Lords, I declare my interest as an employee of Marsh, the insurance broker regulated by the FCA. A number of amendments in this group discuss the downgrading of the “have regard to” requirement for proportionality, which would be a backward step. At a time of intense global competition, the Bill should strengthen proportionality, not weaken it. These amendments do that by replacing Clause 17’s downgrading provisions with a clearer, more robust and more meaningful principle, based on the distinction between wholesale and retail markets.

There remains a clear need for a better balance between these two sectors. Evidence supports this. A survey of chief risk officers conducted by the City of London Corporation identified simplification of regulation as the single most important step that regulators could take to foster growth and innovation. Similarly, a recent Prudential Regulation Authority survey showed that fewer than 60% of respondents believe that its current approach to proportionality makes the UK a more attractive place to do business, with most of the remainder expressing neutrality. That is hardly a vote of confidence.

In practice, the current one-size-fits-all approach is flawed. London’s world-leading wholesale insurance market is increasingly subject to rules designed for retail consumers. These regimes impose additional compliance burdens and costs, yet offer little meaningful benefit to sophisticated corporate clients, who require flexibility to negotiate bespoke arrangements tailored to their risks. This is what I have spent my working career doing, and I have never dealt with retail consumers, other than being an insurance buyer myself. There is a massive difference between the companies I advise and seek insurance for and the consumers such as me. Indeed, their premiums are often significantly larger than what I am trying to insure. The two entities should not be regulated by a one-size-fits-all regime.

The Financial Services Regulation Committee has highlighted this issue, noting that failure to distinguish between wholesale and retail drives bureaucracy and costs. Evidence from the London Market Group revealed that one UK broker, for example, employs far more compliance staff domestically—almost four times more—than in the EU on a proportional basis. Stronger proportionality would not weaken consumer protection; it would enhance it, allowing regulators to focus on where risks are greatest. In short, we should seize this opportunity not to weaken proportionality but to make it work properly for growth, innovation and the effective protection of consumers.

[Baroness Kramer (LD)]

I very much support the two amendments of my noble friend Lady Bowles. There is often an assumption that those of us who feel that regulation plays an important role have no instinct or desire to see proportionality in place, which could not be more untrue. My history is as a commercial banker, back in the days when we used to participate intensively in writing the loan documents and creating the covenants associated with our lending, whether to small companies or to some of the largest on the globe. Frankly, covenants that were off the shelf were completely inappropriate for providing the protection we needed in many cases. They were just useless exercises in paperwork for the companies involved. We used to reshape the loan agreements on that basis and, frankly, it worked exceedingly well.

When I look at the amendments, I am glad that proportionality is being recovered from the scrapheap that would result from Clause 17. That is important, and the way that my noble friend Lady Bowles, framed it is particularly significant. Both for the PRA and the SRA, the focus is proportionate to the benefits expected to result from the imposition of the burden or restriction, recognising the difference in size, nature and objectives. I agree with her that this really needs to be considered through the lens of genuinely sustainable—as in durable as well as environmental—growth. That is a very important addition to the discussion.

I am disturbed by Amendment 81. I am not disturbed by most of it, but when I read

“proportionate to that level of risk and whether the burden or restriction enhances UK international competitiveness”,

I begin to get somewhat queasy, because the lowest common denominator is not where we should be headed. We need to genuinely assess risk—the cost of dealing with and understanding it—in a very direct way. I have always thought that a distortion was introduced by the competitiveness objective, and I am afraid that it is reflected in Amendment 81, in my reading at least.

I hope that the Minister understands that proportionality is not something for five-year strategies. It is central to the work, culture and behaviour of a regulator; as such, it clearly belongs in principles that sit on the face of the Bill.

Financial Services and Markets Bill [HL]

Lord Ashcombe Excerpts

Committee stage
Wednesday 24th June 2026 Grand Committee

Moved by

[Lord Ashcombe]

69B: Clause 16, page 18, line 33, leave out “5” and insert “3”

[Lord Ashcombe (Con)]

My Lords, unfortunately, I was unable to speak at Second Reading—like the noble Lord, Lord Vaux of Harrowden, as he mentioned on Monday—but I am delighted to be back in time to speak in Committee. I declare my interest as an employee of Marsh, an FCA-regulated firm.

The amendment in my name in this group, Amendments 69B and 73A, propose that our financial regulators move from a five-year to a three-year strategic planning cycle. At its heart, this is a straightforward proposition: regulators must keep pace with the world they regulate. In financial services, the rate of change has accelerated to such an extent that a five-year strategy can quickly become outdated. When the FCA and the PRA last set their strategies, few could have anticipated the speed and scale of the developments that followed. The volatility seen in digital assets, the rapid emergence of artificial intelligence in financial decision-making, the growing importance of cyber resilience to financial stability and the impact of geopolitical tensions on global markets have all evolved far more quickly than expected. Yet regulators remain bound by frameworks conceived for a very different environment.

