National Minimum Wage (Amendment) Regulations 2026

Lord Sharpe of Epsom Excerpts

Tuesday 17th March 2026 Lords Chamber

Moved by

[Lord Sharpe of Epsom]

At end to insert “but this House regrets that the draft Regulations will make it harder for small businesses to take on staff, especially for first jobs and apprenticeships; risk worsening already elevated youth unemployment by further increasing the cost of hiring younger workers; and fail to reflect sufficiently the fragility of the youth labour market, at a time when the number of young people not in education, employment or training is approaching one million”.

[Lord Sharpe of Epsom (Con)]

My Lords, I am extremely grateful to the Minister for explaining and introducing this SI, to which I have tabled a regret amendment. But I am afraid I take a slightly different view from the one he has just explained.

Once again, we start with an ill-thought-out, anti-business measure by this Government. It is very interesting to note that the Minister, when he was explaining and introducing the instrument, referenced a number of government agencies that will be enforcing all sorts of fines and whatnot, but he did not really talk about its impact on business, which is regrettable. Quite frankly, this will end up being an anti-worker measure too, and it will price people out of the labour market.

No one on this side of the House opposes higher pay in principle. Of course we want people to earn more but, for that to be the case, there must be work to be had. A wage floor that is set without proper regard to hiring conditions, business confidence and the fragility of entry-level employment does not help the low paid if it helps price them out of a job altogether. That is why this SI is so troubling. From 1 April, the adult rate will rise to £12.71, while the rate for 18 to 20 year-olds will rise to £10.85 and the under-18 and apprentice rates will rise to £8.

The Government may pretend that there is no trade-off here, but everyone outside government understands that there is. If one sharply compresses the wage differentials—the Minister called them “discriminatory”—between inexperienced younger workers and older workers, one makes it less attractive to hire those with the least experience, the least confidence and the least established work history. The key word is not “discrimination”; it is “experience”. That is not only true for those aged 21 to 25 who are entering the workforce but especially true for 18 to 20 year-olds, many of whom rely on part-time, flexible and entry-level work to get that crucial first foothold in the labour market. Retailers themselves are warning that these local, flexible jobs are often the first step into work for young people, including Saturday jobs and short-hours roles around study or caring responsibilities.

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I extend my thanks once again on behalf of the Government to the noble Baroness, Lady Stroud, and the Low Pay Commission. In closing, I would like to reiterate the positive impact that these regulations will have for millions of young people: an annual pay rise of around £900 for a full-time worker on the national minimum wage and one worth over £1,500 for a full-time worker between 18 and 20 years old. Making work pay will be among the proudest legacies of this Labour Government.

[Lord Sharpe of Epsom (Con)]

My Lords, I am very grateful to the Minister for his response. I was not expecting Confucius, but of course I defer to that ancient wisdom.

I listened very carefully to what was said, in particular by the noble Baroness, Lady Carberry of Muswell Hill. I think she said—she will correct me if I am wrong—that the Low Pay Commission found it difficult to separate the various cost pressures affecting the hospitality industry particularly, including the effects of higher or rising pay. I would argue, therefore, that that is not particularly evidence-based. It would seem slightly reckless to make that recommendation if you cannot determine the causes of the headwinds—but I will park that for the time being.

[Baroness Carberry of Muswell Hill (Lab)]

Perhaps I could recommend to the noble Lord that he takes time to read the Low Pay Commission’s report, which sets out its reasoning in full, and the evidence base it is drawing on. I may have made that point clumsily. I certainly did not mean to disparage the Low Pay Commission. I was trying to convey its sense that it could not find evidence to attribute any negative effects on the labour market for young people specifically to the national living wage as applied in the rates for those young people. It was trying to make an assessment of the extent to which the minimum wage rates were the cause of any detrimental effects on the labour market and could not find that it was the low pay rates which had that negative effect. The reasoning is set out in great detail in that report.

[Lord Sharpe of Epsom (Con)]

I thank the noble Baroness for that clarification. I will definitely make a point of reading that and perhaps return to it, depending on what I see.

I say to the noble Lord, Lord Hannett of Everton, who made some very good points, that the camel’s back is already broken when it comes to youth unemployment. It is at 16.1%—a point I made in my earlier remarks. That is higher than the EU average, which is a pretty woeful state of affairs. In answer to the noble Lord’s question, unemployment is at 5.2% now, but, as we also heard and as I reminded the House, the OBR has forecast that it will rise to 7%.

I am grateful to the noble Baroness, Lady Bennett of Manor Castle, for her remarks. I would also point her in the direction of the Resolution Foundation, which has a direct line into the Treasury; it was not just the Tony Blair Institute. For the time being, I rest my case on Green economics.

It is always a pleasure to hear from the noble Lord, Lord Sikka. I think his argument was, “If you agree with me politically, you have empathy; if you don’t, you haven’t”. In which case, I would argue that it is empathetic to try to keep people in jobs rather than price them out. That is empathy. I beg leave to withdraw my amendment.

Amendment to the Motion withdrawn.

Energy-Intensive Industry Electricity Support Payments and Levy (Amendment) Regulations 2026

Lord Sharpe of Epsom Excerpts

Wednesday 25th February 2026 Grand Committee

[Lord Sharpe of Epsom (Con)]

My Lords, I am very grateful to the Minister for his detailed explanation, but it is difficult to consider this statutory instrument without reflecting on the circumstances that have made it necessary. The Government have presented these regulations as a modest and technical adjustment—an increase in the network charge compensation from 60% to 90%—but the scale of that increase speaks volumes. We are not dealing with marginal fine-tuning; we are witnessing the expansion of an emergency support mechanism designed to shield our most electricity-intensive industries from energy costs that have become structurally uncompetitive. If our electricity market were delivering affordable power to the productive economy, such levels of compensation should not be required.

The Government’s own impact assessment, and my noble friend Lady McIntosh of Pickering, have acknowledged that, even after the British industry supercharger package, UK electricity-intensive industries will still face costs of around £93 per megawatt hour, compared with roughly £60 per megawatt hour in France and Germany. I go back to the impact assessment, because the first sentence is also extremely instructive:

“Great Britain’s energy-intensive industries … continue to face some of the highest electricity prices in Europe, even after existing relief measures, due to higher network charges and policy costs compared to competitor countries”.


