Working From Home (Home-based Working Committee Report)

Lord Sharma Excerpts

Wednesday 10th June 2026 Lords Chamber

[Lord Sharma (Con)]

My Lords, it is a pleasure to follow the noble Baroness, Lady Watkins, in speaking in this important debate. I was appointed Business and Energy Secretary on 13 February 2020, just as the enormity of the Covid crisis was beginning to be understood by the Government. As noble Lords know, just over a month later the UK went into its first national lockdown, with profound impacts on many aspects of our lives, including of course the world of work. My department, together with the Treasury, was of course at the centre of the Government’s economic response to the pandemic, and I have provided both written and oral evidence to the Covid inquiry through its various modules. But, having read this Select Committee report in detail, I think that it provides some really thoughtful and complementary analysis to the work being undertaken by the Covid inquiry.

When we went into the first lockdown, in my department we asked ourselves a number of key questions about the world of work in what has now become the new normal. Would working from home actually work for both employers and employees? What impact would there be on productivity as a result of home-based working, including of course the impact on the well-being of people working at home? Would we see a long-term hollowing out of city-centre businesses, which depended so much on the footfall of people going into work during the week, and what would be the impact on public transport? Would that be financially sustainable with significantly reduced work travel? A particular concern of mine was whether we would see the emergence of what I would describe as a potentially societally destabilising two-tier structure, separating those who were safe and could work at home from those who had to go into a workplace during a very difficult time.

This excellent Select Committee report—I commend and congratulate the noble Baroness, Lady Scott, and all noble Lords who served on the committee—has sought to answer precisely these questions, with the benefit of distance from the time of the pandemic, which of course was a catalyst for the big increase in home working. In the limited time that I have available, I want to pick up on one issue, which is productivity—a number of noble Lords have talked about this—and the impact on productivity of longer-term home or hybrid working.

I recall a conversation that I had, as we went into the first lockdown, with the UK heads of some of the major consulting and accounting firms. At the time, they all expressed real concern about the impact of longer-term home working on their employees’ productivity. I had a similar conversation a few months later with them; it suggested that the same firms were pleasantly surprised that productivity had not dropped and, in some cases, had even increased. But then, towards the end of 2020, the anecdotal view I was getting was that any gains in productivity were starting to tail off, as the benefits and synergies of collaborating in person were no longer readily available to employees.

The conclusion from this Select Committee report—forgive me, I am paraphrasing—is that when it comes to productivity the jury is still out, particularly because of the limited availability of quantitative data. I very much welcome the Government’s agreeing to the Select Committee report’s recommendations to collect data and to monitor the economic consequences of home working, including on the UK’s global competitiveness. However, I suggest that the Government need to go somewhat further in their response than just including some specific questions on home working in their periodic surveys to business.

As the Minister will be aware, the CBI, in collaboration with the London School of Economics, published a report in March this year, Remote Work and Firm Productivity. I would recommend all noble Lords to have a look at the detail of that. There is something to be said for the Government working with the major business representative organisations to periodically produce similar targeted analysis of the impact of continued home and hybrid working on the UK’s productivity levels, and, in the context of global competitiveness, to benchmark those productivity levels against what is happening in other jurisdictions around the world. I know that the Select Committee has examined productivity in the context of G7 countries, and that has been incredibly useful, but if the Government are willing to undertake further analysis in collaboration with business representative organisations, they should look at other economies as well, not just those in the G7, which have a similar structure to ours.

I agree with the Select Committee’s conclusion that we do not need any major legislative or regulatory interventions in this area. However, having the Government use their convening power to help deliver internationally benchmarked analysis on home and hybrid working—basically, which measures help in different jurisdictions and what hinders productivity—will make a real difference to both employers and employees as they navigate what we all understand is an increasingly complex world of work, not least, as a number of noble Lords have pointed out, due to the rise in the use of AI in the workplace.