House of Lords

Tuesday 13th May 2025 Lords Chamber

Tuesday 13 May 2025

14:30

Prayers—read by the Lord Bishop of Lichfield.

Introduction: Lord Harper

Tuesday 13th May 2025 Lords Chamber

14:39

The right honourable Mark James Harper, having been created Baron Harper, of Forest of Dean in the County of Gloucestershire, was introduced and took the oath, supported by Lord Taylor of Holbeach and Lord Young of Cookham, and signed an undertaking to abide by the Code of Conduct.

Introduction: Lord Massey of Hampstead

Tuesday 13th May 2025 Lords Chamber

14:45

Stephen Leigh Massey, having been created Baron Massey of Hampstead, of Lacock in the County of Wiltshire, was introduced and took the oath, supported by Lord Polak and Lord Harrington of Watford, and signed an undertaking to abide by the Code of Conduct.

Police, Prison and Probation Officers

Tuesday 13th May 2025 Lords Chamber

Question

14:49

Asked by

[Lord Woodley]

To ask His Majesty’s Government what steps they are taking to improve the morale, recruitment and retention of police, prison and probation officers.

[The Minister of State, Ministry of Justice (Lord Timpson) (Lab)]

I know that noble Lords will join me in paying tribute to the amazing work of police, prison and probation officers, and to the importance of our recognised trade unions in representing them. The Government inherited a justice system in crisis, which placed a huge burden on our staff. I am committed to making HMPPS a world-class organisation, and I know my Home Office colleagues are working hard to give police officers the support they need to tackle crime and keep the public safe.

[Lord Woodley (Lab)]

I thank the Minister for that response. In a civilised society, our police, prisons and probation services must never be run on the cheap. Crumbling prisons and shortages of prison and probation staff are endemic. Therefore, does the Minister agree that it was a terrible mistake by the last Government not to protect these vital public services, which are so important to protecting the public, when they unleashed their short-sighted and counterproductive austerity agenda?

[Lord Timpson (Lab)]

It is clear that we inherited a mess from the previous Government, with a prison system on the verge of collapse and decimated neighbourhood policing numbers. This Government took decisive action to alleviate the immediate capacity pressures and are committed to making sure that this situation never happens again. That is why we published the first annual statement on prison capacity and a 10-year prison capacity strategy, and commissioned the Independent Sentencing Review. This Government are also taking steps to rebuild neighbourhood policing, which is why we have made £200 million available in 2025-26 to support the first steps of delivering 13,000 more neighbourhood policing personnel.

[Lord Marks of Henley-on-Thames (LD)]

My Lords, last week the Minister promised a “seismic shift” to improve professional standards across the Prison and Probation Service. He described reports of bullying, discrimination and harassment as

“a wake-up call and an opportunity to change”,

and we agree. Retention rates are very bad: 10.4% of probation officers are leaving annually. For Probation Service officers, who include assistants and trainees, it is over 12%. They have too much to do, often with little experience; 7.8% of prison officers leave every year. Low morale is a major contributor but so are pay and conditions, given the challenges they face. What extra resources will the Government put into recruitment and retention in those services?

[Lord Timpson (Lab)]

Last year we recruited 1,000 extra probation officers, and this year we are recruiting 1,300. It is clear that it is not just about recruiting staff and training them; it is about embracing technology to help them do their jobs better. Last week we announced that we would agree to all 12 recommendations of the Rademaker review, and we are very grateful to one of HMPPS’s non-execs, Jennifer Rademaker, for all the work she did on it. It is totally unacceptable that our staff have to work in conditions where they are bullied, belittled and sexually harassed, and as Minister I am determined to stamp it out. Retention rates are not where I would like them to be. I am working very hard to make sure that HMPPS is a world-class organisation. That means high rates of training, high rates of morale and high rates of success.

[Lord Sandhurst (Con)]

My Lords, the Ministry of Justice reported a 12.5% leaving rate among band 3 to 5 prison officers for the year ending December 2024. Considering that the number of new recruits decreased by 35.4% during the same period, will the Minister explain what practical steps the Government are taking to improve both recruitment and retention among prison officers?

[Lord Timpson (Lab)]

The latest figures are that we have 97% of the number of staff we need in our prisons, but clearly we still have a bit to go. Also, a number of those staff are yet to be fully trained and in the right place. Before I was asked to come and do this role, I did a full review into the training of prison officers. I am fortunate that it is more likely to happen now I am in this role, because training is a big part of the reason why some of our staff leave too early. We want to make sure that people build their whole careers in the Prison Service, because the skills they learn—those soft skills about how they speak to prisoners and offenders—really make the difference in helping turn someone’s life around.

[Lord Rogan (UUP)]

My Lords, the Police Service of Northern Ireland currently has an all-time low of 6,300 officers. The chief constable is seeking approximately £200 million additional funding to increase the headcount to 7,000 in 2028. While I acknowledge that responsibility for funding the PSNI is devolved, national security is clearly the responsibility of His Majesty’s Government. Given the specific threat from republican terrorists to police and prison officers in Northern Ireland, does the Minister agree that it is incumbent on UK Ministers to step forward to bridge this funding gap to help keep these brave men and women safe?

[Lord Timpson (Lab)]

I am pleased to say that we as a Government are putting an extra £1 billion into policing, which will go a long way to addressing the neighbourhood policing issues that we have discussed.

[The Lord Bishop of Gloucester]

My Lords, last week I observed the intensive supervision court in Birmingham, where women serving community orders for low-level offences are closely monitored by judges. Probation staff play a pivotal role. It is clear that the work is high and intense. What steps are the Government taking to urgently ensure that problem-solving courts have the best chance of succeeding—and, indeed, other creative community proposals that we hope will come out of the Independent Sentencing Review?

[Lord Timpson (Lab)]

I hope we will not have to wait too long for the Independent Sentencing Review; I may need to ask some noble and learned Lords about what the exact dates are. The best day I have had in this job—and I have had lots of really good days—was going to the intensive supervision court in Birmingham. It was incredibly uplifting seeing female offenders coming up from the cells in the morning looking very ill and then seeing how the lives of those who have been engaging with the intensive supervision court for six months have changed. But they knew that they had to engage with probation, housing and often drug and addiction work—and, if they did not, they went to prison.

[Lord Reid of Cardowan (Lab)]

My Lords, I thank the Government and congratulate them on the re-establishment and re-emphasis of neighbourhood policing. The running down of neighbourhood policing was a terrible mistake by the last Government. Will my noble friend the Minister accept that neighbourhood policing is not just an essential element of effective policing but crucial to the confidence that the public have in the police service, because they can see police on the beat and in their own neighbourhood?

[Lord Timpson (Lab)]

Neighbourhood policing is the bedrock of British policing, and it is the right model for us. We lost 20,000 police officers under the last Government, but we expect up to an initial 3,000 neighbourhood officers in neighbourhood policing roles by the end of next year. Every community deserves visible, proactive and accessible neighbourhood policing, with officers tackling issues that matter to people.

[Lord Bailey of Paddington (Con)]

My Lords, as I am sure the Minister will know, police services countrywide struggle to recruit members from the black and ethnic-minority communities, and that is mainly because of the very low level of morale among black serving officers. What work is the Minister specifically doing to support the morale of those police officers?

[Lord Timpson (Lab)]

I am pleased to know that we have a race action plan that we are working with police constables; it is really important that we recruit fantastic people and make sure that we represent the communities we serve.

[Baroness O'Loan (CB)]

My Lords, in answer to the noble Lord, Lord Rogan, the Minister said that there was an extra £1 billion coming into policing this year. However, not one penny of that £1 billion will go to Northern Ireland because policing is a devolved matter. Given that the Northern Ireland policing budget is significantly eroded by paying out for dealing with legacy in Northern Ireland, when will the Government create ring-fenced funding to deal with the situation in Northern Ireland, which will then allow Northern Ireland’s police to serve the community in the way in which they wish—properly staffed and properly resourced?

[Lord Timpson (Lab)]

I will pass that question on to the Northern Ireland Secretary responsible for legacy issues and write to the noble Baroness.

[Baroness Blower (Lab)]

My Lords, the Government are clearly taking all the issues across the criminal justice system very seriously, but does my noble friend agree that there is a slight risk that not everything will be dealt with entirely coherently? Does he agree with the many voices in this Chamber and beyond that what is really needed is a royal commission on the whole criminal justice system, as promised by the last Government but not delivered?

[Lord Timpson (Lab)]

We are a Government of action and I am a Minister of action, and I am already getting going. For me, it is really important that we have had the Independent Sentencing Review, which I hope we will be talking about shortly, and the Leveson review is ongoing. Those are significant reviews, and we will implement those reforms quickly.

Uncollected Financial Penalties

Tuesday 13th May 2025 Lords Chamber

Question

15:00

Asked by

[Baroness Levitt]

To ask His Majesty’s Government what steps they are taking to deal with uncollected financial penalties such as fines, costs and confiscation orders.

[The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Ponsonby of Shulbrede) (Lab)]

My Lords, it is essential that financial penalties are collected and enforced. His Majesty’s Courts & Tribunals Service uses robust methods to do so, including taking money from an offender’s benefits or salary and seizing and selling goods. Offenders can be sent to prison for non-payment to the court. In 2023-24, HMCTS collected over £671 million in financial penalties. The Government are investing in the replacement of outdated IT systems and are also planning legislative changes which will reform the confiscation order regime.

[Baroness Levitt (Lab)]

My Lords, I thank my noble friend the Minister for his Answer, but in March 2024 there were £4.4 billion-worth of unpaid criminal court fines, compensation orders, victim surcharges, et cetera. Does the Minister agree that steps should be taken urgently to deal with this unacceptable situation, which is grossly unfair on those who pay up and feeds scepticism in the judiciary and society at large about the effectiveness of non-custodial sentences?

[Lord Ponsonby of Shulbrede (Lab)]

I thank my noble friend for that supplementary question. Of the £4.4 billion that she referred to, £2.7 billion is from confiscation orders. Of the £2.7 billion, £1.2 billion is purely interest—interest is paid at 8% on the confiscation order amount. There are legislative changes in the Crime and Policing Bill, which is currently in the other place, but I think it is worth pointing out to my noble friend that, in existing legislation, there are only very limited circumstances where a Crown Court can judicially cancel an order, and it contains no powers to administratively cancel a confiscation order. That means that the confiscation order amount accrues over the years, including the interest. With respect to financial penalties, by which I mean fines, the picture is very different. Over a five-year period, 80% of all fines are collected, and that figure has remained flat over the last few years. While I accept that the overall number is increasing, that gives an unfair picture of the current situation, and the Government are addressing the reasons why that is an unfair reflection of the position.

[Lord Hogan-Howe (CB)]

My Lords, it has always been a challenge to collect fines, because they are often imposed on people who cannot pay them. One of the areas in which progress can be made is criminal assets. This is usually around organised crime, which is motivated by profit. What I think the enforcement agencies have not invested in—and I invite the Minister to inquire—is having forensic accountants, who are people who can trace assets in often complex financial arrangements. At one stage, the NCA had one, as did Police Scotland. Can the Minister find out, or tell us, how many forensic accountants there are? People may not know, but the police can keep half of the cash they seize and 15% of other assets that are confiscated—not for themselves—

[Noble Lords]

Oh!

[Lord Hogan-Howe (CB)]

This is not for themselves but for the purpose for which they were formed.

[Lord Ponsonby of Shulbrede (Lab)]

I thank the noble Lord for that question. It is worth saying that, if somebody fails to pay a fine and they are imprisoned for that failure to pay, then the fine is written off. However, if somebody fails to pay a confiscation order and they are sent to prison, the compensation order amount is not written off. They are different. The other point worth making goes to the point that he made about the work of forensic accountants. A lot of the assets which confiscation orders are applied to are hidden assets, so there is an estimate—an informed guess, if I can put it like that—of the amount when making that confiscation order. Nevertheless, I take the point that he makes in his question. If I can add anything on the number of forensic accountants available to give advice to the court, I will write to him.

[Lord Bellingham (Con)]

My Lords, is the Minister aware that embassies across London owe a total of nearly £150 million in unpaid fines and charges? Obviously, under the Vienna convention, embassies are exempt from taxes but not from these fines and charges. What will the Government do about it?

[Lord Ponsonby of Shulbrede (Lab)]

What the Government will do is write to the noble Lord. After much time in this House, I know that this issue comes up very regularly. If there was a simple answer to that question, I am sure it would have been found. Nevertheless, it is a real issue. It undermines confidence in the parking fines system, and it undermines confidence within the wider community if certain groups are not paying their fines. It is a serious issue, and I understand that. If there is more I can say, I will write to the noble Lord.

[Lord Marks of Henley-on-Thames (LD)]

My Lords, as the noble Lord, Lord Hogan-Howe, said, many financial penalties go uncollected. Does the noble Lord agree that we are, in respect of such offenders, imposing far too many financial penalties? Should we not be making more use of community service and the probation services in those cases where there is no hope of collecting payment?

[Lord Ponsonby of Shulbrede (Lab)]

It is an interesting question—one which I used to grapple with regularly when I sat as a magistrate in Westminster. The noble Lord is asking that the sentencer increase the sentence from a fine to a community order, increasing the sentence for certain people who are unable to pay their fines. It may be that this is taken into account when sentencers make that judgement, but it is an inflationary—if I could use that word—solution to a problem. Nevertheless, of course, when sentencers impose fines, they have to take into account the means of those whom they sentence.

[The Earl of Effingham (Con)]

My Lords, there is £5 billion-worth of bitcoin cryptocurrency in government accounts seized from organised crime relating to Jian Wen. Please allow me to repeat that: £5 billion that is in the Government's bank account. I ask a similar question to the one that the noble Lord, Lord Lamont of Lerwick, posed to the Chancellor of the Exchequer four months ago: what are the Government’s plans for this windfall?