Those two words, “policy costs”, are extremely instructive. These charges are the result of policy choices.

A recent study by the Adam Smith Institute underlined the scale of the challenge. It showed that British businesses are paying nearly double the price of power paid by their French counterparts. The report identified as the most important factor in that disparity the United Kingdom’s reliance on what it described as

“a combination of expensive renewables and a gas backstop”.

The chief executive of the trade body Ceramics UK has said:

“The relentless drive towards net zero is moving far faster than either kiln or fuel technology. Despite massive investment by the industry, achieving decarbonisation is extremely challenging and will lead to further deindustrialisation”.


Of course, the impact assessment also refers to the decarbonisation issue.

The Confederation of British Industry has warned that high energy prices threaten the United Kingdom’s standing as a manufacturing nation. Pointing to the competitive disadvantage faced by British firms—

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[Lord Sharpe of Epsom (Con)]

I do not imagine there is much clamour for me to start my speech again, so I will go back to where I got to; I made a note.

The Confederation of British Industry has warned that high energy prices threaten the United Kingdom’s standing as a manufacturing nation. It points to the competitive disadvantage faced by British firms relative to their continental counterparts. These are not the words of ideological opponents of decarbonisation; they are the considered assessments of employers who are attempting to maintain operations, jobs and investment in this country.

We have already seen troubling signals across energy-intensive sectors, including investment decisions delayed, production lines scaled back and uncertainty weighing heavily on the industries that form the backbone of our industrial base: chemicals, glass, ceramics and, most importantly, steel. Steel is vital for our construction, transport, defence and infrastructure, yet our steel producers have faced a combination of high electricity prices and carbon costs and political and policy uncertainty, which has left them at a clear disadvantage compared with their European competitors.

It is in that context that the continuing absence of a comprehensive steel strategy is so concerning. We were told that such a strategy would be forthcoming last year and then to expect it in spring this year. Spring has nearly run out, so where is it? We are still waiting. Businesses making multi-million-pound investment decisions cannot operate on the basis of repeated assurances and shifting timetables. I know that the Minister will not be able to answer the question of where the steel strategy is but perhaps he could write to us and let us know what is causing the hold-up.

The Government will say that the additional £100 million or so in relief and the estimated £131 million in annual savings for around 320 businesses demonstrate their commitment to protecting our industry. They will note that, as my noble friend Lady McIntosh of Pickering pointed out, the cost to households is forecast at no more than £1.50 per year. Yet the broader point remains: we are redistributing costs in order to compensate for a system that has produced persistently high electricity prices. Relief mechanisms may alleviate the immediate pressure but they do not address the underlying drivers of those costs or close the gap in competitiveness with Europe and our other competitors, particularly the USA.

As it stands, we will of course not oppose this instrument; the country and our strategic industries need this relief. However, we oppose the policy choices that have led to this most regrettable state of affairs.

[Lord Leong (Lab)]

My Lords, I thank all noble Lords for their valuable contributions to this debate. As I said in my opening speech, the increased relief offered through the network charging compensation scheme will provide critical support for foundation sectors across Great Britain, including steel, chemicals, cement, battery and semiconductor manufacturing, helping ensure delivery of the Government’s modern industrial strategy. These EIIs are located right across the country and provide thousands of well-paid jobs, both directly and in the wider supply chain. The Government intend to carry out a review of the data underpinning the British industry supercharger this year in order to assess how the scheme continues to meet the needs of EIIs and to ensure that support continues to be directed at those sectors most in need of the aid.

I will address some of the questions posed by noble Lords but, before I start, I pay tribute to the noble Baroness, Lady McIntosh, for all the work that she has done in National Energy Action, especially the action for warm homes. I acknowledge her expertise in this area. To address the point made by the noble Lord, Lord Sharpe, historic reliance on fossil fuels has left the UK exposed to volatile global energy markets, a vulnerability obviously highlighted by Putin’s invasion of Ukraine.

[Lord Sharpe of Epsom (Con)]

Yes, but of course we could have exploited our own reserves in the North Sea, and that was another policy choice. So that is not strictly a fair argument.

[Lord Leong (Lab)]

Well, it is one of the arguments, I will accept that. At the same time, I accept the point that this is a policy decision that was taken. But the mission is to make Britain a clean energy superpower, whereby we will reduce this dependency by transitioning to a diverse energy system based on renewables and nuclear.

At the end of the day, we also need to address—as the noble Baroness, Lady McIntosh, asked—the cost to consumers. The Government will continue to fund the NCC scheme through the EII support levy, which is charged on all licensed electricity suppliers to Great Britain, as the noble Baroness mentioned. To offset this, the Government will bear down costs across the energy system to ensure that domestic and non-domestic energy consumers do not see a net increase in their electricity bills as a result of the uplift of the NCC scheme. We are also taking action to reduce costs across the energy system, helping to ensure that the British industry supercharger and the British industrial competitiveness scheme are delivered in line with our wider priority of providing affordable power for businesses and households. The Government’s clean energy superpower mission sets out a long-term plan to strengthen energy security and reduce electricity prices by expanding clean energy and improving interconnections with EU markets.

The noble Lord, Lord Fox, asked about the broken energy market. This is precisely why the Government have the clean energy superpower mission, which is, as I have just said, to strengthen energy security and reduce electricity bills by expanding clean energy and improving the interconnection with EU markets. The noble Lord, Lord Fox, also made a point about other businesses. The supercharger is currently targeted at the EIIs most prone to carbon leakage. However, the Government will undertake a review of the eligibility criteria for the supercharger this year—we are undergoing a review of the various sectors.

[Lord Fox (LD)]

I thank the noble Lord for his response. The supercharger is in itself a good thing, but unless it is combined with a real understanding of the financial mechanisms by which the market is organised, it will not deliver energy at a price that will be less than our competitors around the world. So there is a second part; it is not just the generation and the distribution but the financial engineering behind that which will make it work.

On the second point on other businesses, I am very glad that the Government are having a review, but could they hurry up? If you sit down with any manufacturing business, anywhere in the country—not the ones that are benefiting from this scheme but those that are not—it will list energy costs as its number one or number two major concern. If this review does not get on with it, some of those businesses—hopefully not too many—will not be there to benefit from whatever the review comes up with.

