Employment Rights Bill: Productivity

Baroness O'Grady of Upper Holloway Excerpts

Monday 31st March 2025 Lords Chamber

[Baroness Jones of Whitchurch (Lab)]

I know noble Lords do not like to hear it, but I am happy to repeat it again. That, of course, demanded tough choices to fix our public services and create long-term growth and investment. The Government have more than doubled the employment allowance to £10,500 for the smallest companies, meaning that more than half of businesses with NICs liabilities either gain or see no change next year. Businesses will still be able to claim employer NICs relief, including those for under-25s and under-25 apprentices, where eligible. These are tough times economically, but we are determined to do everything we can to ensure that our growth agenda remains undimmed.

[Baroness O’Grady of Upper Holloway (Lab)]

My Lords, is my noble friend aware of HSE analysis which shows that unionised workplaces have fewer accidents and injuries and better well-being, and of TUC research showing that unionised workplaces have more investment in skills, better family-friendly policies and a voice for working people? Does she agree that that is good for productivity?

[Baroness Jones of Whitchurch (Lab)]

I am grateful to my noble friend for making these points. I should reiterate that Britain’s working people and businesses will be the driving force of the UK economy, but the current labour market is not delivering for either. The productivity gap with France, Germany and the US has doubled since 2008; average salaries have barely increased from where they were 15 years ago; and the average worker would be more than 40% better off if wages had continued to grow as they did leading into the 2008 financial crisis.

A final point: alongside its productivity performance, the UK lags the OECD average on most employment protections. We inherited an economy that was in decline, with poor productivity, and we intend to fix that.