[Lord Ponsonby of Shulbrede (Lab)]

I do not know the answer to that question. If the £5 billion is in the Government’s accounts, I do not know how free they are to use that money. If there is anything more I can add to that answer, I will write to the noble Lord.

[Lord Faulkner of Worcester (Lab)]

My Lords, when my noble friend writes to the noble Lord opposite about unpaid parking fines by embassies in London, would he also write to me and include in my letter the details of unpaid congestion charges by embassies in London? That is an amount that has escalated almost out of sight. As the noble Lord opposite has said, this is not a tax; it is a payment for services provided in London.

[Lord Ponsonby of Shulbrede (Lab)]

Yes, if I am able to find those figures, I will indeed write to my noble friend.

[Lord Sikka (Lab)]

My Lords, since 2018 only seven unexplained wealth orders were issued, and not a single penny of wealth has been recovered since 2019. This seems to undermine the Government’s offensive against unexplained wealth’s illicit financial flows. Can the Minister explain whether anything has changed since the Criminal Finances Act was introduced in 2017?

[Lord Ponsonby of Shulbrede (Lab)]

I thank my noble friend for that question. The figures he quoted reflect how difficult it is to track down the money when criminals are hiding it. It takes hugely intensive work, and it is something I have personally received presentations on. The issue is one of resourcing to a certain extent, but there is no lack of will to pursue criminals who have unexplained wealth. They need to be tracked down and charged as appropriate.

Scientists: Working in the United Kingdom

Tuesday 13th May 2025 Lords Chamber

Question

15:09

Asked by

[Viscount Stansgate]

To ask His Majesty’s Government what action they are taking to encourage scientists from around the world to do their research and associated work in the United Kingdom.

[The Minister of State, Department for Science, Innovation and Technology (Lord Vallance of Balham) (Lab)]

The UK has a world-leading science base, supported by some of the top universities and research institutions, and offers prestigious fellowships and professorships through UKRI and the national learned academies. As the immigration White Paper sets out, we will now go further in ensuring that the very highly skilled, including top scientists and researchers, have opportunities to come to the UK and access our targeted routes for the brightest and best global talent. We will set out more details in due course.

[Viscount Stansgate (Lab)]

My Lords, I like to think that my noble friend the Minister’s Answer does not go quite as far as he personally would want it to. In America, the Trump Administration are mounting an attack on universities and scientific research. That is a matter for them, but for us it offers an unparalleled opportunity, and we must grasp it. Can the Government not develop proposals that would attract, encourage and facilitate not only talented individuals but whole research groups, who could come to do their work in universities around the UK? Does my noble friend not agree that this would offer the prospect of a brain gain of immeasurable potential for our future growth?

[Lord Vallance of Balham (Lab)]

I thank my noble friend. We have always been the beneficiaries of brain gain; we have been attractive to top-class overseas researchers for many years. Indeed, about one-third of our Nobel prize winners are first or second-generation immigrants. For 2025-26, UKRI has roughly £770 million for talent funding, of which £170 million is for future leader fellowships. There is an opportunity, as there always is, to attract people from overseas to the UK, both individuals and groups; indeed, there are mechanisms in place to do so. I am looking very carefully at what further mechanisms can be put in place to make sure we remain a country that attracts the very brightest and best.

[Lord Clement-Jones (LD)]

My Lords, the Government’s immigration White Paper, as the Minister said, expresses the ambition to attract top global talent, including scientists. However, measures such as the increased skills charge, alongside high UK visa costs and the challenging context of flat cash real-terms cuts in core research funding, create barriers to recruitment. The Government seem not to be very clear whether they want to attract international scientists or not. Do we not need a proper long-term plan with increasing investment to maintain the UK’s research leadership and attract talent?

[Lord Vallance of Balham (Lab)]

The current SR period has £20.4 billion for R&D, which is the highest amount there has been. Of course, a proportion of that is about talent attraction. The talent attraction announced in the White Paper was geared towards the global talent visa—the level of highly skilled people who can bring great value added to this country. The desire is to increase the threshold for the skilled worker visa to aim for more qualified, more talented people. On the high-talent end of the system, there are clear measures in the immigration White Paper to try to get those systems to work better and faster. The cost of visas and the health surcharge is now met on UKRI grants and on Horizon Europe grants.

[Lord Tyrie (Non-Afl)]

The Minister will have sensed the widespread support for the Government’s plan to launch an initiative in this field. Can we have a date on which this is going to be published, and clarity on whether it will target American academics, who have become very unsettled by the assault on academic freedom in the United States? Can he also tell us whether the Prime Minister’s recent announcement on immigration will have any adverse consequences for what was originally planned?

[Lord Vallance of Balham (Lab)]

As I said in answer to an earlier question, I am keen to make sure we have a robust system to attract the best talent from all over the world—this is not targeted at any particular place—and I will make announcements about that very shortly. In the immigration White Paper, the routes for a global talent visa are specifically pulled out as ones that will become easier. They will be facilitated to make this happen, as will those in other highly skilled areas. There are measures in the White Paper that make that easier for the highly skilled individuals we need both for the research sector and, indeed, the tech sector and companies.

[Lord Turnberg (Lab)]

My Lords, I am sure my noble friend is aware of the large number of charities that support research that brings overseas senior academics to the UK. I mention the Royal Society Wolfson Fellowships; Weizmann UK, which brings scientists from the Weizmann in Israel to the UK; and a large number of others. They contribute enormously to our science space.

[Lord Vallance of Balham (Lab)]

I thank my noble friend. He is quite right; there are a number of schemes from charities and, indeed, as I have said, from the academies. Over £200 million of funding goes to the national academies to support their core activities. The vast majority of that is spent on research and talent schemes. Some £400 million was given to the Royal Society and the Royal Academy of Engineering as an endowment for their specific fellowship schemes—the Faraday Discovery Fellowships, and, for engineers, the Green Future Fellowships. There are many charities that also contribute, and we are fortunate in this country to have charities, including the Wellcome Trust, that provide substantial funding for fellowship schemes.

[Lord Mair (CB)]

My Lords, other countries have been quick to act decisively in the light of the Trump Administration’s severe cuts to US science budgets. Is there not a real danger of the UK falling behind? Should this not be addressed very urgently?

[Lord Vallance of Balham (Lab)]

I reiterate the point I made: it is very important that we make schemes available to people from all over the world; it is not about targeting a specific country. We will do so, and we are working on schemes to make attractive offers both to individuals and to groups. This is an important area. There have already been many approaches to universities for people who want to base themselves here, and it is important that we have a system that is sustainable and effective, making sure that researchers can work in what is a world-class system in the UK.

[Viscount Camrose (Con)]

My Lords, whether they are homegrown or imported, it is clear we are increasingly going to need more researchers in this country. Equally increasingly, we are competing internationally for research talent. What, therefore, is the Government’s assessment of our overall net attractiveness to researchers right now? How do the Government propose to monitor this going forward and adapt as needed?

[Lord Vallance of Balham (Lab)]

An estimated 17% of R&D workers in the UK in 2023 were non-UK. In that year, 7% were EU nationals and 10% were non-EU. In the university sector, about 37% at the top research and teaching universities are non-UK nationals. About 25% of the life sciences workforce was born outside the UK. The noble Viscount is quite right that there are many people we need here. We have always needed them, we will need them, and we are monitoring very carefully how these numbers are evolving.

As part of the immigration White Paper, the labour market evidence group is being set up—comprised of the Industrial Strategy Advisory Council, the Department for Work and Pensions, Skills England and the Migration Advisory Committee—to make sure that we have a clear view of future needs.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, will my noble friend the Minister talk to his colleagues in the Home Office to ensure that the graduate route, which was established some years ago and provides universities in the UK with academic talent and scientists from other countries—I think particularly of Queen’s University Belfast, which is assisted by students and scientists from south-east Asia—is not minimised or undermined in any way?

[Lord Vallance of Balham (Lab)]

I thank the noble Baroness for her question. In answer to the first part, I can confirm that the Minister sitting next to me heard that, so the Home Office will be aware. The graduate visa system is an important system. The changes in the immigration White Paper effectively reduce from 24 months to 18 months the amount of time a graduate has after finishing their course to get a job. The reason for that is clear: to try to make sure these people get jobs that are highly skilled and that they can continue in, rather than jobs that are not highly skilled.

This is an important route. It is worth noting that in 2023-24, the number of graduate visas increased by 49%. This has been a rapidly growing area. It is important that we make sure we get this right and that these people enter high-skilled jobs.

Gaza Humanitarian Foundation

Tuesday 13th May 2025 Lords Chamber

Question

15:20

Asked by

[Baroness Altmann]

To ask His Majesty’s Government what assessment they have made of the proposal by the government of the United States for a Gaza Humanitarian Foundation as an independent means to provide humanitarian aid in Gaza.

[Baroness Altmann (Non-Afl)]

In begging leave to ask the Question standing in my name on the Order Paper, I declare my interests as shown in the register.

[The Lord Privy Seal (Baroness Smith of Basildon) (Lab)]

My Lords, it is clear that there is a desperate urgency to get humanitarian aid into Gaza. As the UN has said, it is hard to see how the proposal to distribute aid through private companies would meet the scale of the need, protect civilians, protect aid workers and be consistent with humanitarian principles. The UN and humanitarian NGOs have worked with courage and determination to deliver aid into Gaza since the conflict began. These organisations uphold humanitarian principles and can deliver assistance across Gaza to those who need it most.

[Baroness Altmann (Non-Afl)]

I thank the noble Baroness for her Answer. It is a little disappointing to hear that she does not join me in welcoming this proposal, which should help at least 1.2 million people initially, and then up to 2 million later, to receive humanitarian aid under an independent mechanism. Does she agree that bypassing Hamas to prevent it hijacking the aid is important, especially in the light of UNRWA’s failure to do so and reports such as that from the Washington Institute for Near East Policy, which shows that exploiting hijacked aid has generated at least £500 billion for Hamas’s terrorist operations?

[Baroness Smith of Basildon (Lab)]

My Lords, the blocking of aid into Gaza by Israel has caused enormous suffering. We are aware of the allegations she refers to that Hamas uses humanitarian aid for its own gain, and we have encouraged Israel to share the evidence with the UN and with NGOs. We have not seen any evidence that there is systematic diversion to Hamas and, given the ongoing hostilities, we are unable to verify allegations through direct monitoring. We ensure that all mechanisms are in place for UK-provided aid. The situation is dire; one in five people faces starvation. Aid is available to get into Gaza now if we can unblock those routes. The surest way through is to have a ceasefire, release the hostages and get aid in now. That is essential if we are to protect and save lives.

[Lord Browne of Ladyton (Lab)]

My Lords, is my noble friend the Leader of the House in a position to remove the veil from the recently formed Gaza Humanitarian Foundation? It is less than two and a half months since this company was put together. Can she tell us which private contractors are being set up to take the place of the United Nations and its partners? Are they capable of providing not just the scale but the diversity of aid that the UN and its partners would be able to provide to the Gazans if the Israelis lifted their blockade?

[Baroness Smith of Basildon (Lab)]

I am not able to satisfy my noble friend on those points; I do not have that information. We have urged the Israeli Government to share that information, because it would be very difficult to make an assessment. We stand ready to work alongside Israel, the UN and our partners to ensure that aid is delivered, but we have to ensure both that they have the expertise to get the aid in and the safety of the aid workers. Over 400 aid workers have died providing humanitarian aid. It is the most dangerous part of the world to supply aid to and in which to be a humanitarian worker. We should express our gratitude and the debt we all owe to those who put their lives at risk to help others.

[Lord Purvis of Tweed (LD)]

My Lords, is it not plumbing the depths of immorality for the women and girls of Gaza, who have had such brutality inflicted on them, now to submit to the indignity of having to queue up to profiteering mercenaries hired by a shadowy organisation established in Switzerland, which will operate under no humanitarian standards or international mandate and with no accountability mechanisms whatever, to receive sanitation, food, water and medicine? What are the Government doing to stop this terrible idea?

[Baroness Smith of Basildon (Lab)]

At the moment, it is an idea. We have seen no evidence that it will go forward. However, the noble Lord is right that humanitarian principles of delivering aid must be consistent across every area in which that aid is being delivered. Today, we are convening the UN Security Council in New York—it is probably meeting now—to look at what can be done to deal with the appalling humanitarian situation in Gaza.

[Baroness Deech (CB)]

My Lords, the simple, straightforward solution is for the hostages to be released. We can see with our own eyes that the hostages are among the least well-fed people in Gaza. Why are the Government always so quick to believe Hamas and United Nations organisations? Why do they not share the widespread scepticism about Hamas, which is stockpiling the aid and preventing lorries going in? Why do they not note how UNRWA has been infiltrated by Hamas?

[Baroness Smith of Basildon (Lab)]

I hope that the noble Baroness heard one of my first comments, which was about the priority of getting the hostages out and released. Recently, Eli Sharabi was released; he was a shadow of his former self. There is a lot of suffering—by the hostages who have been kidnapped, the families of those who were killed on 7 October and the people of Gaza. The crucial thing is to get the aid in and the hostages out. Only if there is a ceasefire can we then talk about the future and see what else can be done for a long-standing peace.

[Baroness Morris of Bolton (Con)]

My Lords, I declare my interests as set out in the register. Last week, the Palestinian Authority declared a famine in Gaza. It was caused not by a flood, by a drought or by any natural causes; it is entirely manmade. I welcome what the Lord Privy Seal said about the conference being held next week. Can the UK Government ensure that we point out that aid workers are already on the ground in Gaza who have been working for years, ceaselessly, to help the Palestinians, and that they should very much be part of the solution?