[Lord Sharpe of Epsom (Con)]

Before the Minister comes back in, can I add to the noble Lord’s question? Of course, it is not just the manufacturing businesses that we are interested in; we need to attract data centres, which have enormous power requirements. That is partly for sovereign security reasons, as regards how we maintain our own data and the integrity of that data. What is being done to attract those businesses here? What sort of financial mechanisms are in place? Are there any plans to expand this sort of scheme to businesses that are not yet located here but that we so urgently need?

[Lord Leong (Lab)]

I acknowledge all the points made by the noble Lords, Lord Fox and Lord Sharpe. I am aware of the increased energy costs. I congratulate the previous Government on actually setting up the supercharger scheme and building it up. Yes, we need to look at the financial scheme and everything else, but we have what we have now, and we are increasing the relief from 60% to 90% as a stopgap—if I can use that word—to help businesses now. We are going to undertake the review to look at what we need to do, as a whole—especially on the SME point mentioned by the noble Lord, Lord Fox.

The supercharger is open to SMEs as well as larger businesses, provided they produce an eligible product. Currently, of the 550 businesses eligible for the scheme, 60% of them are SMEs, so SMEs are not being disadvantaged and can access the scheme. The key criterion is that the business, regardless of its size, is in an eligible sector—one that is highly traded and electricity intensive—and meets the business test for the relevant scheme.

I turn to the point that the noble Lord, Lord Sharpe, made about net zero. As I said earlier, this is a policy decision. Our clean energy superpower mission is a long-term plan to increase our energy security and reduce electricity bills. This includes investing in clean energy and strengthening our connections to the EU energy market, capitalising on the economic opportunities of the net-zero transition.

The other point to make is that these changes support our mission to bring down bills down for good, with homegrown clean energy or clean power that we control, ensuring that industry reaps the rewards of lower energy costs. We are developing further policies to narrow the electricity price gaps for non-domestic users. We intend to consult on options to reduce electricity costs and make low-carbon heat the economically natural choice. This will give stakeholders a clear opportunity to shape the next phase of electrification policy.

The noble Lord, Lord Fox, mentioned data centres. I must admit that I am kicking myself, because I know the answer to this: we are aware that data centres use massive energy and water, and we have a plan. I will write to the noble Lord setting out what we are doing as far as data centres are concerned. He also asked about our steel strategy. I had a quick check on BBC Online and, according to the BBC, spring is in March, April and May, so we are still getting into it. I hope to share our strategy with the noble Lord then.

As I said earlier, we are building on what the previous Government have done as far as the supercharger is concerned. We are supporting energy-intensive industries by uplifting the relief, and these regulations go some way to supporting that. I commend them to the Committee.

Retail and Hospitality Sector

Lord Sharpe of Epsom Excerpts

Thursday 22nd January 2026 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My Lords, I join in the general congratulations and welcome to the four maiden speakers. I enjoyed all their speeches very much and I wish them all the very best. I also thank my noble friend Lady Monckton of Dallington Forest for bringing this debate to the House and for her most eloquent introduction. I also wish her well with her new pub venture.

The Government have been in power now for almost two years and, frankly, it has been nothing short of a disaster for our retail and hospitality sectors. I applaud the efforts of noble Lords opposite to tease out some of the illusory positives, but the facts speak for themselves. I shall start with the £40 billion tax rate in this Government’s first budget, which included the disastrous jobs tax. This measure has frozen hiring across the sector and has led to unemployment going up every single month under their watch. UKHospitality has reported that 90,000 jobs have been lost in hospitality since the jobs tax was introduced—90,000 jobs that would exist if the Government had listened to His Majesty’s Official Opposition about the costs of their policies.

The House will be pleased to know that I am going to disappoint the noble Lord, Lord Fox, and not relitigate the entire Employment Rights Act, but I say gently to the noble Baroness, Lady Jones, that there are hundreds of thousands of lower-paid workers who lack all security because they have lost their jobs. That is a consequence of the Government’s policies.

The scale of the damage extends far beyond hospitality. Overall, official figures from HMRC show that the 2024 Budget has led to more than 250,000 jobs lost, and unemployment is now reaching pre-pandemic levels. That is a catastrophic failure of economic policy that was entirely predictable and preventable.

On retail specifically, the numbers are equally alarming. According to analysis by the British Retail Consortium, the changes to national insurance rates and thresholds have added close to £2.5 billion in employment costs to retailers. In retail, they say it is now 10% more expensive to hire a full-time worker and 13% for a part-time worker. As has been observed across the House, many of us got our first start in the world of work in part-time retail work. I certainly did when I worked for Sainsbury’s while I was still at school. Think about what those numbers mean for young people seeking their first position, for students looking for part-time work and for those trying to get back into employment. The ladder of opportunity that was offered to all of us is being denied to them.

If our small businesses thought that the November 2025 Budget would offer some respite, they were sorely mistaken because instead of relief, they received yet another hammer blow. Britain’s high streets now risk being crushed by what the Federation of Small Businesses rightly called a “tax timebomb”.

I turn to the business rates that are affecting shops, cafés, pubs and hospitality across the board. Specifically on pubs, I too worked in a pub, it was one of my first jobs, and I say to my noble friend Lord Hannan of Kingsclere that I very quickly learned lessons there, including which regulars to serve and which to swerve. Analysis from UKHospitality shows that the average pub faces a 15% rise in business rates next year. That will increase to £7,000 more by 2028-2029 and £12,900 over the next three years. These are average numbers. Hotels, as has been noted by a number of speakers, are hit even harder, with bills rising by £28,900 next year and £111,300 by 2028-29, totalling £205,200 extra over the next three years. It is estimated that, without urgent action, 540 pubs will close this year.

It is inevitable that not only our pubs but our breweries are struggling. In 2025, there were around 100 fewer breweries operating in the UK than the year before, which is a stark sign of the pressures that the sector faces. The Society of Independent Brewers has warned that some independent breweries have seen their rateable values rise by as much as 300%, alongside new and rising costs that many simply cannot absorb.

During a Question yesterday, a noble Lord and union baron opposite suggested that brewers were making record profits. Where are they? This sort of attack on bosses is so 20th century, it is, frankly, embarrassing. I say again to noble Lords opposite: please look at the facts.

