Employment Rights Bill

Lord Hunt of Wirral Excerpts

2nd reading
Thursday 27th March 2025 Lords Chamber

[Lord Hunt of Wirral (Con)]

My Lords, I begin by drawing attention to my interests as detailed in the register, in particular as a practising solicitor and partner at DAC Beachcroft.

I thank the Minister for opening the debate and we look forward to the maiden speeches of my noble friends Lady Cash and Lord Young of Acton, and the noble Baronesses, Lady Berger and Lady Gray of Tottenham.

I have always believed fervently in workers’ rights and trade unions. Indeed, as a young solicitor, I often acted for the Transport and General Workers’ Union in a wide variety of cases. By the late 1970s, however, by which time I was a Member of Parliament, it had become abundantly clear that something had gone seriously awry with the trade union movement. The unions seemed to be abusing their powers, pursuing not only the legitimate interests of their members but an overtly political agenda.

I remember being in the House of Commons when, in the final year of the Callaghan Government, the unions all but brought the country to its knees. A new settlement was needed. Successive Conservative Governments, between 1979 and 1997, gradually changed the nature of the social contract between employers, employees and the unions. Days lost to strikes tumbled from tens of millions a year to a tiny fraction of what they had been. Thanks to the more flexible labour market we had created, renewed economic growth brought a dividend of rising employment and falling unemployment far more quickly than anyone expected. That was not the Wild West. Indeed, workers’ rights and protections were often extended, not diminished.

The last Labour Government, under both Tony Blair and Gordon Brown, broadly accepted that renewed social contract and embraced the flexible labour market that serves both employers and employees so well. So, what has changed? Furthermore, what has changed during the passage of the Bill? It has had a brief lifetime, yet we have already had 160 government amendments in Committee in another place, including 11 new clauses and two new schedules. This farrago was followed by a further 40 new clauses and five new schedules on Report.

It was an extraordinary decision to run the progress of the Bill in parallel with a series of directly connected public consultations. As they showered us with amendments of their own, Ministers used their majority in the other place to defeat some very sensible ones from my own party and from the Liberal Democrats. More amendments are now promised—or should we say threatened? No one can convince me that there has been fair, effective and comprehensive parliamentary scrutiny of this legislation, which is scandalous when we think of the profound effects it is bound to have on British business and how our businesses operate.

To date, 11 government Bills, including this one, have included Henry VIII powers. This Bill contains 11 such powers. So great is the uncertainty this creates that a meaningful Second Reading debate is almost impossible. What, in fact, are the principles of this legislation? Whatever they are today, might they change significantly with further amendments, or when the Henry VIII powers are triggered? Ministers are, in effect, asking Parliament today to empower them to do whatever they decide to do, whenever they decide to do it.

Apparently, in total, the Bill contains 173 delegated powers. I was musing that, if Henry VIII were alive today, he might be tempted to use this kind of skeleton legislation to legalise uxoricide—but whatever. Why are Ministers so disdainful towards the concerns expressed by the Attorney-General in his Bingham lecture on the rule of law last October, when he warned that

“excessive reliance on delegated powers, Henry VIII clauses, or skeleton legislation, upsets the proper balance between Parliament and the executive”?

He recommended

“a much sharper focus on whether taking delegated powers is justified in a given case, and more careful consideration of appropriate safeguards”.

Perhaps the most chilling warning about the specific inadequacies of the Bill came from the Regulatory Policy Committee, which identified eight of the Government’s individual impact assessments as being not fit for purpose, six of which were in the highest impact measure category. Surely it is the principal responsibility of Ministers fully to think through the potential impact of legislation before unleashing it on the world. This Government have failed in that basic task.

Meanwhile, the Recruitment and Employment Confederation’s Voice of the Worker campaign vividly reminds us that temporary work is often a choice made by workers, not an enforced compromise. Its survey of temporary agency workers found that 79% of respondents appreciated the flexibility that temporary work provides, while more than two-thirds believe it affords them a better work-life balance. These values—flexibility and balance—should be celebrated and supported by us all, not jeopardised by half-baked laws. Workers should be empowered to engage in the workforce in ways that best suit their personal circumstances. We must ensure that legislation does not restrict their ability to do so.

Although the intention may be to increase security, these measures risk overregulating agency workers, who are already well provided for under the Agency Workers Regulations. Under current law, these workers are made aware of permanent vacancies and enjoy protections that balance flexibility with job security. Additional regulations could well tip this balance too far, ultimately harming the very workers who the Bill seeks to protect. I also wonder whether Ministers have fully considered the financial, economic and social impact that the measure would have on public bodies, especially in the National Health Service.

Let us consider the proposal around statutory sick pay eligibility. Reducing the eligibility criteria and requirement for SSP to just one day would increase financial pressure on employers, particularly those who employ workers on temporary contracts or in sectors that rely on flexibility. Employers now face the prospect of greater tribunal risk when managing employees’ sickness leave, which could act as a further deterrent to hiring.

Small and medium-sized enterprises are so often the driving force in our economy, delivering growth in production and jobs. They need our encouragement and support, not new burdens. They will inevitably be more hesitant about taking on new employees, if they fear facing immediate legal risks from day one. I implore Ministers always to look at proposals from the point of view of an employer making a marginal decision on whether to take on that extra employee. The proposed new union recognition rules would also hit SMEs disproportionately and, as I will argue on these Benches, unnecessarily.

I turn, as the noble Baroness did, to strikes and ballot thresholds. Under current law, unions must provide 14 days’ notice before a strike, allowing employers sufficient time to prepare contingencies and manage the potential disruption. The proposed change to reduce this notice period to just seven days raises significant concerns. Will this help to generate the much desired and much needed economic growth about which we hear—and have heard today—so much?

In response to the latest ONS labour market data, the Institute of Directors shared some deeply troubling data of its own. That data showed that 47% of business leaders facing higher national insurance bills plan to reduce employment as a result. Business hiring intentions over the next year remain around lows last seen at the height of the Covid-19 pandemic. Even the Government’s own rather feeble impact assessment concedes that this Bill will impose a £5,000 million cost on businesses. What did they offer in return? Unfounded, optimistic speculation that this legislation could lead to growth—with no evidence and no guarantee. Their own declared primary mission is economic growth and yet they put forward a policy that actively undermines it.

The Bill is not only anti-business but, in my view, anti-worker. If it passes in anything like its current form, it would be more appropriate to call it an unemployment Bill. The measures in the Bill will make it harder for existing businesses to thrive and near-impossible for new businesses to emerge. The result will be a stagnating economy, diminished opportunities and worse outcomes for workers right across the country. The only growth that this Bill would deliver would be growth in industrial strife, growth in administrative costs for business, growth in uncertainty, and, ultimately, growth in unemployment. Unless it can be seriously improved, on these Benches we will oppose this Bill all the way, in the best interests of the working people of this country.