[Baroness Smith of Basildon (Lab)]

The noble Baroness is absolutely right. Delivering aid and humanitarian aid is not something that you can do on a whim. These people are experienced, have knowledge and expertise and know the areas on the ground. I was not referring to the June conference but the one taking place today in New York, but the noble Baroness is right: there is aid there now. There is aid at the borders that could be delivered. One in five of the population now faces starvation. It is critical to get that aid in as soon and as quickly as possible. The quickest way to do so would be to stop blocking the aid so that it can be delivered to those who are in desperate, dire need of it.

[Baroness Blackstone (Lab)]

My Lords, will the Leader of the House accept that the sidelining of trusted aid agencies and the militarisation of aid under this scheme will lead to large parts of Gaza, where the most vulnerable and least mobile people live, being without supplies?

[Baroness Smith of Basildon (Lab)]

My noble friend says that there is another scheme in place; I am not sure that there is. There are discussions about it, but I have seen no details. There cannot be any aid mechanism that does not have delivering humanitarian aid as its sole priority. It cannot deliver political or military objectives; it is there to help vulnerable civilians. That will be the priority. If there is not action almost immediately, more people will die. Women and children in Gaza face loss of life now. The figure that one in five people in Gaza faces starvation is horrendous. Yes, the hostages must be released, we must get aid into Gaza and that ceasefire must take place. Only then can we look at a longer timespan for peace in the region.

[Lord Callanan (Con)]

My Lords, one of the first things this Government did on coming into office was resume funding for UNRWA, which was suspended by the previous Government. This followed proven allegations that UNRWA employees were members of Hamas and participated in the 7 October massacre. Nobody disagrees with the idea that aid should get through to those who need it, but there are also proven allegations that Hamas has been stealing, diverting and hijacking that aid. Can the Minister assure the House that no British taxpayer’s aid has been diverted to Hamas?

[Baroness Smith of Basildon (Lab)]

My Lords, yes, we resumed funding to UNRWA for the very purpose of having people with knowledge and expertise on the ground to get aid in as quickly as possible to save lives. I said at the very beginning that, for all UK-funded aid, we look at every possible mechanism to ensure that it gets to where it is needed, which is to the most vulnerable. We will always do that, and we will do everything we can to ensure that.

Border Security, Asylum and Immigration Bill

1st reading
Tuesday 13th May 2025 Lords Chamber

First Reading

15:30

The Bill was brought from the Commons, read a first time and ordered to be printed.

Norwich Livestock Market Bill [HL]

Tuesday 13th May 2025 Lords Chamber

Third Reading

15:32

Bill passed and sent to the Commons.

Infrastructure Planning (Onshore Wind and Solar Generation) Order 2025

Tuesday 13th May 2025 Lords Chamber

Motion to Approve

15:33

Moved by

[Lord Hunt of Kings Heath]

That the draft Order laid before the House on 10 March be approved.

Relevant document: 20th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 6 May.

Motion agreed.

Protection of Prison Staff

Tuesday 13th May 2025 Lords Chamber

Commons Urgent Question

The following Answer to an Urgent Question was given in the House of Commons on Monday 12 May.

“I thank the right honourable Gentleman for his Question. I am shocked and saddened to hear about the serious assault against a prison officer that took place on Thursday 8 May at HMP Belmarsh. My thoughts are with the family and colleagues of the brave, hard-working prison officer at this time. We will not tolerate any violence against prison officers. Prisoners who are violent towards staff will face the full consequences of their actions.

The incident at HMP Belmarsh is subject to a police investigation. As such, we are unable to comment further in any level of detail at this stage. The Prison Service has also commissioned an investigation, and its terms of reference are being finalised. It will include details of what happened and why, as well as recommendations to prevent recurrences. We will provide updates to Parliament in due course. Separately, on 22 April we announced to Parliament an independent review of the recent terrible incident where staff were assaulted by Hashem Abedi at HMP Frankland; we will make further announcements in the coming days.

Our prison officers are some of the hardest working and bravest public servants this country has. We are committed to ensuring that they are safe at work and are able to keep the public safe. We announced at the last Justice Oral Questions that the Prison Service has commissioned a rapid review of access to and use of self-cook areas across the prison estate, including their use in special units. The review will report back with recommendations in June. We recently announced a review of conducted energy devices—also known as Tasers—and there is a trial involving a small number of national operational response and resilience unit staff.

Body-worn video cameras, batons, PAVA spray and rigid bar handcuffs are currently available for use by staff, and protective body armour is already worn by specialist prison staff and officers in cases where there is planned use of force or where safe systems of work for the management of high-risk prisoners dictate. We have also announced a review into whether protective body armour should be made available to front-line staff, and that review will report in June. I repeat: the safety and security of our front-line prison staff is our No. 1 priority”.

15:33

[Lord Sandhurst (Con)]

My Lords, on 3 April, the Times reported that Islamist gangs had created gross dysfunction in HMP Frankland, in which a large number of convicted terrorists are held. Just nine days later, on 12 April, Abedi, the Manchester bomber, detained in the same Frankland prison, threw hot oil over a prison officer. Then, on 8 May, Rudakubana, the Southport killer, detained in HMP Belmarsh, threw boiling water over an officer there. Both those terrible attacks were by radical Islamists, in category A prisons. What steps will be taken to isolate such prisoners from access to such dangerous substances? Will tasers be issued in category A prisons, and when will stab vests be provided?

[Lord German (LD)]

My Lords, with a prison population at 98.9% of capacity last month, a 19% increase in the number of assaults on prison officers in the last year and a shortage of prison officers, that is a bagful of problems for the Minister. Does he have an emergency plan for these problems, and what will he do to ensure that our prison officers are safe and that there is a sufficient number of them?

[The Minister of State, Ministry of Justice (Lord Timpson) (Lab)]

Like all noble Lords, I was shocked to hear about the serious assaults against prison officers at HMP Belmarsh and HMP Frankland. It is a sorry state of affairs. We will not tolerate any violence against prison officers. Prisoners who are violent towards of staff will face the full consequences of their actions. The incident at HMP Belmarsh is subject to a police investigation; as such, we are unable to comment further at any level of detail at this stage. However, in the past few weeks, since the recent serious attack at Frankland, we have announced a number of steps to improve prison officer safety, including trialling tasers, suspending the use of self-cook areas for certain prisoners and reviewing whether protective body armour should be made available to front-line staff.

We also have a zero-tolerance approach towards extremist gang activity in prisons. Staff clamp down swiftly on any threatening behaviour. Our staff turn up to work to help people turn their lives around, not to get assaulted.

[The Lord Bishop of Gloucester]

Prison staff work with a wide range of prisoners, from those who are the most violent to the many who are in prison for repeated low-level offending—many of whom have mental health issues and drug addictions—yet the training for prison staff is woefully short: a matter of weeks. I think that people would be shocked to hear how short that is. What is being done to expand that training and development so that staff not only feel valued but are equipped to deal with such a wide range of situations?

[Lord Timpson (Lab)]

I share the right reverend Prelate’s interest in prison officer training. When I did my review into their training, it was clear that the period in which they have to learn the detailed and complex skills to do the job is too short. I have launched a trial in London called the Enable programme, where we are giving far more time to training. I believe that we should have a 12-month training programme rather than one of a matter of weeks. We should also give officers the time to learn the more subtle skills of being an officer. It is clear to me that one of the best ways to tackle the problems in our prisons and Probation Service is to ask the people who do the job.

[Lord Hastings of Scarisbrick (CB)]

My Lords, given that we all agree in this House that attacks on officers are reprehensible and cannot in any way be accepted, would it not be a regressive step to mass-provide further protective and defensive equipment for officers across the board other than the category A estate? As the Minister knows well, good relationships between prisoners and officers will not be enhanced if it is likely that defensive equipment will be used in situations where it is plainly unnecessary, and conversation can de-escalate tension?

[Lord Timpson (Lab)]

My noble friend is right that the best way to de-escalate a problem in a prison is by jail craft—understanding the complexities and knowing your prisoners. If we look at the tools available to prison officers, we see that the best one is their mouth, but we also need to look at what we can do to protect our staff, because they need protecting in some of our establishments where they are dealing with complex and dangerous prisoners.

[Lord Bellingham (Con)]

My Lords, one of the main causes of violence in prisons is the ready availability of illegal drugs. The Minister’s boss, the Secretary of State, stated the other day that it was her intention to try to rid our prisons of drugs by the end of this Parliament. Is that a realistic pledge?

[Lord Timpson (Lab)]

The noble Lord is right that drugs are a massive problem in our prisons. Some 49% of people arriving in prison tell us they are addicted to drugs, and then we put them in a prison with serious organised criminals who make a lot of money out of selling drugs to them, so clearly we have a problem. However, I am interested not just in tackling drugs getting into prisons—how we tackle drones and illegal contraband coming in—but in how people can leave prison not addicted, so that when they leave prison they do not go back.

[Lord Walney (CB)]

These attacks were made by dangerous individuals who had been imprisoned because of their violent radicalism, but there remains the problem of radicalisation within prisons once prisoners arrive on the estate. What assessment has the Minister made in his early months of the scale of this within the prison system and the current level of resilience in what the state and prison officers can do to protect prisoners from it?

[Lord Timpson (Lab)]

Any gang member is a problem in our prisons. We need to make sure that we identify where they are and do all that we can to limit their activities. We know that the best way of dealing with these complex people is by trusting the staff and their expertise at dealing with them, and we need to we give them every tool at their disposal to make sure that these people are not dangerous to themselves, to other prisoners and, most importantly, to staff.

Employment Rights Bill

Committee stage
Tuesday 13th May 2025 Lords Chamber

Committee (3rd Day)

Relevant documents: 7th Report from the Constitution Committee, 20th Report from the Delegated Powers Committee. Northern Ireland legislative consent granted, Welsh and Scottish legislative consent sought.

15:41

Clause 11: Statutory sick pay in Great Britain: lower earnings limit etc

Amendment 71A

Moved by

[Lord Sharpe of Epsom]

71A: Clause 11, page 37, leave out lines 21 to 24 and insert—
“(1) Statutory sick pay is payable by an employer to an employee—(a) at a rate of 60% of the employee’s normal weekly earnings for the first three qualifying days of any period of incapacity for work,(b) at a rate of 80% of the employee’s normal weekly earnings for subsequent qualifying days,subject to a maximum of £116.75 per week.(2) Subsection (1) applies regardless of whether the employee earns above or below any lower earnings limits that were previously set.”Member’s explanatory statement
This amendment adjusts the rates of Statutory Sick Pay (SSP), providing 60% of normal weekly earnings for the first three qualifying days and 80% for subsequent qualifying days.

[Lord Sharpe of Epsom (Con)]

My Lords, I shall speak also to Amendments 71B and 75 standing in my name.

According to the latest figures from the Office for National Statistics this morning, the number of payrolled employees fell by 33,000 in April, or 106,000 on the year, and the number of job vacancies also fell. Wage growth has slowed. This evidence suggests that the OBR was right and the provisions in the Bill are already creating a net negative impact. The Chartered Institute of Personnel and Development’s latest survey was widely cited at the weekend. It confirms that employers’ confidence is at the lowest level since the pandemic and that a quarter of employers are planning to make redundancies in the next quarter. The CIPD’s economist, Mr James Cockett, was quoted as saying:

“The Employment Rights Bill is landing in a fundamentally different landscape to the one expected when it formed part of the Labour manifesto in summer of last year”.


This picture was confirmed in KPMG’s and the Recruitment and Employment Confederation’s reports. Recruitment activity across the UK continued to weaken at the start of the second quarter. The chief executive of the REC, Neil Carberry, has said that

“it is time for real changes to address employers’ fears and boost hiring. A sensible timetable and practical changes that reduce the red tape for firms in complying with the Bill will go a long way to calming nerves about taking a chance on someone”.

Last week the noble Lord, Lord Fox, called for the Bill to go on vacation because we need to get it right. This raft of new statistics proves his prescience, and perhaps the vacation ought to be permanent. Instead, we are now being asked to consider further obligations on employers through changes to statutory sick pay. A number of businesses across sectors have made it very clear that, while they support the principle of statutory sick pay, they are concerned about the rate and structure being proposed. Many have called for the rate of statutory sick pay to be set at 60% rather than 80%, as a more sustainable and proportional figure. The Government claim to have consulted widely with businesses, trade unions and various stakeholder groups to try to strike a fair balance, but, based on the data and the concerns raised, we believe that the right answer, particularly for the initial days of absence, is 60%.

Let us look at some of the other evidence. In the British Chambers of Commerce 2024 workforce survey, a full 50% of respondents stated that they would be negatively impacted by the proposal for statutory sick pay entitlement from day one. That is a clear warning sign that the proposed structure may have unintended consequences. Further, in a survey by the London Chamber of Commerce, 38% of firms predicted that they would need to freeze hiring as a direct result of the statutory sick pay changes; 30% expected a reduction in profits; and 33% anticipated lower wage increases for their existing staff.

15:45

These are not abstract figures: they point to real-world economic decisions that are being made in response to uncertainty and increased cost pressures. The Government have rightly emphasised their goal of encouraging people back into the workforce, particularly after the long-term disruption caused by the pandemic. We obviously support this aim but, to do so effectively, we must create the right environment: one that supports employees when they are genuinely unwell while also giving employers the confidence and flexibility to hire.

Amendment 71A, which I am supporting today, seeks to do exactly that. This amendment proposes that statutory sick pay should be paid at 60% for the first three qualifying days, then raised to 80% thereafter. This would reflect the reality that short-term absence imposes different challenges on businesses from long-term illness. It would also ensure that those who are seriously unwell or suffering from longer-term conditions still receive the full financial support that they need and deserve.

This approach reflects the principle that incentives should be tailored and not uniform: not one-size-fits-all. We need a more flexible, graduated approach to sick pay that reflects the real operational pressures that businesses face while maintaining adequate protections for workers. We believe that this amendment strikes that balance.