These pressures are being felt by heritage and rural businesses as well. Data from Historic Houses, as my noble friend Lord Harlech explained, shows that changes to business property relief and agricultural property relief are having a severe impact. Some 54% of heritage business owners say they will be unable to develop or diversify, while 41% report that they will have to make redundancies or freeze hiring altogether.

The FSB has urged Ministers to make full use of the relief available for small businesses and allow a 20 pence reduction in the multiplier used to calculate bills—rather than reducing it by just 5 pence—which would bring the discount back into line with the previous level. Following on from what the noble Lord, Lord Fox, said, I will ask the same question of the Minister: will the Government commit to do this?

No doubt the Minister will talk a little about the £4.3 billion of relief measures and tapers that were aired on Tuesday during that Question that I have already referred to. But that is the economic equivalent, surely, of giving with one hand but taking with the other, but just not quite yet. Are the Government really saying that these businesses will be in a better place to play in a couple of years’ time? If they are, they need to explain why they think that, especially after the implementation of further legislation such as the Employment Rights Act.

For weeks, we have watched the familiar post-Budget ritual unfold: a series of Treasury leaks on business rates, first relief for everyone and then relief only for pubs. As my noble friend Lady Neville-Rolfe rightly observed, one might have hoped that after the chaos ahead of the 2025 Budget, the Treasury and Chancellor would have learned that governing by leak creates uncertainty and undermines confidence. But, sadly, it appears that old habits die hard. Businesses need decisions, not briefings. They need certainty, not speculation.

In addition to all these costs, businesses across the UK face electricity prices that are among the highest in Europe and around four times higher than in the United States. These costs are undermining competitiveness, stifling investment and, ultimately, suppressing economic growth. The reason for these persistently high prices lies in the ideological approach to our energy policy, particularly the ever-growing subsidies layered across the system to support renewables, with the burden passed directly on to businesses. As an aside, it is worth noting that, in December 2025, 16% of hospitality businesses reported that energy prices were their top concern. This is very real, and these high prices are a direct consequence of government choices.

As my noble friend Lord Borwick noted, beyond economic pressures, retail crime is now a daily reality for too many small businesses. The Association of Convenience Stores reported over 57,000 incidents of violence against convenience store workers last year, forcing retailers to spend more than £250 million on security just to keep staff safe. Shop theft and violence persist because enforcement has failed and repeat offenders face too few consequences. That is why it is so disappointing that the Government rejected a Conservative amendment to the Sentencing Bill that would have ensured that repeat offenders usually go to prison rather than receive suspended sentences. Why did the Government reject this amendment? The Official Opposition, industry groups, the Federation of Small Businesses and UKHospitality have warned the Government, but they have so far refused to listen.

Our high streets are having a very hard time; some might say that they are dying. Our pubs are closing at an accelerating rate, jobs are disappearing, unemployment is rising every single month and small business owners, who took the risk to start their ventures, are being forced to scale back or shut down entirely. That is not just poor policy; it is a comprehensive assault on the very fabric of our communities and the livelihoods of millions of hard-working people. The Government must act, and they must act now.

To conclude, I will ask the Minister a few more questions. First, when will the Government publish the details of their turn on business rates, and will they ensure that pubs, retail and the wider hospitality sector all receive business rates relief? That would go some way towards answering my noble friend Lord Smith of Hindhead’s question on clubs. A recent report from Sky News suggested that the Government have warned the hospitality sector that publicly criticising government policy could affect the availability of concessions or support. Is that true? Can the Minister shed some light on this report? Representatives from the Valuation Office Agency told the Treasury Select Committee that policy teams across the Treasury and the Ministry of Housing, Communities and Local Government had access to data enabling judgments to be made about business rate multipliers and reliefs. Given this evidence, can the Government confirm that Ministers had the relevant information on the impact of business rates when these decisions were taken? If so, why has the Treasury suggested otherwise?

I remind the Minister of a couple of other questions that were asked, to which I would particularly like answers. My noble friend Lady Verma asked a very good question on how many hospitality businesses the Minister thinks will still be operating this time next year. My noble friend Lord Young of Acton asked a very important question about Section 21 of the Employment Rights Act, and I would be grateful if the Minister can give us his thoughts on that. With that, I close my remarks.

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[Lord Sharpe of Epsom (Con)]

My Lords, can I make a request to the Minister? In the letter that he plans to write to us, can he explain how many consultations across the whole of government are currently being run? It is a huge number, and I would like to know what it is.

[Lord Leong (Lab)]

Is the noble Lord referring to on employment rights or does he mean across everything?

[Lord Sharpe of Epsom (Con)]

I mean everything across government.

[Lord Leong (Lab)]

I obviously do not have the figures here, but I will endeavour to find out and will write to the noble Lord accordingly.

Fair Work Agency: Small and Micro Businesses

Lord Sharpe of Epsom Excerpts

Wednesday 17th December 2025 Lords Chamber

Asked by

[Lord Sharpe of Epsom]

To ask His Majesty’s Government what assessment they have made of the potential impact of the proposed Fair Work Agency on small and micro businesses.

[Lord in Waiting/Government Whip (Lord Leong) (Lab)]

My Lords, this Government recognise the vital contribution that small and micro-businesses make to our economy. The Fair Work Agency will provide better support to the majority of businesses that want to do right by their staff to help them comply with the law. Assessing how best to support small businesses will be core to the Fair Work Agency. That is why we are putting business expertise at the heart of the agency through its advisory board.

[Lord Sharpe of Epsom (Con)]

My Lords, I am grateful to the Minister for his Answer, but small businesses continue to raise concerns about the Government’s one-size-fits-all approach to labour market policy. Can the Minister assure the House that in designing the structure of the Fair Work Agency, proper account will be taken of businesses with small or no HR departments?

Companies (Directors’ Report) (Payment Reporting) Regulations 2025

Lord Sharpe of Epsom Excerpts

Wednesday 15th October 2025 Grand Committee

[Lord Fox (LD)]

My Lords, I was surprised to hear the noble Lord, Lord Sikka, describe this SI as looking persuasive, as nothing he said prior to that indicated that that was how he felt. I will pick him up on one point on auditors, having been responsible for the content of dozens of annual reports at a corporate level: although the auditors may or may not have had a legal responsibility for directors’ reports and strategic reports, there is not a single directors’ report or strategic report for which I have been responsible where the auditors did not pick up and verify the points within. I am merely observing this; I do not think we need a debate on it because it is not relevant to the statutory instrument. It was just because the noble Lord brought it up.