A three-year cycle offers a more realistic and proportionate approach. It is not an arbitrary shift. It better reflects the pace of change in financial services, aligns more closely with the Treasury’s spending review cycle and mirrors the planning horizons adopted by many firms. It also corresponds more closely to the time it takes for innovation to move from novelty to something requiring clear regulatory oversight. Some may argue that a five-year cycle provides greater stability, but stability should not be confused with rigidity. A strategy that is clearly out of date does not offer certainty; it risks losing credibility. True stability lies in a framework that is regularly reviewed and refreshed, so that it remains relevant and dependable. Nor would a shorter cycle create unnecessary disruption. It would not require regulators to constantly change direction; rather, it would ensure that their strategies are revisited at appropriate intervals and updated where necessary. That strikes the right balance between continuity and responsiveness.

There is a practical consideration. Industry participants have consistently highlighted that five-year strategies can be overtaken by events well before their conclusion, making it harder for firms to plan with confidence. In reality, regulators have already had to adapt to unforeseen shocks—whether economic, geopolitical or technological —outside the normal review cycle. For that reason, this is not a radical proposal but a pragmatic one.

It is important that financial regulation does not rely on a planning horizon that no longer reflects the realities of the market. The FCA and the PRA are strong institutions, but even the most capable regulators cannot be expected to operate effectively within five-year strategies in a period of such rapid change. A three-year cycle is a measured reform. It would help to ensure that regulation remains responsive, credible and accountable, while fully respecting the independence of our regulators.

These are probing amendments. As such, can the Minister say why the Government chose to fix five-year periods for strategy reviews? I believe that is too long, so I look forward to hearing his thoughts on that. I also support the amendments in the names of my noble friend Lady Noakes and the noble Baroness, Lady Bowles of Berkhamsted. I beg to move.

[Baroness Noakes (Con)]

My Lords, I will speak to Amendments 70, 71, 73, 74 and 76 in my name. I thank the noble Lord, Lord Vaux of Harrowden, for adding his name to Amendments 70, 73 and 76.

At first sight, Clause 16 looks like a bit of “motherhood and apple pie” legislation. After all, what is not to like about five-year strategies, which are what most businesses do in the UK and internationally? A closer look at Clause 16, however, reveals a bit of a mess. The position we have at the moment is that the PRA is required to determine a strategy, and it does this by way of annual business plans. There is no requirement in statute for the FCA to do anything but it has routinely issued annual plans; last year, it issued a five-year strategy as well. So this is clearly a slightly messy area, and the Government are right to try to tidy it up.

I fear, however, that the solution in Clause 16 will make things worse. First, the requirement for a strategy seems to be a static one, requiring a five-year strategy to be set and then replaced when the five years have nearly run out. The subsections of new Sections 1JZA and 2E, to be inserted by Clause 16, envisage that the strategies can be revised or replaced, but it is unclear what the trigger for that is other than when the Treasury issues new recommendations in a remit letter. In the business world, strategies are kept under review and are often revisited annually—certainly more often than every five years. I believe that Clause 16 needs a positive requirement for the regulators to keep their strategies under review, if only to confirm their continuing validity. My noble friend Lord Ashcombe’s Amendments 64A and 73A would partly get round the problem by shortening the period, but they still envisage a static strategy; it would be three years and then, at two years and nine months, you would do another one, which is not a satisfactory approach to drawing up strategies.

The Explanatory Notes explain that these strategies are expected to be

“high level and focus on the FCA’s and PRA’s top priorities”.

That is fine, but it is not very useful for the regulated firms that want to know how the regulators’ actions will affect them in practice. If these five-year plans are anything like the FCA’s five-year strategy—all 20 pages of it are full of drawings, photographs and big letters—firms will be very disappointed. The FCA’s four priorities of being a smarter regulator, fighting financial crimes, supporting growth and helping consumers are so high level that they mean nothing to regulated firms.

At the moment, both regulators annually set out the detail of what they plan to do for the following year. Can the Minister say whether this will continue once the Bill becomes law? There will be no requirement in law for either the FCA or the PRA as a consequence of the Bill, and, given the lightweight content of the FCA’s five-year plan and the Government’s intentions for only high-level strategies, it would be a serious error if the regulators were not required to publish their detailed annual plans as well.