It is also worth noting that, during early discussions around the Bill, the Government themselves indicated that a range between 60% and 80% was under consideration. This amendment is therefore not a radical departure from the Government’s own thinking, but rather a reasonable refinement.

I also draw the Committee’s attention to the concerns raised by UK Hospitality, which has said that more than 95% of its members have expressed concerns about the Government’s plans to remove the existing requirements to serve waiting days before receiving SSP—statutory sick pay. Let us take, for example, the pub sector, which directly employs over 600,000 people across full-time and part-time roles. The latest statutory sick pay proposals are projected to add upwards of £10 million in additional costs to this sector alone, a sector that we all understand is struggling.

Currently, some sickness days go unpaid due to employees falling below the lower earnings limit or not qualifying under the existing waiting period rules. However, stricter reporting requirements and the shift to guaranteed hours are likely to increase these costs even further. I remind the Committee that the Government’s own impact assessment states:

“Overall, we assume the direct increase in costs to businesses is a direct transfer to employees in the form of sick pay, and therefore is neutral on a net present value basis but will improve equality. The wider impacts are deemed uncertain given the difficulty in predicting behavioural impacts around presenteeism, absence and transmission of disease”.

We should remember that this impact assessment was conducted in—to use the phrase I quoted earlier—“a fundamentally different landscape”.

We appreciate that the Government may not see Amendment 71B, with a flat 60% rate, as workable. That is precisely why we are offering Amendment 71A as a constructive alternative—a balanced, evidence-led compromise. It recognises that long-term sickness requires stronger protection while still addressing employers’ concerns about short-term absences. It provides incentives for people to return to work, encourages the genuine use of sick leave, and gives employers confidence to invest in their workforce without fear of unpredictable costs.

I turn to Amendment 75. As I have mentioned, the Government’s own impact assessment has stated that small businesses will face a disproportionate cost as a result of measures in this Bill. The £5 billion figure cited in that assessment is, in our view, likely to be an understatement. It relates almost entirely to increased administrative burdens while failing to calculate the significant knock-on effects on business costs and hiring behaviour, in particular the impact of making it more expensive to employ people.

Indeed, the impact assessment goes so far as to admit that the net effect on society is

“Uncertain due to uncertainty on behavioural impacts”.

What a damning phrase. That level of ambiguity is deeply troubling, especially when the stakes are so high for the smallest enterprises in our economy.

We make no apology for repeating that there is much too much uncertainty in this Bill—uncertainty that weighs most heavily on small and medium-sized enterprises. This concern extends directly to the proposals regarding statutory sick pay. Let me be clear that we do not oppose statutory sick pay; on the contrary, we fully recognise its importance. It is critical that workers have financial support during periods of sickness, and that is a matter of basic decency and fairness. However, the reason for Amendment 75 is grounded in pragmatism, not ideology. Small businesses cannot plan, budget or comply if they are not given a clear understanding of the potential costs. Without that clarity, we are asking them to commit to obligations that they may be structurally unequipped to handle.

We must not lose sight of the fact that small businesses form the backbone of our economy. They are not large corporations with legal teams and flexible cashflow. They operate on tight margins; they need certainty, predictability and time to prepare. I beg to move.

[Baroness Lister of Burtersett (Lab)]

My Lords, I am grateful to my noble friend Lady O’Grady and the noble Baroness, Lady Smith of Llanfaes, for their support for Amendment 72, and to the Safe Sick Pay campaign and the Health Foundation for their help. The amendment is a probing one, aimed at facilitating a debate about the future of statutory sick pay—from a rather different perspective than that of the noble Lord, Lord Sharpe of Epsom—to which the Bill makes very welcome improvements.

Nevertheless, the scheme will still fail to provide adequate protection in sickness, especially for workers on lower incomes and who belong to marginalised groups. The amendment would require the Secretary of State to review the rate of SSP prior to this year’s Budget and to ensure that no one is worse off as a result of the otherwise positive changes made in the Bill.

Starting with the latter, I very much appreciate the time that my noble friend the Minister gave me and my noble friend Lady O’Grady to discuss the unintended consequences of the Bill’s welcome removal of the lower earnings limit and its replacement by the rule that employees will receive 80% of their average weekly earnings or the flat rate SSP, whichever is lower. The problem is that this new rule means that a small number of low-paid employees will be worse off than now.

Because of the also welcome removal of the waiting period, the loss will be limited to those who have been off work sick for more than three weeks. According to the DWP, we are talking about 13% of all sickness absences. I accept that this is a small proportion, but, by definition, we are talking about people with more serious illnesses. In its fact sheet, the DWP itself gives the example of a cleaner, working 11 hours across 5 days at the national living wage, who takes three months off for cancer treatment and who would lose £65 in total in SSP. The DWP assumes that the cleaner could potentially make up some of that in universal credit, but what if the cleaner were married to someone whose wages are not low enough to qualify for UC? She will lose some of her independent income. While £65 may not sound like that much to those on decent incomes, it could make a real difference to someone on a low income, particularly where a worker’s earnings are not shared fairly within the family. It is women in particular who are likely to lose out as a result of this unintended consequence.

I understand why the Government have rejected the alternative that has been put forward hitherto, but I would ask them to look again at the proposal made by a number of trade unions and charities that the formula use a 95 % rather than 80% replacement rate, which seems to be the most straightforward way of dealing with this. I believe that it is incumbent on the Government to come up with a solution to ensure that no one is made worse off due to the unintended consequence of the otherwise positive change made by the Bill. After all, Labour’s plan to make work pay promised that:

“We will ensure the new system provides fair earnings replacement for people earning below the current rate of statutory sick pay”.

On the rate of SSP, the final report of the Health Foundation’s Commission for Healthier Lives noted that the expansion of SSP under the Bill

“does not address a fundamental issue: statutory sick pay remains too low to provide meaningful financial security during illness”.

Last year, the Work and Pensions Committee similarly concluded that SSP

“does not currently provide adequate protection for those who most need protecting from financial hardship during periods of sickness absence. It consequently fails to perform its primary function of providing a basic level of income protection”.

At £118.75, it represents an earnings replacement rate of only 19% for an employee on average earnings, or 28% for an employee on a full-time minimum wage salary, one of the lowest rates in the OECD. The interim report of the Mayfield Keep Britain Working Review pointed out that our European counterparts typically pay around 70% to 80% of an employee’s wage when they are sick. The low rate of SSP in the UK all too often spells real hardship and financial insecurity, especially for lower-paid workers, including women, disabled workers and members of racially minoritised communities.

Analysis by Citizens Advice shows that four out of five households in the bottom three deciles would not be able to afford essentials such as bills and food after four weeks on SSP. The Work and Pensions Committee noted that there was

“almost complete agreement among witnesses that it was too low and not enough to live on”.

This included 90% of members surveyed by the Chartered Institute of Payroll Professionals.

Cancer charities have pointed to how far cancer patients fall below the minimum standard needed to live a dignified life at a socially acceptable standard as measured by my colleagues at Loughborough University. In a briefing, the charities quote a patient with leukaemia who says:

“What people don’t realise is that your costs also go up when you get cancer”.


Going on to SSP meant a “ huge drop” in his income that he was not able to replace with benefits. The result was, he wrote:

“I was an emotional wreck and it was a very, very bad time”.


Mind found that two in three people with a mental health problem surveyed who received SSP faced financial difficulties and that over one-quarter specifically mentioned that relying on SSP had affected their ability to pay bills and buy food, which hardly helps their recovery. Indeed, three-fifths of respondents believed that the reduction in their income as a result of receipt of SSP had had a negative impact on their mental health. This is illustrated by a research respondent quoted by the Health Foundation:

“If sick pay had been enough, I think I would’ve been able to return to work, but instead my condition worsened drastically ... and I ended up in the worst state, mental health-wise, that I have ever been in, forcing me to claim PIP … and be unemployed for the past year and a half”.


The hardship associated with receipt of SSP, particularly for those on lower incomes, can result in presenteeism—people coming into work when sick and, where it is contagious, potentially spreading sickness. This is bad for them, bad for their fellow workers and bad for employers. According to government analysis, presenteeism costs businesses 44 days of lost productivity per year. Poor sick pay undermines the Government’s overriding objective of economic growth. Analysis by WPI Economics suggests that improved SSP could boost the economy by over £4 billion a year and would reduce the pressure on the NHS.

The Health Foundation warns that inadequate SSP can create an incentive for some workers to move quickly into the social security system without a clear route back into work, the very opposite of what government policies are trying to achieve. It points out:

“When workers are financially supported during sickness absence, they are more able to recover, take part in rehabilitation and return to work safely and sustainably”.


The implications of presenteeism became horribly visible during the pandemic, which, as my noble friend the Minister told the Committee only last week,

“exposed just how precarious work and life are for those on low incomes, with many forced to choose between their health and financial hardship”.—[Official Report, 8/5/25; col. 1789.]

Far too many people felt that they simply could not afford to stay at home when they were infectious. Countries with more generous sick pay saw higher isolation compliance and better health outcomes. We are told by the experts that it is only a matter of time until the next pandemic. One way we can prepare is by ensuring that SSP is adequate now.

This amendment merely asks the Government to look again at how to ensure that no one loses out as a result of the Bill’s welcome improvements to SSP, and to undertake a quick review of its level. I am sure this would be welcomed by a wide range of charities, the TUC and major trade unions, as well as the more than 185 parliamentarians who support the Safe Sick Pay campaign.

A New Deal for Working People stated unequivocally:

“Labour will raise Statutory Sick Pay”.


The amendment builds on the much weaker assurance in the Commons from the Minister for Social Security and Disability that the Government would monitor how effectively the Bill’s SSP reforms will support employees. We do not need monitoring to tell us that SSP is simply too low, especially in view of the recent Work and Pensions Committee inquiry. The Commission for Healthier Working Lives calls for a review that will result in an increase in SSP

“to a fairer level while giving businesses the time and support they need to adapt”.

I hope my noble friend the Minister will at least be able to provide some assurances on both issues.

16:00

[Baroness Coffey (Con)]

My Lords, I rise to speak to Amendment 73 in my name regarding SMEs and an SSP rebate scheme. I have made a drafting error by calling it four days when it should have been three days, in compliance with the law today.

Occupational health is a key factor in both helping people to stay in work, to try to prevent some of the illnesses, and to get back into work quickly, and for some time it has been a key part of the strategy of a successful business to do that. But I am also very conscious that SMEs in particular are not always well displaced currently to access, which is why expanding that capability has been a key part of DWP’s more recent strategies, which the present Administration have continued.

Sickness rates are significantly lower in the private sector than in the public sector, but what is common to both is that there is an increasing prevalence of the primary reason for sickness pay: people being off sick due to mental well-being. I am conscious that this is often not an easy situation to challenge or interact with if you do not have the experience to do so, and that is why increasing occupational health is needed.

Why is occupational health so relevant to this? It used to be the case that with statutory sick pay you could reclaim from the Government the amount of money that you had paid out. You might have paid out a lot more—100% of earnings or similar—but all businesses used to be able to get a rebate for the statutory sick pay element. I know that because I used to fill out the claims myself when I was working in industry. Over time that was whittled down, and it was finally abolished in 2014. Instead, the Government at the time created the Health and Work Service, which was designed to be referred to by SMEs for people who have been ill for a few weeks—again, almost as a provision facilitated by government.

One of the challenges is that this is continuing to be part of an issue. Many businesses, particularly small businesses—certainly in submissions made to me—are particularly worried about this starting from day one of people being unwell. As a consequence, it is important that we should investigate the opportunity to get a rebate scheme for SMEs to try to keep the status quo as it is today.

It is in the interests of government to support SMEs. As we have already heard, the statistics show that, unfortunately, payroll employment is falling. When in office I was very pleased that we saw it increasing. Indeed, I am certain, in wanting the Government to succeed in their ambition to get to 80% employment rate, that they need SMEs to be taking on people to work. As I have explained, I do not think the Bill will help with that, but one modest way to go towards alleviating some of the issues would be to introduce a straightforward rebate scheme for SMEs.

[Lord Davies of Brixton (Lab)]

I speak in support of my noble friend Lady Lister of Burtersett, and in support of more being done on statutory sick pay. I welcome the Government’s commitment to strengthen statutory sick pay by removing the lower earnings limit and the waiting period, but they must go further to ensure that people with mental health problems have a secure safety net when they need time off work, and a pathway back into work when they recover.

The UK has one of the least generous sick pay schemes in the OECD in terms of rates and length. It forces people to remain in work while they are unwell, which risks them becoming more unwell and eventually falling out of work. Because statutory sick pay is inadequate, people who rely on it often carry on going into work when they are unwell. This can risk them becoming more unwell, to the point where they fall out of employment altogether. We need a sick pay system that provides real security, is more compassionate, gives people the time they need to get better and supports them to return to work when they are ready.

Reforming statutory sick pay is beneficial to the economy, to businesses and to people with mental health problems. As my noble friend has emphasised, presenteeism—going to work when unwell—is costing UK employers £24 billion a year, according to figures produced by Deloitte. It reduces productivity and business competitiveness, as well as aggravating a person’s illness. Introducing a flexible statutory sick pay model that allows for partial payments alongside wages would help people to gradually return to work after a period of sickness, or allow them to reduce their hours when needed without being signed off completely. Not only is this beneficial for the employer, as employees are able to return to work sooner part-time, but it keeps the employee connected to their workplace and reduces the likelihood that they will fall out of employment altogether.

Extending the length of statutory sick pay being paid from 28 weeks to 52 weeks will enable more people to stay in employment, reduce rehiring costs for businesses and prevent people falling out of employment and needing support from the benefits system. Ultimately, we need to see a higher level of statutory sick pay, and I see no reason why, when you are sick, you should get any less than the national minimum wage.