Late payment remains a significant issue for UK businesses, as the Minister said—particularly small businesses but other businesses too. Our calculations show that, in 2024, small businesses were owed an average of £21,400 in late payments. This clearly has a significant effect on cash flow and it creates a real challenge.

Without cash flow, business viability is threatened and people are unable to invest in their businesses. Late payment undermines growth and drives some firms out of business. Some businesses use their suppliers’ balance sheets to fund their cash flow. We have seen notorious examples of this; for example, it seemed that Carillion’s entire business model was based on funding its activities through the cash flow of its supply chain. This sort of statutory instrument should be able to identify those operators effectively.

This legislation goes some way to strengthening transparency around how large companies pay suppliers. Here, I agree with the noble Lord, Lord Sikka: it is not a universal panacea but a small step, and we should be careful not to invest too much in this step. Businesses have been expected to report on a number of issues, such as their environmental performance and the number of women in particular roles, for many years, yet change at the corporate level has been very slow despite the transparency that was earned through legislation.

This SI should enable investors, auditors, shareholders and potential suppliers to get a better idea of what a company is about, as much thematically as definitively. If a company always files late numbers, that tells you something about how the business is managed; in some cases, one-off things may make that happen. As the Minister set out, though, there is more to be done. However, he did not mention the role of public procurement, which is vital to driving the right behaviours in business. I would like the Minister to talk about that and accept that the Government have a strong leadership role around public procurement and that there is still a lot of work to be done.

That said, taking into account its limited objectives, we support this statutory instrument.

[Lord Sharpe of Epsom (Con)]

My Lords, following on from the noble Lord, Lord Fox, so do we.

As the Minister rightly outlined, this instrument introduces new requirements for large companies to report annually, through their directors’ reports, on their supplier payment practices and performance. Although the content of these disclosures remains broadly in line with the existing reporting framework, the shift to include them in the directors’ report—alongside their existing publication on the government portal—is a notable development in terms of transparency and scrutiny.

We recognise the intent behind these regulations and support the objective of improving payment practices, particularly given the long-standing and well-documented impact of late payments on small businesses. At this point, I was going to take a detour into some statistics, but the noble Lord, Lord Fox, has shot my fox and quoted them already. We do have a few questions, though; they follow on from those asked by both of the previous speakers.

First, how will these new reporting obligations interact with enforcement? Transparency is important, but it must be coupled with accountability. Will the Government monitor compliance with these new requirements? Are there plans to review their impact in due course? I think I heard the Minister say that there is a plan to review these measures in due course; I would be grateful if he could confirm that.

Secondly, although the inclusion of this data in the directors’ report means that it will be seen by shareholders and auditors, does the Minister expect this alone to drive behavioural change? Beyond disclosure, what further steps are the Government considering to tackle poor payment practices where they persist?

Thirdly, we note that the instrument does not introduce changes to the underlying payment terms or practices; it merely brings reporting into a different format. Do the Government believe that there a risk that companies may comply in form but not necessarily in substance?

None the less, from these Benches, we continue to press for action to support small businesses and ensure that they are paid fairly and on time. On that, we share the ambitions of the noble Lords, Lord Fox and Lord Sikka. The problem of late payment is persistent, and while the measure may support transparency, it must not become a substitute for enforcement or cultural change. On that basis, we do not oppose these regulations. We urge the Government to treat them as part of a broader, ongoing effort to improve business practices and protect small suppliers.

[Lord Leong (Lab)]

My Lords, I am really conscious of what is happening in the Chamber, so I will try to be as comprehensive as possible and brief at the same time. I am really grateful to noble Lords across the Committee for their contribution. It is evident that we all agree that tackling late payments is crucial for driving the economy forward and I thank all those who have spoken in this debate. I will try and answer as many of the questions as possible, especially those from my noble friend Lord Sikka. If I have not answered all his questions, I will go through Hansard and write to him.

My noble friend Lord Sikka asked why there are so many places where businesses have to report on their payment method. This gives businesses two places where they can look for the same information. It should not increase costs, and it basically gives flexibility and the choice for businesses as to where they look for this information. I would say it is good that there is not only one place but various places that they can look for such information.

The noble Lord asked who enforces company law. I am sure that he will know that Companies House is also an enforcement agency, and we have invested a fair bit to ensure that it is able to enforce company law accordingly.

The point about directors’ reports not being audited is not correct. Auditors do audit directors’ reports under the Companies Act 2006. They must say whether information in the directors’ report is consistent with the annual accounts and must highlight any material misstatements or inconsistency.

The noble Lord also pressed on the Reporting on Payment Practices and Performance Regulations 2017, which also applies to LLPs. This requires large business in the UK to publish information biannually about their payment practices and performance to the GOV.UK portal. Initially introduced in 2017, these regulations were amended in 2024 and 2025 following a 2023 consultation. The current regulations do not apply to LLPs because LLPs do not publish a directors’ report.

The noble Lord, Lord Sharpe, asked about enforcement. The Financial Reporting Council has a responsibility to review the annual reports and accounts of large companies for compliance with accounting standards under the Companies Act 2006. Where potential non-compliance is identified or suspected, the FRC can write to the company for further clarification and will aim for voluntary amendment of the disclosure in subsequent periods. Where this is not possible, Section 456 of the Companies Act 2006 gives the FRC the power to apply to the court for a declaration that the directors’ report does not comply with the Act. In such circumstances, the court can order that the preparation and distribution of revised accounts be carried out at the directors’ personal expense.

The data produced by this report is analysed by the Department for Business and Trade and used to evaluate whether payment practices are improving. We can use this information to determine how beneficial the relations have been and where we can do more to help improve payment times. This regulation will be subject to statutory review on or before 6 April 2029.

Further, the Reporting on Payment Practices and Performance Regulations 2017 requires that large companies report their payment performance twice a year.

