Employment Rights Bill

Lord Londesborough Excerpts

3rd reading
Wednesday 3rd September 2025 Lords Chamber

[Lord Londesborough (CB)]

My Lords, I think we have spent 13 days in this Chamber scrutinising this critical Bill. I salute the Ministers and Front Benches for their stamina and perseverance. The Bill has tested the patience of noble Lords on all sides of this House, so I will not test their patience further by going over the same arguments we heard during Committee and Report—very often the same arguments. I will simply raise one overriding question expressed by the FSB, the CBI, the ICAEW, the British Chambers of Commerce and, indeed, pretty much the whole private sector. They are asking, in light of the Bill, how committed the Government really are to delivering on their overriding number one mission—real, sustainable economic growth —and how the Bill will impact on the two crucial ingredients behind growth: job creation and, as we have heard, productivity.

On job creation, vacancies have now fallen to an effective 10-year low when you exclude the exceptional pandemic years. The Bill looks set to accelerate that downward trend. On the need for greater productivity across our 30-million workforce, employers are currently paying, on average, 5% annual wage increases for close to zero productivity gains. The Prime Minister and Chancellor have hailed this as an achievement, putting more pounds in workers’ pockets, but I am afraid that it is as illusory as it is inflationary, and will only contribute to ever-widening black holes.

The Bill will, as the Government admit, push up even further the costs of employment and damage the risk/reward equations behind recruitment, probation and employers’ ability to conduct those crucial performance reviews for staff. That is bad news for productivity, and I fear it will not go unnoticed by investors.

[Baroness Jones of Whitchurch (Lab)]

My Lords, first, I will respond to my noble friend Lady Warwick about Universities UK’s concerns. Given the stage of the parliamentary passage that the Bill has reached and the fact that the House has agreed that Clause 36 should stand part of the Bill, the clause will not be considered further during ping-pong. But as my noble friend knows, I have written to her on this issue, and the letter is available for all Members to read. We fully recognise the need not to impose disproportionate burdens on smaller procuring organisations such as universities and, to this end, we intend to consult in the autumn on the detail and scope of the two-tier code. The consultation will consider the extent to which certain public authorities, including higher education providers, are required to follow its provisions. While I cannot comment on whether we can carve out particular sectors before this consultation, I can assure my noble friend that we will carefully consider the issues, particularly applying to higher education providers.

Secondly, I thank the noble Lord, Lord Goddard, for his kind comments. I think it is fair to say that we have enjoyed working with him.

I am sorry that we have ended on a note of discord in this debate. I thought that we had, up until this point, had very courteous discussions around all this. The fact that there are relatively few issues remaining between us is a sign of the enormous work that this House has done over the last few months on this issue. I hope that, because there are so few areas of continuing disagreement, we can reach a conclusion on this Bill very quickly.

I do not want to rehearse the debates that we have had again. Listening to this debate this afternoon, it is a miracle that only 10 or so issues are still outstanding because it feels as if we are back at square one. But I feel that we made some progress during the course of the discussions.

When we came into office we inherited an economy that was on its knees and employment rights that were way out of date. We have been working and continue to work to address these issues. We are doing it in all sorts of ways. The small business strategy that we launched over the summer, the industrial strategy and the trade strategy are all designed to make the UK a place to do business with on an international basis and where jobs will be protected in the future.

On the state of the economy—because I have been provoked on this—in the three months to June, GDP grew by 0.3%, meaning the cumulative growth this year has already exceeded the OBR’s forecast for the whole of 2025. Since the start of the Parliament, 380,000 jobs have been added. Britain has become the most attractive place to invest in the world, joint top with India following its deal with the US. The FTSE 100 index smashed through the 9,000-point mark this July, with sustained growth throughout last month. Middle market businesses are growing at their fastest rate since the last election, according to research from NatWest. Confidence among UK businesses has grown, with 54% of companies feeling positive about the current environment, according to the Lloyds Business Barometer. I could go on.

We are positive about the opportunities ahead for our economy and, in that context, we are positive about the jobs that will be provided. They will be good jobs where people feel that they have a stake in their employment and a positive future. I am sorry we ended up on that discordant note, and of course I am sure we will come back and continue to try to iron out the remaining points of difference. In the meantime, I beg to move.