[Baroness Noakes (Con)]

My Lords, my main concern with the changes to statutory sick pay in this Bill is the impact on smaller businesses, which is why I support the amendments in this group in the names of my noble friend Lady Coffey and the noble Lord, Lord Fox, which provide for rebates for SMEs. Of the two amendments, I prefer that of my noble friend Lady Coffey because it clearly undoes the harms that Clause 10 will cause.

I could not find much data on how much businesses actually pay in statutory sick pay, but I suspect that, unless an employer is unlucky enough to get an employee who has long-duration sickness, most will be paying relatively little at present, because absences are mainly for less than four days. What the data does show is that most sickness absences are for minor illnesses, which are unlikely to exceed three days. The average days lost per worker per year in 2023, which is the most recent data I could find, is just short of eight days. Among smaller and micro-businesses, that falls to around five days.

Extending the days for which payment is made is likely to increase the number of days lost to sickness, as the current incentive to work if the illness is mild will simply disappear. The Government say they have no idea what the behavioural impact of the changes will be—whether positive or negative—but I am prepared to bet that there will be far more short-duration absences, which will qualify for statutory sick pay, than there were before.

If I am right that most SMEs do not currently pay much in the way of statutory sick pay, the changes in the Bill will straightforwardly increase their costs. An average small business of between 10 and 49 employees has about 20 employees, which means that the average for a small business will be to pay for at least 100 days of sickness that they do not currently have, which would amount to around £2,000 in additional costs each year, even if no additional sick days were taken, which I doubt. That is not a huge amount per business, but it adds up to many billions of pounds across the whole economy. It also, of course, comes on top of the jobs tax and the very significant increases in the national minimum wage, which leads me to the likely real consequences of this change on top of the others. Put simply, SMEs will not hire workers unless they absolutely have to. We can already see evidence of that from the surveys of smaller businesses and in the weakening labour market—my noble friend Lord Sharpe of Epsom gave us an up-to-date view on that. It is only going to get worse.

Furthermore, all those groups that we as a nation want to get back into work, in particular those who are long-term sick, will simply not be attractive to employers. Any hint of an illness record in a job applicant’s background will count against them, because no employer would want to take on the additional costs that would automatically come with that employee.

I am sure that I do not need to remind the Committee that SMEs employ nearly half the private sector work- force. A reluctance to hire among SMEs will kill growth and opportunities for many of the groups that we need to be employed in this country. There is a simple way to solve this problem, set out in Amendments 73 and 74. The Government would be wise to go down that route.

[Baroness Lawlor (Con)]

My Lords, I shall speak in support of Amendments 71A and 71B in the name of my noble friend Lord Sharpe of Epsom, Amendment 73 in the name of my noble friend Lady Coffey, and Amendment 74 in the name of the noble Lord, Lord Fox, for a rebate scheme.

Amendments 71A and 71B propose a sensible modification to Clause 11 and strike a more affordable approach for a business paying the employee for time not worked, as well as for the compliance and record-keeping involved. I say “more affordable” rather than “fair” because many businesses—particularly small and micro-businesses, as we continue to hear in Committee —will struggle to stay afloat and in business, given the juggernaut of additional costs, burdens and increased obligations imposed by this Bill. That includes those in this clause and those in previous clauses that we have discussed.

In Clause 11, such costs are to be imposed for those below the lower earnings limit, as we have heard, which will add to the extra costs paid by employers. They will potentially open further problems raised in the impact assessment, the modelling for which suggests a rosier picture for business than the available evidence warrants but also raises questions of behavioural response. Indeed, that consideration was a fundamental principle addressed in the welfare state proposals by Sir William Beveridge in his blueprint Social Insurance and Allied Services in 1942. The original National Insurance Act was framed as a contributory scheme with strict conditions on benefit to avoid creating perverse incentives.

The impact assessment for this measure—which models outcomes on the basis of a variety of factors, including some unproven assumptions—contends that there is evidence suggesting that overall sickness absence may be reduced but, on the basis of evidence considered from other countries, says that it is

“possible that regulation changes induce a behavioural response”

and that

“studies from other countries have found that the incidences of sickness absences are higher when sick pay is more generous. There could be an increased number of sickness absence days taken due to improved financial protection”.

We can read that in whatever way we like, and we have heard different interpretations of more generous statutory sick pay, but it is incumbent on the Government to return to some of the original principles in the national insurance system in this country and to think further about not creating perverse incentives. There will now be days for which the employer will pay for which there is absolutely no productivity gain.

16:15

There is one other reason why I support these amendments. Clause 11 implies that those below the lower earnings level can do as well as those on higher earnings without improvements in their skills and productivity levels, the Government’s modelling being based on being “productive” at the present rather low skill levels. That premise, and that overall reflected by this Bill, is misguided, in that additional costs to be borne by employers alone are to be paid for without productivity gains and with no regard for the wider context of the overall economy or its buoyancy. Rather, the Bill, including Clause 11, locks the UK labour market into being the economy with the lowest productivity among similar G7 economies, with the lowest productive output per hour.

The UK not only has a disproportionately higher tail of low-skilled labour and people earning low wages but, in topping up benefits, including statutory sick pay, to levels for higher earners, offers no incentive whatever for these people to improve their skills. Such an approach in the UK labour market demeans lower earners by failing to encourage incentives for them to aspire higher and improve their skills and education. This will ultimately lead to them not being employable.

I will not go through the GDP rates per hour, but they make depressing reading, with the US earning the highest GDP per hour in purchasing power, and France and Germany earning more than the UK. UK productivity was around 19% lower than that of the US. We improve productivity by having an incentive-based pay scheme, and that must be based on higher skills and higher aspiration.

I support my noble friend’s amendments for those reasons, because they would mitigate slightly the burden on business and could mitigate potential behavioural changes. I would go further than my noble friend’s amendments in arguing that a lower proportionate differential for the lower earnings limit should be built into the measure as an incentive to low-skilled employees to improve their earning capacity by training and education.

I support Amendment 73, tabled by my noble friend Lady Coffey, and Amendment 74 for a rebate scheme, tabled by the noble Lord, Lord Fox, because cover for lost income due to sickness goes back, historically, to 1911 and was, as I mentioned, enshrined in the blueprint by Beveridge, with elements of contributory social insurance then in existence extended right across into a single system of contributory insurance under the National Insurance Act 1946. Statutory sick pay was based on a three-way contributory benefit paid by the employer, the employee and the taxpayer for the best part of 100 years, to help working people with income to cover sickness. Throughout that period, the employee contribution arrangements were designed as part of a three-way scheme to promote incentives, maintain a link between contribution and benefit, and keep costs and claims under control.

As the employee contributory element was eroded in the 1980s and 1990s, during the twists and turns of attempts to control escalating public expenditure, limits were introduced—we have heard about them from my noble friend Lady Coffey. They were whittled down between 1983 and 1991—I will spare noble Lords the figures—and, from 1994, we arrived at the 80% reimbursement rate of SSP being abolished for all employers but continued with a recovery, a rebate, at 100%, commencing after four weeks instead of six. In April 1995, that was abolished, but a percentage threshold scheme was put in its place. All the time, it was recognised that employers were compensated for high levels of sickness absence: they could recover part of their statutory sick pay costs where they exceeded a specified percentage of their total gross class 1 NIC liability in a tax month, the amount reimbursed being the excess in statutory sick pay paid above the percentage threshold.

For these reasons, I support the amendments. In view of the fact that employers’ contributions not only continue but have, in a retrograde manner, been increased considerably under the NIC Act, which went through this House earlier this year, and increased disproportionately, with the damage already seen to the labour market, which we continue to hear about in the Committee, and with businesses being more reluctant to employ the very people we need to employ, I suggest it is fair and proportionate that there should be a rebate, as proposed in the modest amendment from my noble friend and the more ambitious one from the noble Lord, Lord Fox.

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

My Lords, I support the noble Baroness, Lady Lister, and Amendment 72, and I add my thanks to the Safe Sick Pay campaign, the Health Foundation and other organisations. I heartily welcome the Labour Government’s commitment to strengthening SSP by removing the lower earnings limit and the waiting period.

A nationally representative survey conducted for the TUC found that around half of employees get their full pay as usual when sick, but that around 28% were forced to rely on SSP alone. It also found a clear class divide when it comes to who gets what: eight in 10 of higher earners—over 50 grand a year—got full pay when off ill, compared with only one-third of lower earners.

The Covid pandemic exposed just how precarious life is for those in insecure, low-paid work, and we do not know how many preventable illnesses were caused by people struggling into work and spreading the virus because they could not afford to stay home. But we do know, as we have heard, that forcing people back to work when they are ill is bad for workers and bad for business, puts pressure on the NHS and is costly for the economy.

I am very grateful to the Minister for taking time to meet me and the noble Baroness, Lady Lister, to discuss our concern that the formula adopted by the Government could leave low-paid workers who earn just above the lower earnings limit worse off. The DWP’s answer has been that abolition of the waiting days before a worker receives SSP ensures that, for the first three weeks, those losses will be offset. But, surely, the policy intention of the Government’s commitment to abolish the waiting days is not to make up for losses caused by its own formula. The policy intention should be to ensure that every worker who relies on SSP is, in fact, better off, and we need to protect those on longer- term sickness who are, for example, receiving cancer treatment.

I note the Government’s concern that the formula must be designed in a way that avoids workers getting more in sick pay than they would in wages, and avoids a cliff edge. I remain unconvinced, however, that it is beyond the wit of the DWP to come up with an approach that protects that position without penalising a group of low-paid workers.

Secondly, as we have heard, this amendment seeks a review of the rate of statutory sick pay. As the Resolution Foundation has pointed out, unlike many other European countries, the rate is not linked to earnings. Currently at £118.75, SSP equates to 27% of the national minimum wage. In 1999, SSP was equivalent to 43% of the national minimum wage. That is a big drop. For a decade and more, SSP has failed to keep up with the cost of living or increases in the living wage.

The Work and Pensions Select Committee has confirmed that the SSP rate is not enough to live on. At the Covid public inquiry hearing in December 2023, Matt Hancock was quizzed by Sam Jacobs, who is counsel for the TUC. The former Health Secretary agreed that the rate of SSP should be higher. How could he argue otherwise, when the UK languished at the bottom of the OECD league for statutory sick pay under the previous Government and when we know that such a low rate of SSP is a danger to public health?

I understand that perfection must not be the enemy of the good, but an SSP rate that works out at around £3 per hour is some way short of either perfection or good. This amendment implicitly recognises that this woeful legacy of neglect in tackling it will not be remedied overnight. It would, however, be welcome if the Minister could reassure us today that both the formula and the rate of statutory sick pay will be reviewed before the Autumn Budget, and rightly so.

[Baroness Cash (Con)]

My Lords, I start by declaring interests. I am an employer, the founder of a listed business, MindGym, which is a behavioural science business, and an expert in corporate training to improve employee well-being and productivity. I am also a commissioner at the EHRC.

I support the Opposition’s amendments in this group: Amendments 71A, 71B, 73, 74A, 74B, and 74C. At the outset, I would like to note for the record that everyone here is driven by compassion for those who need protection. I pay tribute to the speeches by noble Lords from the Benches opposite, but I am very concerned about these proposals by the Government.

I am grateful to the noble Baroness, Lady O’Grady, for drawing our attention to the Resolution Foundation report, which has identified some of the points that support the amendments from this side of the Committee. I will return to those.

The Government have said on record that they want growth. We support that goal. They want businesses to succeed. We support that goal. They have also said on the record that they want to reduce the number of people who are out of the workforce on long-term sickness—currently running at 2.8 million. We support that goal. What we do not understand is how on earth the Government believe that this legislation and these proposals are going to achieve any of that. They are based in compassion, I have no doubt, but the Government are pursuing a culture of incapacity and dependency that will impede the stated aims.

16:30

I am going to explain why. We are referring to SSP and not to long-term sickness, but they are related to each other in our culture—our sick note culture in Britain today. Mental health now accounts for 50% of all new sickness claims, so let us bear in mind that when we are talking about SSP, we are talking about 50% of those claims being for mental health issues. What qualifies? A diagnosis of stress, low mood or burnout—all these are now signed off on GP sick notes. They are transient. There is confusion between transient life difficulty and clinical disorder.

Simon Wessely, a former president of the Royal College of Psychiatrists, has put it like this: we are pathologising normal human experience. Grief, worry and frustration are now all treated as medical conditions. The new statutory sick pay proposals run against all the scientific evidence—in which I declare I have been immersed for the last 10 years—and the sociological data from other countries that show that what is intended by the Bill will not be achieved by the way it is framed. I appeal to noble Lords on all Benches; if it is helpful, I will share the research and happily meet and talk with any Member of the Government Benches.

A number of neuroscientists and psychologists over the last 20 years, mostly the last five, have identified what is happening and why we have this massive increase in people being sick long term. Professor Lisa Feldman Barrett, a leading neuroscientist, has shown that our brains do not just feel emotions; they construct them from context. She tells the most extraordinary story of a young teenage girl who lives in a tribe abroad. She is in a culture—I am not for a second advocating this, but it is such a striking story about how the brain works—where the men treat the women very badly, and the girls and women all think they are pests. That is how they deal with it. They go about their lives. The girl is getting good grades at school, she is sleeping all night and is doing fantastically well to succeed. She then watches a Netflix documentary which tells her about domestic abuse, a concept which, in this tribe, had never come to fruition. It may well have done so, but in the context of the documentary, domestic abuse was shown to cause certain things. Guess what? Her exam grades dropped; she stopped sleeping and she became very ill. Her brain suddenly predicted from a different context that she should be feeling differently to how she was feeling before. That is what happens when we set the cultural context.