Jaguar Land Rover Cyberattack

Lord Sharpe of Epsom Excerpts

Tuesday 14th October 2025 Lords Chamber

[Lord Leong (Lab)]

My Lords, may I echo the words of the noble Lord about the late Lord Campbell? On behalf of the Government and this side of the House, I thank the late Lord Campbell for his public service to this country. He will be sorely missed in this House.

The National Cyber Security Centre has been working very closely with Jaguar Land Rover to provide support in relation to the incident. The NCSC response to the JLR incident is ongoing, but it is set to reduce as mediation takes place. Throughout the event, the NCSC has been capturing feedback to inform national and internal incident management practices. The NCSC will participate in a cross-government “lessons identified” process to review how best to improve the Government’s response, share information across partners and react to some of the unique pressures, such as those that the noble Lord mentioned. The NCSC would be happy to share aspects, depending on classification, of this process with noble Lords and other Ministers once it has been conducted.

[Lord Sharpe of Epsom (Con)]

My Lords, according to the National Cyber Security Centre’s latest report—and following on from the noble Lord, Lord Fox—in the year to September, there were 18 highly significant attacks, meaning attacks with the potential to have a serious impact on essential services. Given the increasing frequency of these attacks, can the Minister reassure the House that the Government’s plans for a centralised national digital ID database would not create a single point of potential failure, one breach away from exposing the entire British public to foreign espionage, hostile state interference or domestic data misuse?

[Lord Leong (Lab)]

I thank the noble Lord for that point. As far as private enterprise is concerned, the Government will not interfere in what private business organisations do. However, government can produce the tools and the guidance so that companies can have a more robust and resilient approach to cyberattacks. For example, the Cyber Governance Code of Practice shows a board of directors how effectively to manage the digital risks to the organisation. As I said earlier, all companies, if they have not done so, should conduct a comprehensive risk assessment of their digital and cybersecurity framework. They should apply for Cyber Essentials certification or the various other forms of certification and ensure that they have appropriate cyber insurance.

Limited Liability Partnerships (Application and Modification of Company Law) Regulations 2025

Lord Sharpe of Epsom Excerpts

Wednesday 10th September 2025 Grand Committee

[Lord Vaux of Harrowden (CB)]

My Lords, I thank the Minister for introducing these regulations. It is good to hear from him on the progress Companies House is making in cleaning up the register and the process of verification, although, as the noble Lord, Lord Sikka, has just demonstrated so clearly, it is a work in progress.

The Register of People with Significant Control (Amendment) Regulations 2025 are fine so far as they go, but they still leave it far too easy for persons with significant control to disguise themselves and, therefore, not be disclosed on the register as they should be. We discussed this loophole at some length during the passing of what the noble Lord called the 2023 Act. It relates to the use of undisclosed nominee share- holders.

During the process of passing the Act, this House passed an amendment on Report that would have required shareholders holding 5% or more to declare whether they are holding those shares on behalf of another person. That amendment was ultimately dropped during ping-pong after a compromise was reached with the then Government that inserted into the Bill a power for the Secretary of State to regulate to strengthen the rules around nominees’ shareholdings.

A PSC has an obligation to state that they are a PSC, but a dishonest actor would not do so. The problem we have is that the onus on reporting PSCs falls to the company, and the obligations on the company under the statutory guidance are quite weak. The statutory guidance says that the company should simply scan its share register and identify any shareholders who hold 25% or more. It is easy therefore for a PSC who wishes to hide their identity to structure their holdings via a number of shareholdings below that 25% threshold. For example, five holdings at 20% would give 100% control.

All the dishonest actor has to do to hide that control is find five willing people who are prepared to have their name on the shareholder register and hold shares on behalf of the dishonest actor as nominees. There is no comeback for those nominees. They have no obligation to disclose the nominee arrangement unless the company actively asks them to, which it does not have to do if the shareholding is below 25%. So the company could quite legitimately say that it had followed the guidelines and state that it does not have a PSC because it could not see any shareholders above the 25% threshold.

A whole industry of nominee companies has grown up, as you can see if you google “nominee shareholders”. If the Minister has not done that, I urge him to take a look. Although there are perfectly reasonable uses for nominee shareholdings, it is fair to say that most of the nominee companies make it pretty clear on their websites that the primary purpose is simply to hide the beneficial ownership of the shareholding, which they will do for just £200 a year. Very few of them point out the PSC rules. Forcing those nominees to lie on the record to hide the identity of the beneficial owner would, at the very least, concentrate their minds and make it much harder for a dishonest PSC to find nominees prepared to hide their identity.

My questions for the Minister are as follows. What analysis have the Government done on this since the Act was passed? Does he recognise the issue? Is there any plan to use the powers that were inserted into the Act during ping-pong to deal with it?

[Lord Sharpe of Epsom (Con)]

My Lords, I, too, am delighted to be able to welcome the Minister back to his place. I should have done so earlier, in the Chamber, but I am very pleased to see him there. I am grateful to him for introducing these three important instruments and for so clearly setting out the Government’s rationale. For the record, I should probably declare that I have been a member of an LLP, but I am not any more. Together, these instruments continue the implementation of the Economic Crime and Corporate Transparency Act 2023, with the shared objective of enhancing transparency, reducing fraud and strengthening the integrity of the UK’s corporate environment. For the record, I should say that I agree very much with the noble Lord, Lord Vaux. It is very good to hear the progress being made with regard to Companies House. We will come back to that.

Jaguar Land Rover Cyberattack

Lord Sharpe of Epsom Excerpts

Wednesday 10th September 2025 Lords Chamber

It is not for me to announce future business of the House, but when parliamentary time allows the Government will introduce the cybersecurity and resilience Bill to raise cybersecurity standards in critical and essential services, such as energy, water and the NHS.”

[Lord Sharpe of Epsom (Con)]

My Lords, as the nature of the threat that we face is evolving and the lines between hostile actors are blurred, do the Government have any plans to centralise verification and procurement approval, so that the best available commercial solutions designed to be able to tackle, investigate, monitor and counter cyberthreats and, indeed, critical tools such as secure messaging, can be delivered to the various agencies that need them without the need for the usual lengthy processes?

[Lord in Waiting/Government Whip (Lord Leong) (Lab)]

My Lords, before I respond to the noble Lord’s question, I take this opportunity to thank my noble friend Lady Jones of Whitchurch for her sterling worth as a Minister in this House. I am sure that all noble Lords will thank her for her performance at this Dispatch Box and her support to all Members across the House. I am sure that we will hear many more of her contributions from the Back Benches.