These are deficiencies in Clause 16 but they are not covered by specific amendments, mainly because, when I drew up my amendments, I was working on the naive premise that asking for a five-year strategy was a sound, if unexciting, proposition. As I have explained, I now see that as flawed in many ways. For this reason, I fully support the Clause 16 stand part notice in the name of the noble Baroness, Lady Bowles; I am sorry that I did not have time to add my name to it.

On the amendments that I have tabled, I will start with Amendment 70, which requires the FCA’s strategic priorities to include its secondary competitiveness and growth objective. The equivalent provision for the PRA in new Section 2E, inserted by Clause 16, says that the strategic priorities of the PRA include secondary objectives, whereas the drafting of new Clause 1JZA for the FCA does not extend to the secondary objectives. The Minister has helpfully written to me today to say that the Government sort of accept that but that they will work up their own amendment. I thank him for that and I look forward to seeing the text of that ahead of Report.

--- Later in debate ---

[Lord Stockwood (Lab)]

They are obviously related.

[Lord Ashcombe (Con)]

My Lords, what an interesting debate this turned out to be. There are a number of flaws, which have been extremely well demonstrated by all noble Lords on this side of the Room. I thank the Minister for his answer to my question. I am also extremely grateful to my noble friend Lady Noakes for improving my amendment significantly by talking about annual plans, which is quite correct. However, it is imperative that we continue to have parliamentary oversight of the regulators. From the discussion we have had this afternoon, there is no doubt that this clause still has a number of legs in it, and the horse race will continue for some time. I am sure we look forward to coming back to this on Report but, with that, I beg leave to withdraw my amendment.

Amendment 69B withdrawn.

ExxonMobil: Mossmorran

Lord Ashcombe Excerpts

Monday 24th November 2025 Lords Chamber

[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.

Employment Rights Bill

Lord Ashcombe Excerpts

Report stage
Monday 14th July 2025 Lords Chamber

Finally, the noble Baroness, Lady Carberry of Muswell Hill, asked us to consider the balance of power. She says that young workers are least likely to understand their rights or be able to exert them. She has not met any of the young people I know—in fact, Omar is sitting below Bar there, before he goes on his shift in hospitality. I can assure her that he is more than capable of asserting and understanding his rights. The danger is that we patronise and impose on those young workers, on the basis that they will not be able to cope. That is paternalism and underestimates the young. This would give rights to young workers and would not disrupt an industry on which many of them are dependent, which is exactly the kind of proportionality that I hope the Government would welcome.

[Lord Ashcombe (Con)]

My Lords, this first group of amendments, in the names of the noble Lord, Lord Goddard of Stockport, and my noble friends Lord Sharpe of Epsom and Lord Hunt of Wirral, is significant and I am pleased to support it. I declare my interest as an employee of Marsh Ltd, a large insurance broker. Noble Lords might think that this will therefore not have much effect on me. They would be right, but I have other views.

Many individuals, for a wide variety of reasons, do not wish to have a permanent contract with guaranteed hours. While the Government might like to think that everyone wants guaranteed work, that is simply not the case. Flexibility for employees who desire zero-hours contracts is surely what everybody wants. In my experience, happy employees inevitably are more productive than those who are not. This goes directly to the heart of what the Government are trying to achieve—growth.

At the same time, many others would welcome the certainty and stability of fixed-hours contracts. It is essential, therefore, that we provide clarity in this legislation where ambiguity might otherwise lead to dispute or, worse still, legal action. That is why I welcome Amendment 2, which introduces a clear definition of a threshold below which it is not reasonable for an employee to request a guaranteed-hours contract. Setting this threshold at eight hours a week—essentially a day’s work—offers helpful clarity. It strikes a sensible balance between flexibility and fairness.

On Amendments 3 to 5, there also needs to be fairness in any arrangement, otherwise it will not stand the test of time. Therefore, it is entirely reasonable to allow a reference period during which both parties can assess the suitability of the arrangement before any request for a fixed-hours contract is made. This period of mutual assessment is not only practical but necessary. Mistakes can be made on both sides, and both employer and employee should have the opportunity to part ways without undue burden if the relationship is not the right fit. The 26-week period proposed in these amendments is an appropriate length of time for such assessments to take place.

As mentioned before, unhappy or mismatched employment arrangements serve no one. They can harm the individual’s well-being and morale and, in time, may undermine the company’s productivity, particularly for smaller businesses, where every member of staff has a significant impact—the smaller the company, the bigger the impact. We must remember, as we were reminded in Committee, that small businesses make up the majority of the companies in this country, unlike those I work for. For these reasons, I support the inclusion of a minimum number of hours’ work per week for a clearly defined reference period before the employee may request a guaranteed contract. I believe these amendments strike a fair and practical balance that will benefit both employers and employees.