I am excited if I am going on a date—well, I am not, because my husband would have words—but I am anxious if I am taking an exam. The same physiological measures show up on the data, but we are predicting the emotion differently. This is what is happening in our workplaces and our lives up and down the country. We are destroying the future of this country and levelling it with debt for the young because we are not addressing this. We are worser now by these proposals facilitating it.

I can go on with the research. Daniel Kahneman has shown that behaviour is shaped by framing. If disengagement is framed as safe, sanctioned or subsidised, it becomes the default under pressure. I go back to the Resolution Foundation’s report, as referenced by the noble Baroness, Lady O’Grady. What she did not mention is that when there is more generous statutory sick pay, there is more absence. In other countries, where they have day one rights, they have a reduced percentage rate of payment to ensure they balance that tension with people going off sick unnecessarily for reasons they do not need to use. Martin Seligman also talks about learned helplessness and warns that, when people face stress without agency or structure, they stop trying even when recovery is possible. Albert Bandura showed that belief in our ability to function is critical to doing so. I could go on and on. The evidence is clear that, if we demand nothing, we will get nothing.

To be clear, we are talking about and contextualising mental health. I know that it is not what the Government Benches want to hear, but I urge them to listen. I urge them to think about what they are trying to achieve with this legislation, and what the outcomes are likely to be.

We do not have to immerse ourselves only in the academic research, because there is sociological data—proof of what I am saying—from other countries. Sweden did what this Government are proposing to do. They made generous sick pay provisions and reforms, and it led to rocketing absence levels until they had to go back and reform again, introducing tightened eligibility, re-imposing assessment and setting fixed sick leave durations. That brought absence levels down by 40% and there was no increase in hospitalisation.

In Denmark, where encouragement to return to work is built into sick leave, requiring people to stay connected to their employers and take part in phased returns, outcomes are far better than in the UK and dependency is, again, lower. In the Netherlands, employers get support for sick leave only where they have required people to keep engaged and have proof that that is part of the whole system.

These new additional entitlements are not being kind to people. They are not being kind to a generation of young people who are watching economic inactivity in their homes. Of course, there will be people who need to be specifically categorised with physical ailments and, of course, there are people who are really very sick, but, with a 50% mental health sickness rate, I urge the Government to reflect again on these clauses.

[Baroness Smith of Llanfaes (PC)]

My Lords, I support Amendment 72 from the noble Baroness, Lady Lister, which I and the noble Baroness, Lady O’Grady, have signed. This amendment would require a review of the rate of statutory sick pay ahead of His Majesty’s Government’s 2025 Autumn Budget. It requires the Secretary of State to determine, following that review, whether the rate should be changed and to publish a Written Statement setting out the reasons for that determination.

It is important to remind ourselves what this amendment entails. As noble Lords are aware, statutory sick pay is a government scheme requiring employers to provide most employees in the UK who are absent from work due to sickness with a minimum level of pay during that period of absence. Statutory sick pay —SSP—is £118.75 per week, following an increase last month, which an eligible employee can receive for the days that they are ill and not working, except for the first three days of that sick leave. To be eligible, one must be classed as an employee and have done some work for the employer, earn at least an average of £125—previously £123—per week, and have been ill for more than three days in a row. It is only on that fourth day that they receive SSP.

The scheme as it stands is ineffective and causes hardship. As we have heard from the noble Baroness, Lady O’Grady, according to the TUC, 28% of employees receive only basic SSP when ill, meaning that they are reliant on this very small weekly amount during that period of illness. The TUC adds that

“there are 1.1 million workers earning below £123 per week who are not eligible for SSP”,

with most of those workers being women.

Considering also the penalty of a three-day delay until an eligible employee can claim SSP, it is clear that reforming SSP is both necessary and overdue. I therefore welcome the provisions under the Employment Rights Bill that will see SSP payable from the first day of incapacity to work by way of Clauses 10 and 12, and the removal of the lower earnings limit—that is, the requirement to earn at least £125 per week—through Clauses 11 and 13. However, Clauses 11 and 13 also set in legislation that the rate of SSP will be set at the lower of £118.75 or 80% of the employee’s normal weekly earnings. That payment is extremely low by international standards, as we have heard from many noble Lords. It is one of the lowest rates in the OECD.

If you were to divide this amount by a typical 40 hours worked by full-time employees in a week, this would provide under £3 per hour to employees who are ill. Of course, many workers work more than 40 hours per week, decreasing this hourly amount even further. But in the context of rising housing costs, food prices, energy bills and household bills, such a small payment is inadequate to meet basic living standards. I ask your Lordships: do we believe that those people can survive on £3 an hour? That is an important question that we must consider when we look at this amendment.

In fact, in the context of universal credit, the Joseph Rowntree Foundation estimates that to afford the basic household essentials, a single adult requires at least £120 a week and a couple £205 a week. It is clear that a review of the adequacy of the SSP rate is crucial to ensure people are not plunged into poverty just for becoming ill, which is something that happens to all of us. Proposed new subsection (7), in Amendment 72, makes provision for the Secretary of State to ensure that no employee receives less statutory sick pay than they would have received before the Bill’s enactment, as a result of changes under Clause 11. This is important because according to the TUC, an 80% replacement rate as under the Bill will see 300,000 workers entitled to a lower rate of SSP than currently. Many of these individuals work for multiple employers, work part-time and receive low wages. According to the Safe Sick Pay campaign, three-quarters of those impacted will be women. Disabled people will be disproportionately affected, almost half of whom are aged between 20 and 54.

Using the SSP amounts in place before April, the Safe Sick Pay campaign outlined the example of an employee who will now lose out. That employee, working for multiple employers, earning £123 a week, would have received £116.75 a week of statutory sick pay because they earned above the lower earnings limit. Following the Bill as it stands, that same employee will see a 16% reduction in their entitlement and receive only £98 a week, as this would represent 80% of their earnings. Many workers, particularly those in low-pay positions, already struggle to afford the shortfall caused by SSP when ill. Increasing that shortfall will make it more unlikely that workers will have adequate savings to mitigate the loss of income. Proposed new subsection (7), in Amendment 72, provides a way for the Secretary of State to rectify this situation and ensure that no one is worse off as a result of SSP changes made by the Bill. It is vital that His Majesty’s Government do not intentionally or unintentionally cut sick pay for hundreds of thousands of workers.

I will now briefly turn to some of the other amendments and the debate on this group so far. Amendment 73 in the name of noble Baroness, Lady Coffey, and Amendment 74 in the name of the noble Lord, Lord Fox, call for the establishment of a scheme for reimbursement of statutory sick pay costs incurred by companies with fewer than 250 employees. This is an interesting proposal, as we have heard from the noble Baroness, although we have yet to hear from the noble Lord, Lord Fox. I look forward to hearing the Minister’s response on the practicalities of such a proposal.

I feel very strongly that mental health is health, and that this is not just to do with those facing mental health conditions; it goes wider than that. It is important to note that this is about all workers who have been signed off from work; there are lots of different reasons why they might be ill, including those relating to mental health.

The aims of these amendments differ from those of Amendment 72, which seeks to address gaps in the Bill concerning adequate sick pay for workers—gaps that cause some concern, especially the consequential effects on low-paid workers. I hope that, in responding, the Minister addresses my concerns: the adequacy of the SSP rate as set out in the Bill; the effect on low-income workers, without relying on the welfare system to offset that effect; and whether His Majesty’s Government will commit to a review of SSP rates, so that workers are not punished by measures in a Bill which is expected to strengthen their workplace rights.

16:45

[Baroness Fox of Buckley (Non-Afl)]

My Lords, there have been some excellent debates in this group. I ask for some clarification, particularly from the Government, on something I am confused about. I am sympathetic to Amendment 74A. The noble Baroness, Lady Cash, made a very useful and insightful contribution that brought another layer to the discussion. There is a danger of us talking about these things technically, yet in a rather old-fashioned way, when there is a lot more evidence and new phenomena to consider.

Amendment 74A looks at the impact on—

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)]

I am sorry to interrupt the noble Baroness, but we are not debating Amendment 74A. It is grouped elsewhere.

[Baroness Fox of Buckley (Non-Afl)]

I have the right group; I have just said the wrong thing.

[A noble Lord]

It is in the next group.

[Baroness Fox of Buckley (Non-Afl)]

All right; thank you.

[Lord Fox (LD)]

My Lords, I thank all noble Lords who have spoken in what has been a very interesting debate. I will try to reflect on what I have heard as I speak; that will make my job quite difficult and probably make my speech completely incoherent, but I will do my best.

We closed last week with a couple of de-grouped Conservative amendments. I promised to reserve what I would say on statutory sick pay for this group, which means that I am unlikely to speak on the next group. Last week the noble Lords, Lord Sharpe and Lord Hunt, spoke firmly against the Government’s proposed changes. I have seen evidence of businesses arguing strongly either for the status quo or for a two-day threshold.

I am not a behavioural scientist, but I can read a room politically. The party that is sitting on a huge majority in the Commons has made it very clear where it stands on this issue, and that has been reasserted by some of the even stronger comments we have heard from the Benches opposite. Businesses have drawn the same conclusion. Many of those I talk to are seeking ways to ameliorate this, rather than eliminate it, which is probably unlikely.

I was interested to hear the noble Lords from the Conservative Front Bench speak to Amendments 71A and 71B. Their version of amelioration appears to be to reduce the amount of SSP, or at least severely limit it. We heard a different story from the noble Baronesses, Lady Lister and Lady O’Grady, who set out why SSP is important and why the rate is meaningful. To contextualise poverty, we are talking about the poorest people who are working people but still extremely poor. It is difficult to overestimate the generosity of this scheme, but that is what I have heard from several on the Conservative Benches. This is a very modest offer. With her statistics, the noble Baroness, Lady Lister, set it out very clearly, as did the noble Baroness, Lady Smith.

Before I talk to my own Amendment 74 and Amendment 73, I will deal with the others. In Amendment 75, the noble Lords, Lord Sharpe and Lord Hunt, call for a reviewer to report within two years. I mentioned there is a subsequent group which also has impact assessment amendments in it. I am not really sure why we are debating them separately. Rather like the noble Baroness, Lady Fox, I am going to mention 74A to 74C, which have been shunted into a separate group. Taken together, there is a slightly curious mismatch of timings: Amendment 75 is after two years, 74B and 74C after six months and 75A after a year. I agree that there do need to be impact assessments following whatever your Lordships decide, perhaps on a more systematic calendar than the ones suggested.

I am interested in the pre-emptive impact assessment. For the benefit of your Lordships’ Committee, it would be good to hear the Minister spell out the detail of the impact assessment of business on the current proposed measures. If, as the Minister says, the costs will be relatively modest, the costs of Amendment 73 or 74 would also be relatively modest, which takes me to the point in question.

As we have heard very eloquently from the noble Baroness, Lady Coffey, she and I have come up with very similar suggestions in terms of amelioration, which is what I was talking about earlier. Rather like the noble Baroness, Lady Noakes, I slightly prefer the version from noble Baroness, Lady Coffey, but that is not the point—this is not a competition. We would like to sit down with the Government and thrash through a way whereby a rebate scheme can be reintroduced. This seems to be the sensible approach. We care deeply about SMEs—they drive a huge part of our economy. This is a way of making sure that they do not get disadvantaged as employees get what they deserve as SSP. That is what I am asking for from these Benches. Very sensibly, the noble Baronesses, Lady Coffey and Lady Noakes, and others supported it. I hope that the Minister will be able to make a positive noise about that and we can sit down and have that conversation.

Today, we have heard that SSP is absolutely vital for a section of society who are already massively disadvantaged. We should not be drawing lines and pushing them further down. We should be finding ways of making sure that they are not disadvantaged even more and, at the same, we should find ways of making sure that our SME sector is not also disadvantaged.

[Baroness Jones of Whitchurch (Lab)]

My Lords, we have had a really good debate on these issues, and I hope that I can do justice to all the questions and points that have been raised.

I begin with Amendment 75, tabled by the noble Lords, Lord Sharpe and Lord Hunt, on independent reviews into the effects of SSP reforms on small and medium enterprises. As noble Lords will be aware, the Government have already undertaken a regulatory impact assessment, which was published on 21 November 2024 and can be found on GOV.UK. This considered the likely direct business impact of the SSP changes, including on small and medium enterprises. In the regulatory impact assessment, the Government estimated that delivering these measures will cost businesses a modest £15 extra per employee. I assure noble Lords that the Government remain committed to monitoring the impact of these SSP measures. We intend to conduct a post-implementation review of the measures in the Employment Rights Bill within five years of implementation. Additionally, the Department for Work and Pensions conducts regular employer and employee surveys and will continue to do so, providing further monitoring of the impact of the SSP changes on a range of employers and employees.

I draw attention to the Keep Britain Working review. We asked Sir Charlie Mayfield to lead this independent review, which will consider recommendations to support and enable employers to promote healthy and inclusive workplaces, support more people to stay in or return to work from periods of sickness absence and retain more disabled people and people with health conditions.

While I am speaking about the variety of illnesses that people on sick leave incur, let me address the issue of mental health absences, which was raised by the noble Baronesses, Lady Cash and Lady Smith, the noble Lord, Lord Sharpe, and my noble friend Lord Davies. Our proposals have to be seen in the wider context of the Bill. The Bill is intended to improve the experience of employees at work, so measures such as flexible working, guaranteed hours and protection from harassment could—we believe will—reduce stress at work, potentially leading to fewer incidents of burn-out and better employee mental health, and therefore fewer related absences. For us, that is an important challenge that we intend to monitor.