The new Commercial Digital Centre of Excellence for the UK central Government will substantially improve service delivery, enhance user satisfaction and drive efficiency, leveraging new procurement regulations. The provision of cybersecurity services is a part of this vision. In addition, through the Crown Commercial Service’s Cyber Security Services 3 agreement, we provide an official streamlined route to market for National Cyber Security Centre-assured services. I also need to say that the Government are working tirelessly to improve the cyber resilience of government systems, basing our efforts around the Government’s cybersecurity strategy. We have made important steps in understanding and mitigating cyber risks. We are now implementing a more interventionist approach to public sector cyber resilience to address key risks and better support departments.

Employment Rights Bill

Lord Sharpe of Epsom Excerpts

Report stage
Wednesday 23rd July 2025 Lords Chamber

[Lord Goddard of Stockport (LD)]

The noble Lord, Lord Hunt, will say “Hear, hear” no more because we cannot support Amendment 149A, which is a new amendment that proposes removing Clause 72. I will tell the House why we cannot support it. On Monday I supported the noble Lords, Lord Hunt and Lord Sharpe, when we were very critical of the Government for tabling amendments on Report. People nodded wisely and said that it is not a good thing to do, yet this amendment was tabled today or yesterday. It has had no time for discussion or debate. It has had no time for people to understand its nuances. We know that it takes a big chunk out of the Government’s manifesto pledge Bill, and that does not seem fair to me.

In our view, legislation should be done through constructive amendments. If you do that, you end up with a compromise, whether it is through ping-pong or by persuading the Minister to change their point of view. It is almost like taking the sledgehammer again, and that is not good politics. It is not good for the House, and it is not good for Members. Lots of Members come into these debates, not all the time, and try to get a flavour of what is going on. They might hear that Amendment 149A, which sounds fairly reasonable, has been put forward. It is not fairly reasonable; it takes an enormous chunk out of the Government’s Bill, and that cannot be right for democracy. I have criticised Ministers many times, but we should be mindful that it is in the manifesto and move legislation via amendments rather than trying to remove huge chunks of legislation. On that basis, we will not support Amendment 149A.

[Lord Sharpe of Epsom (Con)]

My Lords, on balance, it is a great pleasure to follow the noble Lord, Lord Goddard. I will speak to Amendments 148, 149A, 149ZA and 150 standing in my name and that of my noble friend Lord Hunt of Wirral. Before I do that, I thank the noble Lord, Lord Burns, for his common- sense amendment. We think political contributions must always be a matter of choice, not a default. That seems to us a fair and democratic principle, and the Government ought to listen. I was particularly pleased to see that the Attorney-General was in his place to listen to the excellent arguments advanced by my noble friend Lady Cash, which all pertain to international law. I hope he was paying attention. If the noble Lord, Lord Burns, decides to test the opinion of the House, we will support him.

I turn to Amendment 148. On 8 July, the Secretary of State for Health and Social Care, Wes Streeting, remarked rather pointedly that despite the fact that the majority of resident doctors did not vote for strike action, the BMA is now preparing for strike action and it is completely unnecessary. Who can blame him? Strikes are happening under the existing law, and now this Government propose to remove the 50% threshold, the very last democratic safeguard that ensures that strikes have substantial backing. What would that do? It would significantly lower the bar for strike action and allow a smaller minority to cripple vital public services. It is worth bearing in mind that it is public services we are talking about because that is where the bulk of union members are. One has to wonder whether the Government agree with their own Health Secretary. If they do, why are they proposing this? If they do not, will Mr Streeting be invited to correct his error on the record? Do the Government share the disappointment that he expressed on 8 July about the BMA’s strike action or was that simply a performance for the cameras, a convenient public relations stunt, while others quietly dismantle safeguards and seek to make extremists more powerful?

On Amendments 149A and 150A, I am grateful to my noble friend Lord Jackson of Peterborough for his words. Earlier this month, Norman Tebbit, Lord Tebbit, died after a long period of illness. One of his enduring legacies was his role in turning around an unemployment crisis that peaked at 11.5% in 1982. Thanks to the reforms introduced on his watch, the rate fell sharply thereafter. The success was later acknowledged even by the Blair and Brown Governments, who accepted the new consensus, a fair balance between workers’ rights and the flexibility that businesses need. It was the late Lord Tebbit who warned us that we do not intend to see again the scenes of intimidation, mass picketing and political strikes that disfigured our country in the 1970s. That warning remains as relevant today as it was then. Supervision of picketing is an essential safeguard. It ensures that industrial action remains peaceful, lawful and accountable. Removing these provisions, as the Government propose, risks returning us to the chaos and intimidation of the past, as described so ably by my noble friend Lord Evans of Rainow.

Amendment 149ZA is crucial to protect airlines from unfair financial risk caused by conflicting notice periods. This was originally tabled in Committee by the noble Lord, Lord Hutton of Furness. He raised a timely and important issue. As he did not retable the amendment for Report, we did because, frankly, the Committee debate was very late, it was truncated, and the Minister’s response was inadequate.

I refer noble Lords to col. 1342 of Hansard on 10 June for the detailed arguments of the noble Lord, Lord Hutton, but in essence they are that, under current law, airlines must give at least 14 days’ notice of industrial action to avoid costly compensation claims under passenger rights legislation—namely, UK261—unless there are extraordinary circumstances, and a ruling of the European Court of Justice in 2019 made it clear that a strike by an airline’s own staff is not considered an extraordinary circumstance.

The amendment would therefore simply protect airlines from having to pay hundreds of millions in compensation for cancellations caused by strikes. Reducing the notice period to 10 days would expose airlines to up to four extra days of compensation liability and a serious and unavoidable financial burden that would inevitably be passed on to passengers, making family holidays even more expensive for working people. The amendment would ensure that the 14-day notice period remained for industrial action affecting airlines, and it would align industrial relations law with passenger rights and protect vital UK businesses from crippling— I will be charitable and say probably unintended—costs.