[Baroness Noakes (Con)]

My Lords, in this group I have Amendments 9 and 22, both of which seek to amend government amendments in identical ways. I shall speak to Amendment 9, which seeks to amend government Amendment 8, but my remarks apply equally to Amendment 22, which seeks to amend government Amendment 21. Before doing so, I offer my support to the other non-government amendments in this group; other noble Lords have already spoken well in favour of them.

My Amendment 9 is based on the premise that the Government should be trying to balance employee rights with the need of businesses to be successful and to grow. The Government want to end what they call “one-sided flexibility” but that would not be a good thing if the outcome was to destroy the labour market flexibility which is the hallmark of the UK’s international competitiveness and has been a major contributor to the country’s overall economic resilience.

Government Amendment 8 amends the provisions of Clause 1 which would have allowed the Secretary of State to create exemptions from the duty to offer guaranteed hours on a very broad basis. That power was a glimmer of light in a part of the Bill that was otherwise quite dark, especially for those employers whose businesses could be harmed by the new duty. It is clear that the Government wanted to use that new power very sparingly but it was drafted in a broad way and would therefore have offered the Government an elegant solution if they discovered that certain types of businesses simply could not stay in business if the duty applied to them.

Unfortunately, the Delegated Powers and Regulatory Reform Committee of your Lordships’ House, for which I generally have a high degree of respect, declared that this power was “inappropriately broad”. I suspect that if the DPRRC had attended some of the debates on the Bill earlier in its passage, it would not have been quite so quick to damn this power. Even more unfortunately, the Government have chosen to respond to the DPRRC’s recommendation by making the power virtually useless.

My little glimmer of light has been virtually extinguished by the Government’s Amendment 8. This now requires that when the Government try to use the regulations to create exemptions, they have to take account of two things. The first is the benefits of workers receiving a guaranteed-hours offer. I would have absolutely no problem with that if it were balanced by an equivalent need to avoid having adverse effects on employers, but Amendment 8 goes further and says that the needs of the employers concerned can be taken account of only if they are dealing with “exceptional circumstances”. I do not know what “exceptional circumstances” means but it is probably something like a pandemic; it would not deal with those businesses which face fluctuating demand patterns as part of their natural business model. Unpredictable work demands are therefore difficult to see as exceptional circumstances.

When we debated this clause in Committee, my noble friend Lady Verma, who is not in her place, talked about the need for employers providing domiciliary or home care to be responsive to the actual fact pattern of demand for care. I suspect that would not count as exceptional, even though it is an intrinsic part of the business model of those who provide home care; nor would it, I suspect, apply to any of those businesses that are affected in any way by seasonal demand patterns, as has already been mentioned. Therefore, the ordinary everyday needs of businesses will be ignored if Amendment 8 is accepted without amendment. In practical terms, all the Secretary of State can take account of is the benefits to workers of receiving a guaranteed-hours offer.

Therefore, my Amendment 9 removes the constraint of needing to satisfy the exceptional circumstances limb; the Secretary of State would simply be having regard to, on the one hand, the benefits for employees and, on the other, the adverse effects on employers. I hope in that way a proper balance would be achieved in the Bill and that the Government will be prepared to rethink their Amendments 8 and 21.

--- Later in debate ---

[Lord Goddard of Stockport (LD)]

My Lords, coincidentally, both the amendments in this group are mine. They seek to address the rights of workers to receive payments following a short-notice shift cancellation and provide clarity. I would like it on record that we recognise what the Government are trying to achieve with these provisions and that workers should be compensated when shifts are cancelled at short notice. In recognition of that provision, I have Amendment 11 in my name. This is especially important, given that such cancellations often disproportionately impact those workers in hospitality, retail and other sectors where shift incomes can be crucial to meeting everyday financial needs.

My amendment seeks to address this by defining “short notice” as at least 48 hours before a shift is due to start. By doing so, they would provide much-needed clarity and certainty, helping people and businesses, particularly smaller businesses, without expensive legal and administrative resources to plan for and effectively implement their requirements.

Importantly, the amendment would maintain the principle that, if a shift is cancelled within 48 hours of that window, the employer is still required to provide compensatory payments to the worker. That would protect workers from a sudden loss of income caused by last-minute cancellations, which can be devastating for those relying on shift work to support themselves and their families. The amendments would strike a fair balance, ensuring that workers are compensated fairly for genuinely short-notice cancellations while supporting practical and manageable implementation by employers across the sector with fluctuating and dynamic working patterns.