Amendment 73, in the name of the noble Baroness, Lady Coffey, would introduce a rebate scheme to reimburse SMEs for the cost of SSP for the first four days, although I think she clarified that she meant three. I thank her for her interest in SSP, and of course I appreciate her extensive knowledge and experience in this area, as a former Secretary of State for Work and Pensions. As previously mentioned, regarding waiting days, the changes we are making to SSP will cost businesses around an additional £15 per employee, a relatively modest amount in comparison with the benefits of reduced presenteeism and the positive impact that this will have on our lowest paid members of society. As the noble Baroness may recall, we previously delivered SSP rebate schemes such as the percentage threshold scheme. This was abolished due to SMEs underusing it, and feedback that the administrative burden was complex and time consuming. So I suggest that a rebate scheme that covered only the first three days of sickness and absence would also be quite administratively burdensome, both for businesses to claim and for the Government to process.

Previous SSP rebate schemes also did not encourage employers to support their employees. We know that employers having responsibility for paying sick leave helps maintain a strong link between the workplace and the employee, with employers encouraged to support employees to return to work when they are able.

Sticking with the theme of rebate schemes, Amendment 74, from the noble Lord, Lord Fox, would introduce an SME rebate scheme for the whole duration of sickness absence. I reiterate the points I made earlier about the limited cost to business as a result of SSP changes and the experience of previous rebate schemes. I agree with the noble Baroness, Lady Lawlor, that we have moved a long way from the Beveridge system of social insurance. The costs and the mechanisms are very different now.

A rebate for the full cost of SSP could cost the Government up to £900 million a year. I do not believe that a rebate scheme is the best way to support our SMEs at this time. We will be considering the findings of the aforementioned Keep Britain Working review, which is expected to produce a final report with recommendations in the autumn. The noble Lord, Lord Fox, challenged me to keep talking about this, and of course I am very happy to do so.

Amendments 71A and 71B were tabled by the noble Lords, Lord Sharpe and Lord Hunt. As they may be aware, the Government consulted on what the rate of SSP should be for those who currently earn below the lower earnings limit. There was no clear consensus from stakeholders on the percentage. The Government believe that the 80% rate strikes the right balance between providing financial security to the lowest paid employees when they need to take time off work to recover from illness and limiting the cost to business. As the noble Lord, Lord Fox, said, if we are not careful, we will be penalising the very poorest in our society.

Crucially, the total amount saved by business, if the rate were set at 60% compared to 80%, would be around £10 million to £30 million per year. That is about a £1 difference per employee per year, or less than 0.01% of total spending on wages annually by businesses. On the noble Lord’s Amendment 71A, which would set the rate at 60% for the first three days of a period of incapacity for work, the amounts potentially saved by business become even smaller, with the difference in cost being a matter of pennies. Given the minimal savings for businesses, the complexity for employers in administrating different rates is difficult to justify.

17:00

The noble Baroness, Lady Noakes, asked about the data we had on the duration of sickness absence. The DWP employee survey from 2023 showed that 64% of individuals do not take any sickness absence at all, and, of those that do, 87% have absences of three weeks or under. Therefore, for short-term absences, the removal of waiting days is likely to offset the drop in earnings for the 300,000 who could earn less under the new structure.

Amendment 72 has been tabled by my noble friend Lady Lister of Burtersett. As I have just highlighted, the current system is designed to balance support for the individual with the cost to the employer. My noble friends Lady Lister, Lord Davies and Lady O’Grady, and the noble Baroness, Lady Smith, raised a more fundamental challenge about the levels of SSP and indeed made compelling cases. However, as noble Lords will know, the Secretary of State for Work and Pensions already carefully reviews and sets the rates for statutory sick pay each year as part of the social security uprating process, and that rate is agreed by Parliament. The formula and the rate of SSP, if we change it, will be reviewed throughout that process.

I say to my noble friend Lady Lister and others that removing the waiting period means that all employees will receive at least £60 extra at the start of their absence, rising to £150 if they work two days per week, compared to the current system. We also know that increasing the rate of SSP substantially increases costs: for example, a rate of 80% of the national living wage would cost businesses an extra £1.3 billion a year. With the changes that we are already making through the Bill, we believe the current rate is fair and achieves the right balance between providing support for employees and minimising the cost to employers.

I understand that my noble friend has included in her amendment provision for ensuring that no employee will receive less SSP as a result of these changes. That point was raised by my noble friend Lady O’Grady. I assure the Committee that, by removing the waiting period, no employee will be entitled to less SSP for the first three weeks of sickness absence, which, from a survey of UK employees, represents 80% of all sickness absence. In fact, the vast majority will receive more than they do now as a result of these changes. I assure the noble Baroness, Lady Smith, that we are not cutting SSP for hundreds of thousands of workers.

My noble friend Lady O’Grady challenged the DWP to come up with a more comprehensive formula. I assure her that this has been looked at in detail— I know that she knows this, because we discussed it when we met, and the department has produced a fact sheet to support this—that it is more complicated than we would like to think. The truth is that it has to be a scheme that is simple enough to be easily implemented by employers. I hear what she says and I wish it were that simple but, unfortunately, it is not.

Those who need additional financial support while off sick may also be able to claim more help through the welfare system. The DWP recently published a fact sheet that I hope my noble friend has found useful.

I assure my noble friend that of course the Government remain committed to monitoring the impact of the changes we are making to strengthen statutory sick pay, how the SSP is used by employers and how it supports employees, including lower-paid employees. This issue will be kept under review, and in the meantime I hope the amendment can be withdrawn.

[Lord Sharpe of Epsom (Con)]

My Lords, I thank the Minister very much indeed for her response, and, indeed, all noble Lords for their contributions to what has been a thoughtful and valuable debate. My particular thanks go to my noble friends Lady Noakes, Lady Coffey and Lady Lawlor, as well as to my noble friend Lady Cash, for bringing to the debate her unique expertise in the area of behavioural science.

It is it is crucial that the Government fully recognise that many provisions in this Bill are interlinked, as we have heard from all sides of the Committee. Changes in one area can have unintended ripple effects in others. As I have said, we support statutory sick pay, but we must also acknowledge that these proposed changes will result in higher costs for employers. My amendments were an attempt—in the words of the noble Lord, Lord Fox—to ameliorate some of those costs and find some sensible compromises. I am disappointed that the Government have chosen to reject them. Without clarity, businesses cannot plan, cannot invest and cannot hire with confidence. As I pointed out in my opening remarks, the facts are plain: jobs are being lost now.

Regarding an SME rebate scheme—as highlighted by my noble friend Lady Coffey in her Amendment 73 and spoken to by my noble friends Lady Noakes and Lady Lawlor, as well as by the noble Lord, Lord Fox, in his Amendment 74—the Government have stated that final decisions will follow consultation with business through secondary legislation. The impact assessment notes plans for “extensive engagement” with small and medium-sized businesses to

“test where mitigations can be made”.

However, SMEs have spoken: they have asked for a rebate scheme as used during the pandemic. It is therefore disappointing the Government have not accepted the amendments to provide that support.

I would suggest that the Minister takes up the offer of the noble Lord, Lord Fox, to talk more on this subject —a conversation that we would like to be party to. I am pretty sure that we will be returning to it on Report. If I may paraphrase the noble Baroness, Lady O’Grady, it should not be beyond the wit of man to design a simple scheme that works. For now, however, I beg leave to withdraw my amendment.

Amendment 71A withdrawn.

Amendments 71B and 72 not moved.

Clause 11 agreed.

Amendments 73 and 74 not moved.

Amendment 74A

Moved by

[Lord Hunt of Wirral]

74A: After Clause 11, insert the following new Clause—
“Impact assessment: Statutory Sick Pay provision on absenteeismWithin 12 months of the day on which this Act is passed, the Secretary of State must publish an assessment of the impact of the provisions in this Act relating to Statutory Sick Pay on levels of absenteeism.”Member's explanatory statement
This new clause requires the Secretary of State to publish an assessment of how the Statutory Sick Pay provisions in the Act impact absenteeism, within 12 months of the Act being passed.

[Lord Hunt of Wirral (Con)]

My Lords, after what has been a fascinating, wide-ranging and important debate on statutory sick pay, I would like to focus on the impact that these changes are going to have in particular on absenteeism, on short-notice shifts and on enhanced sick pay schemes. So I shall speak to Amendments 74A, 74B and 74C. We will continue to make the point that this Bill brings with it a raft of unintended consequences.

The importance of Amendment 74A cannot be overstated. Absenteeism is a critical issue for many businesses, especially those in hospitality, retail and other service-based industries, where staff shortages can lead to disruption, cancellations and even closures. With the removal of waiting days for SSP and the expansion of eligibility, it is essential that all of us should understand fully how these changes will affect absenteeism patterns across various sectors.

One of the sectors most concerned with the potential rise in absenteeism that these changes will cause is, of course, hospitality. Many businesses in this sector rely on part-time, hourly or zero-hour contracts, often employing younger workers, students or those with fewer financial responsibilities.

As we know, a significant portion of the workforce in hospitality earns below the lower earnings threshold for statutory sick pay, and may be employed for only limited hours. These workers are typically less dependent on their income, often still living at home or with fewer financial obligations. This brings us to a major concern. If these workers know that they will still receive statutory sick pay regardless of their financial needs, there may be little incentive for them to attend work when they feel under the weather, or even when they would simply prefer a day off. The concern is that the reforms could result in workers taking sick leave when it may not be strictly necessary, as the financial implications of their doing so would be mitigated by the statutory sick pay payment.

For example, if a student worker or part-time employee knows that they will still receive statutory sick pay, even if they do not meet the earnings threshold, they may not feel the same level of obligation to attend work. This is particularly true in a sector such as hospitality, where work provides either temporary or supplementary income. As such, the absence of financial pressure could lead to increased absenteeism in the short term, which could, in turn, lead to operational challenges for hospitality businesses, especially those that already operate with small teams, a high turnover of staff, or both.

As I mentioned, we believe it is essential that the Government thoroughly evaluate how these statutory sick pay provisions would affect absenteeism, particularly in sectors such as hospitality, where the risks of absenteeism are most pronounced. The impact assessment called for in Amendment 74A would enable us better to understand the extent to which these reforms would result in higher absenteeism rates and whether there are any other unintended and undesirable consequences, such as workforce disengagement, or a lack of motivation to work, in sectors where employees may not be so financially reliant on their income.

It is vital to understand, first, how absenteeism levels might change, especially in sectors with a younger, less financially reliant workforce; secondly, the operational challenges businesses would face due to potential increases in absenteeism; and, thirdly, the wider economic effects of these changes, including potential impacts on service quality, customer satisfaction and employee morale.

I turn to Amendment 74B. The proposal to remove the waiting period for statutory sick pay and the lower earnings limit represents a substantial shift in how sick pay obligations are structured. It carries serious financial implications, particularly for low-margin sectors, such as retail and hospitality, and for small and medium-sized enterprises more broadly. This amendment seeks a modest but necessary safeguard. It asks the Government to publish, within six months, a report on the impact of these statutory sick pay reforms on employers’ ability to offer enhanced sick pay and occupational health and well-being services.

As of 2024, 28% of UK employers offer occupational health services, while 27% provide sick pay that goes beyond statutory minimums. While we certainly want to see those numbers improve, we must surely understand why provision remains relatively low. A survey conducted last year found that 43% of business leaders cite financial constraints as the primary barrier to offering enhanced sick pay. Another 31% highlighted legal complexity; 28% cited administrative burden; and 31% cited staffing challenges as further obstacles. Rather than addressing those challenges, surely the Government have to recognise that the Bill threatens to amplify them.

17:15

The Government’s statutory sick pay proposals risk undermining businesses that are already striving to do more for their staff. For the one-quarter of employers offering enhanced schemes, rising baseline costs may make those schemes unsustainable. For those not currently able to offer more than statutory minimums, the Bill then moves the possibility of enhanced provision even further out of reach. Moreover, many employers have developed flexible, tailored schemes, adapting to the needs of their workforce and industry. These schemes recognise that a one-size-fits-all approach rarely works in practice. If costs increase further without corresponding support, these personalised schemes may be scaled back or scrapped entirely.

Let me make it clear that mandating improvements does not guarantee provision. In competitive markets, businesses will often choose to enhance their benefits to attract and retain talent, but this happens only when they have the financial headroom to do so. When taxes are lower and regulatory burdens are predictable, businesses are incentivised to invest in occupational health and better sick pay, but the current statutory sick pay proposals, on top of national insurance increases and other cost pressures, leave small and medium-sized businesses and micro-businesses stuck at the margins, without the means or the flexibility to compete on workforce support. All this, I must add, is being pushed forward with an absence of clarity.

The Government’s own impact assessment admits that the behavioural impact of these measures remains uncertain, yet the costs are all too real and immediate. That is why this amendment is so important. It does not ask for the policy to be reversed, only that its consequences be measured. It offers a chance to step back, evaluate and understand how the reforms are impacting employer behaviour, benefit provision and, ultimately, workforce health.

Finally, I come to Amendment 74C. The proposed changes to statutory sick pay, particularly the removal of waiting days and the lower earnings limit, are intended to support workers by providing them with quicker access to sick pay. These changes will create significant operational challenges for businesses, especially in the context of short notice shift scheduling. The Government’s approach to short notice payments is that workers should be eligible for payment if they are expected to work a shift, even without formal confirmation. While we understand the need for flexibility in the scheduling of shifts, particularly in sectors such as retail, hospitality and transport, the proposed reforms could exacerbate some already considerable logistical challenges.

As the legislation stands, with more workers potentially qualifying for SSP from day one of illness, businesses will likely face an increase in short-term absences. This will require employers to adjust shifts at the last minute, possibly without the certainty of knowing when SSP applies, which leads to a direct conflict between the two approaches.

First, the flexibility proposed by the Government in short-notice payment provisions could make it more difficult for businesses to manage increased absenteeism due to illness. When workers can call in sick and expect SSP from day one, businesses will inevitably be forced to deal with more absences at short notice. This situation could leave employers uncertain about when to issue SSP payments, thus increasing the administrative burden.