In Committee the noble Lord, Lord Katz, argued that this would represent a sectoral carve-out, but that is not a logical argument as the sector is governed by a rule that does not apply to any other. It is therefore entirely consistent with a level playing field. It is the contradiction in legislation that puts airlines at a disadvantage.

Finally, I agree fully with my noble friend Lord Leigh about seeking to maintain the requirement that trade unions should report their political expenditure in their annual returns. I shall support him too, should he wish to call a Division.

--- Later in debate ---

Moved by

[Lord Sharpe of Epsom]

148: Clause 65, page 96, line 23, leave out subsection (2)
Member's explanatory statement
This probing amendment would reinstate the 50% threshold requirement for industrial action to be voted on by a trade union and seeks to probe whether the Government perceives a risk to the democratic integrity of trade union ballots for industrial action as a result of the provisions to remove the 50% requirement.

[Lord Sharpe of Epsom (Con)]

My Lords, time and again we hear about workplace democracy from the Government Benches, and then they introduce this. So yes, I would like to test the opinion of the House.

--- Later in debate ---

Moved by

[Lord Sharpe of Epsom]

149A: Leave out Clause 72

[Lord Sharpe of Epsom (Con)]

I would like to test the opinion of the House.

Employment Rights Bill

Lord Sharpe of Epsom Excerpts

Report stage
Monday 21st July 2025 Lords Chamber

Moved by

[Lord Sharpe of Epsom]

135: Schedule 6, page 227, line 12, leave out sub-paragraphs (3) and (4)
Member’s explanatory statement
This amendment and others in the name of Lord Sharpe maintain the existing 10% membership threshold for union recognition applications by removing provisions that would have allowed this threshold to be modified through secondary legislation.

[Lord Sharpe of Epsom (Con)]

My Lords, I rise to speak to Amendments 135 to 143, all in my name and that of my noble friend Lord Hunt of Wirral. When this power first appeared in the Bill, the Minister in the other place, Mr Justin Madders, admitted that the Government had not even decided whether they were intending to use it. First, they said there would be no consultation, then they changed their minds. That is not a serious way to make laws; it is confused and confusing, especially for, as ever, SMEs, which are, as we have discussed many times during the passage of the Bill, in a state of uncertainty about the basic rules governing their own workplace.

If the membership threshold was reduced to 2%, as the Government appear to envisage, in a company that employs 250 employees, it would require only five members in the bargaining unit to request a ballot. That would mean that a union could gain bargaining authority over workplace conditions, pay and leave arrangements for the entire bargaining unit based on the explicit support of a tiny number of employees. This raises questions about whether such an arrangement adequately reflects workforce preferences, particularly for employees who may value direct engagement. That potentially creates a situation in which unions may submit many speculative requests for recognition, with little depth of membership in a proposed bargaining unit. The process comes at a cost to the employer of both managing and arranging access and facilities, and to the Central Arbitration Committee for supervising these potentially speculative ballots.

I really think this speaks for itself; there is not a huge amount to say in addition, although I would note that the noble Lord, Lord Hendy, talked earlier about workplace democracy. Whatever it is, it is not this, so I beg to move.

[Lord Lucas (Con)]

My Lords, I have Amendment 144 in this group. We discussed the same amendment in Committee. If we do not have a number, it means that, essentially, one employee could trigger union recognition. Surely that is not something we should impose on small businesses.

--- Later in debate ---

[Lord in Waiting/Government Whip (Lord Katz) (Lab)]

I thank all noble Lords for the short but focused debate we have had on this set of amendments, moved and spoken to by the noble Lord, Lord Sharpe of Epsom. I particularly pay tribute to my fellow GMB member, the noble Lord, Lord Goddard of Stockport.

As I set out in Committee, we believe that current thresholds pose too high a hurdle in modern workplaces, which are, as we know, increasingly fragmented. We want therefore to be able to consider whether the 10% membership threshold on application should be reduced in future. The reason why a range of 2% to 10% has been chosen is that, in 2020, the previous Government reduced the threshold that triggers information and consultation arrangements from 10% to 2% in the workplace, so what the Bill proposes aligns with that. But, to be absolutely clear, we want to consult before making any decisions on whether we should bring forward secondary legislation and by how much the threshold should be varied, if at all. We will consult businesses—including, of course, small and medium-sized businesses—as part of that consultation process.

Should we decide to bring forward secondary legislation in the future, that legislation will be subject to full debate in both your Lordships’ House and the other place. We will carry out an impact assessment at that time that will consider impacts on businesses, including, as before, small and medium-sized businesses.

I want to reassure all noble Lords, and the noble Lord, Lord Sharpe, in particular, that, whatever the application percentage in the bargaining unit is or may be, the fact remains that unions would still need to obtain a majority of a bargaining unit in a trade union recognition ballot. That point is fundamental to the misconception that is coming from the Benches opposite about what this part of the Bill does or does not do. To be clear, this is not, to address the point of the noble Lord, Lord Fuller, the “tyranny of the minority”; in fact, it is absolutely contrary to that point. This is ultimately about a trade union having to win a majority.

Experience has shown that this is not easy to achieve. The union will have to make a good case to persuade the majority in the bargaining unit to vote for recognition in a recognition ballot overseen by an independent, qualified person. It is in the trade union’s interest to be confident that it can win a majority in the ballot, otherwise it would still be prevented, as is currently the case, from applying for another statutory recognition ballot in the same bargaining unit for three years. That is why it is highly unlikely that a union will apply for statutory recognition when there is only one worker who is a member of that union. Indeed, if experience tells us anything, it is that it is highly likely that trade unions will continue to focus their efforts on larger workplaces where there is greater bang for the organising buck.

The union recognition process is generally consensual, and that is a good thing. In the nine years from 2017 to 2025, only 375 recognition applications have gone to the CAC. Close to half of the 1,476 recognition applications received since 1999 were withdrawn by unions at various stages of the recognition processes, in many cases because the parties have reached a voluntary agreement for recognition. The confrontation that has been set up by some speakers from the Benches opposite is a chimera; this is not the reality of organised workplaces. Given that, I ask the noble Lord, Lord Sharpe of Epsom, to withdraw Amendment 135.

[Lord Sharpe of Epsom (Con)]

I am grateful to the Minister for setting out the context in a bit more detail, but I am afraid I am not entirely persuaded. I would like to test the opinion of the House.