This amendment is important because a persistent problem with the Bill is a lack of clarity in key provisions such as short-notice cancellations. The Bill does not define what constitutes “short notice” and instead leaves this Government to determine that through future regulation. This creates uncertainty for businesses and workers alike. It appears that the Government wish to maintain flexibility on this provision by leaving the definition of regulation, but for businesses of this kind that causes limbo, leaving them uncertain and unable to adapt for practical efficiency.

Without clear rules, employers, especially small businesses, face real difficulties in preparing for their legal obligations, which could lead to inconsistent application and confusion in the workplace. I sincerely ask the Minister why this important detail has yet to be clarified. We are on Report in this House and the Bill has already completed its Commons stages. Given that we have numerous government amendments here, just as we had in Committee, I hope the Minister will be able to provide some clarity and answers on these important questions. I beg to move.

[Lord Ashcombe (Con)]

My Lords, I support Amendments 10 and 11 in the name of the noble Lord, Lord Goddard. We all understand that in shift-based work there is an expectation that, if someone is on the rota, the shift will go ahead, but life is not always so predictable. In my experience, unexpected changes happen, often without warning or obvious reason. So the question we must ask is: should an employer still be obliged to pay a worker when there is no work available? I can already hear the instinctive response “Yes”, and I understand why, but we must also ensure that the rules we put in place are fair and reasonable for all parties.

The amendments propose a balanced solution. If an employer needs to cancel a shift, they should provide notice. I entirely agree with noble Lords opposite that, if notice is given only an hour before the shift begins, that is clearly unreasonable. By that time, the worker will likely have made arrangements, be they childcare, travel or even turning down other opportunities to be available for work. In such cases, they deserve to be paid as if they had worked the shift.

As it stands, the Bill does not seem to specify a minimum notice period before a shift is cancelled. That gap needs addressing. The proposed 48-hour period in the amendments would strike a reasonable balance. It would give workers enough time to make other plans and give employers and, particularly importantly, the small business community some flexibility, while avoiding the unfairness of telling someone at the last minute, “You’re not needed today”, and leaving them unpaid. With that in mind, I am happy to support the amendments.

--- Later in debate ---

[Lord Moynihan of Chelsea (Con)]

My Lords, I support this very important amendment moved by the noble Lord, Lord Young of Acton, and endorse everything that the noble Baroness, Lady Fox of Buckley, said. Noble Lords will be pleased to hear that they covered so much of the ground that needs to be covered that I will not have to speak for too long.

To tease out some of the truly important aspects of what the noble Lord and noble Baroness said, key to this clause is the word “harassment” and the phrase

“to take all reasonable steps”.

Words can have various meanings and people can interpret them differently. For example, “I banter” but “He harasses”; “He, she or it is a social predator and should be prosecuted to the full extent of the law”. To make a truism, that is what we are doing here: making laws. Laws get interpreted and used to prosecute. People who see an advantage in using the law can take their employer to court, and we will have yet more things being banned, and more opportunities for lawfare, as the noble Baroness said, and to shut down our national life.

In the Economist, which is not a particularly dry magazine, as your Lordships know—it supports all sorts of liberal ideas—an article about two weeks ago said that all these people who talk about how civilisations die have got it wrong. There is one thing that is common to civilisations that die, whether it is the Song Dynasty in 1200, the Venetians at a not dissimilar time, the Romans or whoever. Why did they have a tremendously successful society that collapsed over a number of years? The Economist said that they banned things; they said, “We won’t have this. You won’t be allowed to do that. You won’t be allowed to import these things. We will put tariffs on goods imported and, above all, we will ban various types of speech”. That is what the Economist said leads to the decline of societies.

We are British; we have things like banter. For centuries, we have been able to live at ease with each other and say amusing things. I have had people say things to me that I did not particularly like, but it was banter and I went along with it—we can all go along with it. If we insist on shutting down the most harmless kinds of remarks, which courts will interpret as being justiciable within the framework of this clause, we risk going further down the path that the Economist warned against.

I plead with noble Lords, in a most kind way, to think very hard about this amendment. Please vote for it, because it is not trivial—it is very important.

[Lord Ashcombe (Con)]

My Lords, I support this group of amendments in the name of my noble friend Lord Young. If these amendments are not accepted, I worry that we will see a sharp increase in cases going to employment tribunals, adding more pressure to a system that is already stretched. It is not hard to imagine how these disputes may play out. We will likely see countless cases built around the old “Yes, you did”, “No, I didn’t” argument, disagreements over who said what to whom, and in what context—not only the genuine cases mentioned by the noble Baroness, Lady Fox. It is messy, time-consuming and, frankly, avoidable by agreeing to these amendments.

