Employment Rights Bill

Debate between Lord Sharpe of Epsom and Lord Londesborough

Committee stage
Monday 16th June 2025 Lords Chamber

[Lord Londesborough (CB)]

My Lords, I address Amendment 287 on the creation of an office for a freelance commissioner in the name of my noble friends Lord Clancarty, Lord Freyberg and Lord Colville of Culross, who has managed to beat our limited motorway system but arrived just too late to speak, sadly.

I am somewhat conflicted about this thought-provoking amendment, in that I have argued at Second Reading and in Committee against the overreach of the Bill and its sheer complexity and burden on employers, especially for small and micro businesses. On the noble Baroness’s comment, I do not want to be seen to be adding baubles to the Christmas tree. However, I agree that year by year the arguments grow for the establishment of a freelance commissioner, partly because the number of freelancers is growing and will continue to do so. The current 2 million plus freelancers will easily rise to 3 million within the next 10 years in the UK alone as employers shed staff from payroll, weighed down by the combination of increased national insurance contributions, national minimum wages increasing much faster than the rate of inflation and all the new rules and regulations coming in this very Employment Rights Bill.

Just look at the recent and alarming drop reported last week by the ONS of 274,000 workers coming off payroll during the past 12 months. We do not yet have the data to track how many of them are transitioning to freelance or self-employment. Indeed, as my noble friends have pointed out, the data on this area of freelancing and self-employment is poor and not up to international standards, and that is a real problem when we are trying to assess exactly what their contribution is to the economy.

I am going to muddy the water slightly, but you could argue that there is a need for an independent commissioner for the self-employed. We have been talking about freelancers, but there are 4.2 million self-employed people, including freelancers, in the UK. Those numbers are going to increase given the impact of technology, digital communications, AI and, particularly, the practice of working from home. I accept that there are key differences between freelancers and many self-employed people, for example, sole traders or those running their own businesses or partnerships, perhaps with just one or two contractors, but freelancers, although independent and project-based, are also self-employed and are treated just the same way for tax purposes by HMRC.

I accept that freelancers and the self-employed are not as valued or appreciated by Governments of all parties as they should be. This was brutally exposed during the pandemic with furlough and other schemes. If we want to develop a proper entrepreneurial spirit and environment in this country, we should do much more to value and look after those who create their own jobs and face up to all the risks and jeopardy that that involves. That includes freelancers, not just in the creative industries, but in other sectors where they are prevalent, which are as diverse as construction, professional services and agriculture. The Government need to give Amendment 287 serious consideration and, while doing so, think through how the interests of all the self-employed, not just freelancers, should be represented.

[Lord Sharpe of Epsom (Con)]

My Lords, I thank the noble Lords, Lord Freyberg, Lord Clancarty and, particularly, Lord Clement-Jones, for their valuable contributions and amendments in this group and for the thoughtful way they have introduced them. I am very grateful for their tireless advocacy on behalf of the freelance workforce, who so often find themselves on the margins of employment policy. I will speak in particular to Amendments 301 and 302, tabled the noble Lord, Lord Clement-Jones, which I was happy to sign.

Amendment 301 introduces a new clause which, for the first time in statute, provides a clear and much-needed definition of a freelancer. This definition acknowledges the reality of modern working life, where individuals are often engaged on short-term contracts, operating through their own companies or via intermediaries and managing their own tax and national insurance affairs. These individuals, who are distinct from employees or workers as defined under current legislation, are nonetheless a vital and growing component of our labour market, as the noble Lord, Lord Londesborough, has just pointed out. The amendment does not seek to blur the lines between employment statuses, but rather to draw a necessary and clarifying distinction that enables policy and legislation to recognise freelancers in their own right. The inclusion of the provision for the Secretary of State to issue guidance ensures that the definition can evolve with working practices and case law, and that is both sensible and future-proofed.

Amendment 302 builds on this by creating a duty—a statutory obligation—for relevant government departments to have due regard to the freelancer workforce when shaping new policy. Too often freelancers are treated as an afterthought, and they fall between the cracks of legislation designed for binary employment categories. This amendment seeks to correct that omission. It ensures that the realities of freelance working are considered proactively in policy design, not reactively after the damage has been done.

Furthermore, the amendment ensures that the freelance commissioner, a role established to advocate for and advise on matters affecting freelancers, is appropriately consulted in the policy-making process. That is a modest yet essential safeguard to ensure that expertise is brought to bear when policies may significantly affect freelance professionals, particularly in sectors such as the creative industries, technology and media, where freelancing is not the exception but the norm.

These are thoughtful and proportionate amendments. They do not create undue bureaucracy, nor do they entrench rigid definitions. They offer clarity, fairness, and recognition to a workforce that contributes enormously to our economy and cultural life, yet is often unprotected and unheard in legislative terms. These proposals are not about privileging one form of work over another. They are about ensuring that our legal and regulatory frameworks reflect the diversity of modern work. I commend the noble Lord, Lord Clement-Jones, and his cosignatories on bringing these matters before the Committee, and I urge the Government to give serious consideration to these amendments as practical and principled improvements to the Bill.

I will take this opportunity to speak more broadly regarding the wider group of amendments concerning the impact of this legislation on freelancers and the cultural and creative sectors. Amendment 285 proposes a temporary waiver for small and independent cultural organisations in financial hardship. This is a pragmatic and compassionate measure. We all support robust employment protections, but a one-size-fits-all rollout risks devastating unintended consequences: closures, lay-offs or the collapse of small institutions that are already on the financial brink. The idea of a grace period and progressive enforcement is a proportionate way of balancing worker protections with organisational survival.