Much of the debate on this issue so far has rightly focused on the hospitality, retail and entertainment sectors, where these challenges are particularly acute. However, it is not only these sectors that have an issue coming to them; it goes much wider than that. By way of example, I work for a large insurance broker, Marsh Ltd. We regularly host clients from around the world at our offices in the City of London. These visitors often come from countries and cultures very different from our own. Now imagine a scenario in which an employee overhears a private conversation between two overseas clients in our lobby—perhaps just in passing—and takes offence. That could lead to a complaint and, potentially, even to legal action, despite my employer having no direct involvement. Why should any business, large or small, be held liable for that kind of situation?

We need to remain an attractive destination for global business, whether in insurance or any other sector. Welcoming international clients to the UK supports jobs, drives growth and benefits us all, but if businesses feel they are constantly at risk of ending up in tribunal—or are under the threat thereof—over things beyond their control, that creates a real disincentive to continue. For smaller companies, the stakes are even higher. The financial and reputational cost of defending against such claims could be devastating.

This is a matter of common sense and balance. These amendments do not take rights away from workers; they simply provide clarity and fairness for everyone involved.

[Lord Lucas (Con)]

My Lords, has the Minister consulted the Clerk of the Parliaments about how he would apply this clause to this House, should it be passed? What would be the rules in, for instance, the Peers’ Dining Room about discussing politics and religion? The fact that we might think it unreasonable that we should not be allowed to discuss that does not make it unreasonable. What makes it unreasonable, under the words of the Bill, is that it would be something it would not be reasonable to do. It is clearly within the scope of the organisation of this House to say that no potentially offensive conversations should be held in spaces where employees are likely to be present. This is what the Bill says at the moment. I can see that noble Lords opposite find it ridiculous, but this is the legislation that their Government have drafted.

Employment Rights Bill

Lord Ashcombe Excerpts

Committee stage
Wednesday 18th June 2025 Lords Chamber

[Lord Jackson of Peterborough (Con)]

My Lords, I was happy to sign the clause stand part notice with my noble friend Lady Coffey. I am thinking of the words of Zhou Enlai, I think, who, considering the French Revolution, said, “What did they mean by that?” I look at this clause and think, “What do they mean by this?” Maybe the Minister will open the trinket box at the end of this process and let us into the secret of this bizarre, perverse clause, but I really cannot see the point of it.

I am mindful of the fact that we are surrounded by very accomplished lawyers, so I will not get too much into law, but lawyers and others will be aware that Magna Carta—1215; I know the noble Lord, Lord Katz, likes a history lesson occasionally in Committee—resiled from the arbitrary power of the state. It is an arbitrary power of the state for it to insert itself into civil litigation without any real methodological basis, any timeline or, as my noble friend Lord Murray of Blidworth so rightly said, any tests being met. That is very odd.

Perhaps the Minister will enlighten us as to the rationale. The clause is novel. It is completely perverse and unheard of, to be quite honest, because it will engender a disputatious regime, more litigation and more disputes in the workplace. It will have a deleterious effect on business, commerce and profitability, and on how businesses are run. What tests will the Minister use? How likely is it that these powers will be used and at what likely cost? Is there any impact assessment or opportunity cost as to the use of these powers?

Why does subsection (2) leave agricultural workers out of the process? There may be a specific sectoral reason for that, but that is a reasonable question to ask. Why are they not swept up in these powers? Why are their rights not circumscribed to not get involved in civil litigation in respect of employment?

Finally, the most bonkers part of a truly epically bonkers clause is subsection (7). It is so crazy that it could have been written by the Liberal Democrats, but it would be unkind to make such an observation. My noble friend Lady Coffey has already made the point that you do not even have to be a worker to have the Secretary of State impose themselves into your potential litigation on a matter; you can be someone seeking employment as a worker. Presumably, anyone who is of working age can be affected by this clause. Subsection (7) also states that a worker is defined more widely as an individual who is a worker for the purposes of Part 4A of the Employment Rights Act 1996.

I really do not understand the rationale for or the logic behind this clause. The Minister is clearly aware of the great disquiet that it gives rise to, and I hope she answers the specific points made, not least by the noble Lord, Lord Carter of Haslemere. It takes something for a noble Lord of his experience in the law to say that this is the most perverse and strangest clause he has seen in a piece of primary legislation. On that basis, I hope the Minister will respond to that and answer those specific points that noble Lords, in particular the noble Lord, Lord Carter of Haslemere, have raised.

[Lord Ashcombe (Con)]

My Lords, I support my noble friends Lord Sharpe of Epsom and Lord Hunt of Wirral in some of the amendments in this group, and my noble friends Lady Coffey and Lord Jackson of Peterborough in their opposition to Clause 113, which I must describe—much as the noble Lord, Lord Carter of Haslemere, did—as quite extraordinary. It is extraordinary because it grants the Secretary of State exceptional powers—namely, the ability to initiate proceedings before an employment tribunal on behalf of a worker without that worker’s consent or even their knowledge. How can this be right? If a worker has chosen not to pursue a claim, whatever their reasons, how can the state reasonably step in and proceed in their name? Unlike my noble friend Lord Murray of Blidworth, I am no lawyer, but I think this demonstrates the need for Amendment 271D.

Consent is a fundamental principle in so many aspects of law and life, yet here it appears to be disregarded. Amendment 272ZZA at the very least seeks to restore some balance by ensuring that the worker in question is given the opportunity to consent or decline. If consent is not given, the matter should go no further: all bets should be off. I find it puzzling that those on the Benches opposite consider it appropriate to have the ability to disclose personal data, whether legally privileged or not, without the written consent of the individual concerned. It is not typically something permitted in other circumstances. It is not fair, and we are about fairness in this House.

Employment Rights Bill

Lord Ashcombe Excerpts

Committee stage
Thursday 5th June 2025 Lords Chamber

[Baroness Coffey (Con)]

I expect the bigger employers, if they know about this legislation—although we are hearing from a lot of the employers’ representatives that a lot of their members had not even heard about the day one rights until very recently—will probably put their HR departments and lawyers on it. I am concerned about the smaller ones, which is why I am sympathetic to the amendments in this group on micro employers and small employers. Otherwise, this could start to become a very expensive business. It is yet another reason why the Government generally do not seem to understand the chilling effect that not only their economic policies but legislation such as this will have on the recruitment of people to jobs.

[Lord Ashcombe (Con)]

My Lords, I had no intention of coming here today to speak until I had dinner last night. Having put in a day’s work, I thought it was time to come here and express an opinion.

I would like to describe that situation last night. It follows on from a lot of what my noble friend Lord Leigh of Hurley said and the powerful words of the noble Baroness, Lady Lawlor. This friend of mine, whom I have known for 30 or 40 years, is a small businessman in Bath, down in the West Country. He said to me, “Mark, we have a major problem coming. I have friends in similar places who run small businesses”—he runs a business of some six or seven people. “We are all talking together, because that is how we transfer knowledge, and the number of us beginning to think about throwing in the towel is significant. I want you to know about it”.

If this change were to happen, it would affect the poor employees of these businesses. There is nothing inherently wrong with these businesses but there is, as we have heard, more and more legislation coming upon them. It is the employees who are going. The domino effect through local economies is too much for these businesses. These small guys have to employ lawyers, HR experts and so on. I work for a company where we have those in house. They are just getting to the end of their tether. They do not want to stop, but I hope that Amendments 205 and 207 will help prevent that sort of thing happening and another nail in the coffin for these small businesses, which are really struggling as they think about the hassle of going on.

[Lord Goddard of Stockport (LD)]

My Lords, this group of amendments concerns the provision of employment rights. The essence of the group is about requiring employers to provide workers with a written statement of their trade union rights. Even after seven hours, I enjoyed listening to the noble Lord, Lord Jackson of Peterborough, describe a romp through the 1970s and the bad old days of the Labour Party bringing the country to its knees and almost losing the car industry. He failed to skip into the 1980s, when the Government did destroy an industry—the coal industry—and did immeasurable damage to the trade union movement, which it has taken decades to recover from and is at the heart of the Bill. It is a direct result of actions taken by a certain Government in a previous life. In response to the noble Lord, Lord Moynihan of Chelsea, I have been here since the start of the debate and listening. As the Companion says, it is courtesy to be here at the start of the debate to listen to the opening speeches and then the winding up speeches. There seems to be real departure from that by Members, who just wander in, make contributions and wander out.

Employment Rights Bill

Lord Ashcombe Excerpts

Committee stage
Wednesday 21st May 2025 Lords Chamber

[Lord Ashcombe (Con)]

My Lords, I stand with some trepidation at this stage to support very much the amendments in the name of my noble friend Lady Neville-Rolfe, and indeed I support the other amendments in this group.

We have to think that any company—large, small, charity, whatever it may be—that hires a new employee takes a calculated risk. They are unknown. The company hopes that the individual, young or more mature, will integrate well into the company culture and be capable of handling the expected workload with the appropriate training needed.

I understand the Government’s position, as mentioned in a previous day’s debate on the Bill, that the employee also takes a risk when starting a new job or changing careers. They too must be confident that the role aligns with their skills and aspirations. A probationary period exists to serve both parties. It allows the employee to assess whether the role suits their interests, skills and abilities, while giving the employer time to evaluate whether the employee fits before making a long-term commitment. Is that unreasonable?

In my own place of work, I have seen this very much in practice. In fact, when I returned to work, I had a six-month probation period, and I had worked for them for 25 years before that. We once hired a seasoned practitioner with considerable market experience. However, for various reasons, they did not pass their probation. Should that individual be entitled to bring a claim for unfair dismissal, noting what the noble Lord, Lord Hendy, said? From the employer’s perspective, they are simply trying to safeguard their business, its culture and its ability to deliver results for clients. The smaller the business, the harder it is, as we have just heard and as, I think, the noble Lord accepted.

Is it right that an employee should be granted full employment rights from day one, when both sides are still in a learning phase? Is it fair that a company could face the threat of an employment tribunal for unfair dismissal if the probationary period is not successful, on which we have had a lot of discussion? Whatever happens, should it go towards that phase? Should it never reach the employment tribunal? It is a gruelling process for both parties, and an expensive one—emotionally, culturally, and potentially in the pocket.

The Government rightly seek to stimulate growth, as mentioned by the Minister on the previous group. For that to happen, businesses must feel confident in hiring. But, if the terms of employment are too burdensome, companies may hesitate to expand their workforce. It is imperative that the economy is prevented from becoming stagnant or, worse still, contracting. I simply do not understand why this clause is in the Bill. It does not propose anything that helps growth in this country.

[Lord Barber of Ainsdale (Lab)]

The noble Lord pointed to the daunting process that faces an employer potentially facing an employment tribunal accusation that would damage perhaps their reputation, as well as the daunting issues that also face the employee who is considering going down that course. My noble friend made some emphasis on that point.

The debate has been conducted as if this is a hugely common threat: indeed, as if it is a threat that, potentially, is going to do tremendous damage to our economy. But could I just point to the scale of the issue? In 2023-24, there were just over 5,000 unfair dismissal cases referred from the Tribunals Service to ACAS for the conciliation processes that my noble friend referred to. What is the size of our workforce in the British economy? Is it 25, 26, 27—

[Lord Barber of Ainsdale (Lab)]

Thirty-four million workers. Five and a half thousand cases. Why is the number so small? It has been suggested that it is because an employer’s immediate response is to offer a settlement to buy off the prospect of a tribunal. Some may make that judgement, but, given the evidence my noble friend has referred to about the unlikelihood of applicants succeeding with their claims, that does not seem a very wise response to give. There may be some, but for the individual, it seems to me, more daunting factors influence them to hold back because it is so painful and potentially stressful that they are reluctant to take their case in the first place.

This whole Bill is about giving people at work in Britain more confidence and there needs to be some sense of perspective about the scale of the issue we are talking about. Five thousand people.

[Lord Ashcombe (Con)]

I am aware of a case of a small company that has got rid of four individuals in view of the legislation because those individuals are not doing a good enough job, but it could live with them if it had the ability to get rid of them. What it cannot face the thought of is having to go down any form of tribunal route or indeed threat thereof. That is not what we are trying to do with this Bill; we are trying to prevent that. We do not want to see those individuals leave employment. That is not what we want, and that is where it could lead a lot of people.

[Baroness Coffey (Con)]

My Lords, this is one of the most important parts of this legislation, and I am very conscious of the Labour Party’s manifesto and its success in the election last year. However, at the same time, this is the same Government who want to increase the employment rate to 80%, which has not been achieved in a very long time. If we go back in history, we see that the Blair-Brown Government did not make changes to go to zero or day-one rights in the same way. Yes, they changed it from two years to one year. The coalition Government later changed it back to two years.

Yet we are now seeing—as has already been pointed out elegantly by the noble Lord, Lord Vaux of Harrowden, in response to some of the comments raised on the Government Benches—that this is the Government’s own impact assessment. If we look at the Regulatory Policy Committee’s assessment of these proposals, we see that it gives a very strong red rating on this element and suggests that, basically, there is no evidence that they are in any way needed.

There are aspects here of “What is the problem that the Government is trying to address?”. Lewis Silkin solicitors point out that if the only changes to be made were those referred to and we were still to have, as the noble Lord, Lord Hendy read out, the different approaches on fair dismissal in the tribunal, the Government could just put forward a statutory instrument based on the existing power of the 1996 Act. However, they have not done so in the Bill; they are seeking to go much further in a variety of ways in Schedule 3. That is why I share the concerns of many other noble Lords who are worried about the unintended consequences. Nobody can believe that a Labour Government would want to see unemployment rise or more people on benefits, or not tackle the challenge of people not in education, employment or training—