Secondly, with SSP reforms increasing eligibility for sick pay, the potential for last-minute cancellations and redeployments grows. For businesses already facing tight margins, especially in sectors where flexibility is essential, this could create confusion and financial strain, as workers will expect to be paid for shifts for which they had not been formally confirmed but had reasonably been expected to work.

Moreover, the interaction between these changes could create competing obligations. Although the Workers (Predictable Terms and Conditions) Act requires clear scheduling notice, the SSP provisions could create a situation where businesses are caught between the need for flexibility in staffing and predictability in payments. Employers may be forced to choose between ensuring flexibility in staffing and avoiding non-compliance with the new rules on SSP.

In conclusion, although we support the principle of providing better support for sick workers, we must recognise that these changes, especially when coupled with the increase in short-notice absences, will place significant burdens on businesses. If not properly aligned with existing regulations such as those introduced by the Workers (Predictable Terms and Conditions) Act, the proposed SSP reforms could lead to confusion and operational challenges that make it harder for employers effectively to manage both sick pay and shift scheduling.

I therefore urge the Minister to continue to consider the potential conflicts between these provisions and look for ways to align them, in order to avoid creating undue burdens on businesses, particularly small and medium-sized enterprises. I beg to move.

[Baroness Fox of Buckley (Non-Afl)]

My Lords, I should have spoken in the other debate—

[Noble Lords]

Oh!

[Baroness Fox of Buckley (Non-Afl)]

But I will carry on. I also want to refer to the issue of absenteeism, but I feel as though I have wandered into the skivers debate, and I do not necessarily want to be involved in that.

I am not worried that sick pay will create a nation of skivers or everybody phoning up and saying, “I am off sick”. But I am confused—maybe the Minister can help me here—about what seems to be a conflict in government priorities concerning our attitude to work and, in a way, our attitude to sickness. There seems to be some tension between the discussion around reforming the welfare system and PIPs, for example, and the concerns raised in that debate about ever greater numbers claiming disability benefits, especially for mental illness. I thought that the questions asked by Wes Streeting, the Health Secretary—quoting experts and evidence on the problem of overdiagnosis and of encouraging a culture in working-age adults, especially young people, of feeling incapacitated and dependent on the state in a demoralising way, such that they are written off—are in fact a very mature way of looking at that discussion that we should consider.

We also have to acknowledge a phenomenon that we discussed quite a lot during the passage of the Mental Health Bill. Being unwell, particularly mentally unwell, has now become integral to many people’s identities. The figures given in the earlier debate—when I meant to speak, and when the noble Baroness, Lady Cash, and others made the point about huge numbers of people now being off work as a result of disability due to mental ill-health—indicate that there is an increase not in mental ill-health but in a new cultural phenomenon of people feeling unable to cope in some capacity.

I raise this issue in relation to the Bill because, although the Government are having a mature and interesting discussion on welfare in the other place, I cannot see that it does not conflict with the statutory sick pay provisions and debate we have had on this Bill. On Amendment 74A, which calls for an impact assessment regarding absenteeism, I am concerned in a different way about absenteeism. If Liz Kendall and Wes Streeting are incentivising or encouraging people who have been on long-term sick leave to return to the workforce—maybe to all those care home jobs that have just been created—will they willingly do that, or will they take advantage of this new flexible sick pay from day one? Is that likely to happen? I think that the noble Baroness, Lady Noakes, made this point. In what way would they be encouraged to employ somebody who has been on long-term sick leave if they must say, “Come and work for me—by the way, you can have sick pay from day one”, when they have taken all that time trying to persuade them to get back into work? At the very least, it becomes a bigger risk for the employer to take on such people: the very people the Government want to get back into work and who, for their own sake, should be in work, because the alternative is not doing them any good.

We need to be honest in this discussion. Sick pay was hard-fought for for all those years, but we live in a different time, when sickness is viewed differently. It is almost like a badge of honour in some instances, but it has also become a way of coping. To give your Lordships an example, when I was a further education teacher, some 25 years ago, it was the first time I had come across people taking time off for stress-related sickness. It was often when there had been a political dispute or some big row at work, or a disciplinary action had been taken. Instead of it being dealt with politically, people went on stress-related sick leave. Fair enough—that was fine when it was one or two people. But at one point, a third of the staff in a further education department of humanities were off on stress-related sick pay. As you can imagine, it was a dysfunctional department.

So I agree with the Minister when she said earlier that we are hoping that a happier workplace is going to have less stress. I get that point, but I genuinely think that something else is going on. That form of sickness has become a means for people to express their problems in a range of ways, and they lose the habit of work. My concern is that the Bill, particularly in respect of some of the less flexible ways this issue is being dealt with—in this instance, sick pay—will incentivise those regressive ways in which people are retreating from the workplace.

There is a report out today that says that Gen Zers, or whatever the term is, believe that the workplace itself makes them ill and that workaphobia has to be taken into account. I know that these concepts seem a bit flaky, but it is an academic study, so I am citing it. It says that what needs to be considered is that is why young people should be treated with leniency about not going into the workplace, because they find going into the workplace and interacting far too stressful. It is that kind of nonsense, to be frank, that I hope that we will not encourage inadvertently by this Bill.

17:30

[Lord Vaux of Harrowden (CB)]

My Lords, like the noble Lord, Lord Fox, I am a little puzzled by the groupings between this and the previous amendments. I have gone the opposite route and decided to speak to this group rather than the last one, but everything that I say in this group applies equally to Amendment 75, which would have created a review of the impact of the changes on small and medium-sized businesses. This group would require impact assessments to carried out for the various other effects that the Bill would have—so really it is the same subject.

Frankly, a lot of this would not be necessary if the Bill had been properly thought through from the beginning, if there was not so much detail to be filled in later by regulation and, in particular, if a proper impact assessment had been carried out on the various changes proposed. The Bill will, by the Government’s own admission, impose costs on business, disproportionately on smaller businesses, of around £5 billion, and will, again by the Government’s own admission, have potentially negative impacts on employment opportunities for those with poorer employment records. It is deeply unsatisfactory that it should not have been properly impact-assessed.

The Regulatory Policy Committee rated the impact assessment as “not fit for purpose”. It is worth reminding noble Lords what it said:

“Given the number and reach of the measures, it would be proportionate to undertake labour market and broader macroeconomic analysis, to understand the overall impact on employment, wages and output, and particularly, the pass-through of employer costs to employees. The eight individual IAs and the summary IA need to provide further analysis and evidence in relation to the rationale for intervention, identification of options (including impacts on small and microbusinesses) and/or justification for the preferred way forward”.


It is damning that that was not done before the Bill was presented to us.

Now, before the Minister points this out, I concede that the statutory sick pay individual impact assessment is the only one of 23 that is rated as good—in itself a pretty damning statistic. However, the impact assessment for the monitoring and evaluation plan for the statutory sick pay part is rated as weak. The noble Lord, Lord Hunt, has already referred to the potential behavioural aspects that arise, which are not in any way covered in the impact assessment. In fact, there is a complete cop-out; it says, “We can’t do this because of the behavioural impacts”.

Sadly, these proposed amendments and Amendment 75 in the previous group are clearly necessary, as are the others that we will debate later today and throughout the Committee process. The five-year review that the Minister referred to earlier frankly does not cut it, given the significance of the measures in this Bill and how quickly how they will have impact. Five years is way too long to wait to understand whether it is damaging.

I do not wish to test noble Lords’ patience by repeating this speech multiple times during the process of the Committee, so I ask the Minister to take as read my support for proper and timely reviews and assessments of the impacts of this Bill as we go forward.

[Baroness Jones of Whitchurch (Lab)]

My Lords, as noble Lords have identified, we are now continuing the important debate on statutory sick pay and specifically to address the impact of these measures on businesses.

It is important to highlight that the statutory sick pay system, and the changes that we have brought about as part of this Bill, is designed to balance providing support for the individual with minimising the costs to the employer. This group of amendments, Amendments 74A, 74B and 74C, tabled by the noble Lords, Lord Sharpe and Lord Hunt, would require impact assessments on absenteeism, enhanced sick pay schemes, occupational health, and short-notice shift working.

As I mentioned earlier, and as the noble Lord, Lord Fox, has already identified, the Government have already undertaken a regulatory impact assessment which considered the likely direct business impact of SSP changes. This included considering the impact on small and medium enterprises and sectoral impacts.

Overall, in the regulatory impact assessment, the Government estimated that the cost of delivering these measures would be approximately £15 extra per employee, a relatively modest amount when compared to the positive impacts that these changes will have for employees and overall productivity. I thank the noble Lord for the three amendments tabled in this group, all of which would require impact assessments. I look forward to debating those with the other 23 or so requests for impact assessments that the Opposition have already tabled. We have a plethora of requests for impact assessments. I reassure the noble Lord that we are at the same time updating our regulatory impact assessment and operating a post-implementation review of the measures—so the Opposition’s requests are probably not necessary.

On the noble Lord’s Amendment 74A, requiring an assessment of the impact of the changes to SSP in the Bill on absenteeism, we acknowledge that overall sickness absence may increase as a result of this Bill. This is not a loophole, nor are the Government not considering businesses; rather, it is the very objective of these changes to enable the lowest-paid employees to take time off when they are sick. Under the new system, employees will be able to take the time that they need to recover from short-term illness without struggling through work and often risking the spread of infectious diseases such as influenza. Similarly, employees with long-term or fluctuating conditions should feel able to take a day of sickness absence to manage their condition to prevent it worsening. The noble Lord, Lord Hunt, suggested that employees might be encouraged to misuse the system. However, if employers have the right policies and practices in place, the risk of inappropriate absenteeism can and should be mitigated.

Additionally, the noble Lord’s amendment would be quite difficult to deliver in practice. There is not a standard measure of absenteeism versus legitimate sickness absence, and in many instances, it would depend on whether you asked the employer or the employee. The Government intend to build on the regulatory impact assessment and, as I have said, we intend to conduct a post-implementation review of the measures in the Employment Rights Bill.

I turn to Amendment 74B, to assess the impact of the reforms in the Bill on employers’ ability to continue offering enhanced sick pay and occupational health services, particularly in low-margin sectors such as retail. I appreciate the noble Lord’s concern about the potential impact on this matter, and the Government certainly agree that it would not be in anyone’s interest for there to be a rollback of occupational sick pay or occupational health provision. However, the Government’s view is that these changes will serve only to strengthen the link between the workplace and the employee. I question why any business would want to use these changes as a reason to reduce the support that they provide their employees to help them stay in, and return to, work.

The noble Baroness, Lady Fox, asked about the Government’s policy on getting people back to work, and she was right to raise the issue. We are talking about a balance here; when people are sick, they should have the right to be off sick. I also accept the point that she made that being at work can in itself be a healing experience, and we should not lose sight of that—that there can be a positive health impact from being at work.

I once again draw noble Lords’ attention to the Keep Britain Working review. As I set out earlier in the debate, Sir Charlie Mayfield will consider recommendations on how the Government can support and enable employers to promote healthy and inclusive workplaces and support more people to stay in or return to work from periods of sickness absence. That review is expected to produce a final report in autumn this year. I believe that much of what the Keep Britain Working review is doing will address the noble Lords’ concerns, and I hope this reassures them that the Government are taking this matter seriously. We look forward to the results of the review.

Finally, I turn to Amendment 74C, which seeks to review the effects of the SSP changes on shift management and short-notice scheduling in the workplace. As discussed in relation to Amendment 74A, the number of sickness absences may go up as a result of these changes. This is because it would enable employees to take time off when they are sick.

I again reassure noble Lords that the Government are committed to understand the impact of these changes on businesses. We intend to conduct a post-implementation review of these measures in the Employment Rights Bill within five years of implementation. Additionally, as I set out in the earlier debate, the Department for Work and Pensions conducts regular employer and employee surveys and will continue to do so, providing further monitoring of the impact of SSP changes on a range of employers and employees.

However, this amendment would require the Government to collect a significant amount of data from businesses on what noble Lords will understand is quite a wide range of issues. We believe that this would be administratively challenging for them to provide, particularly in less than six months. This is the very thing that the noble Lord is seeking to avoid—the extra bureaucracy that he has talked about. For example, asking employers, including SMEs, to accurately record and report to government the frequency of shift cancellations and redeployments because of sickness absence is not practical or reasonable.

We have had a worthwhile, short debate on these issues, but I hope I have persuaded noble Lords that we are on the case and therefore that the amendment can be withdrawn.

[Baroness Noakes (Con)]

My Lords, the Minister said during her remarks that there would be a cost per employee of £15; I think she said that in the earlier group as well. Can she provide any more information on this? It seems counterintuitive. If the average number of sick days per employee is around eight, which is what the most recent survey data showed, that implies that employers are already bearing the cost of something like seven and a half days and are going to pay only for an extra half day. That does not seem to be consistent with the evidence of the nature of absences that also exist, which implies that most are at the shorter end and probably are going to be below the level at which they are currently being reimbursed by statutory sick pay.

It has been troubling me for some time, but I hope that the Minister will be able to provide some further information. I do not expect it from the Dispatch Box, although I would be delighted if it were to come from the Dispatch Box right now, but if she could write to me, I would be most grateful.

[Baroness Jones of Whitchurch (Lab)]

I suppose the simple answer to that is that it is in the regulatory impact assessment, which the noble Lord, Lord Vaux, acknowledged was one of the things that we got a fair rating for. I refer the noble Baroness to that, which I think will give more details.

[Baroness Noakes (Con)]

I have read it. There is no more detail in that impact assessment on the £15. That is why I am asking whether the Minister can provide further detail on how that £15 was arrived at.

[Baroness Jones of Whitchurch (Lab)]

I am happy to write to the noble Baroness.

[Lord Fox (LD)]

It would be very useful if she could share it with the other Front Benches as well.

[Lord Hunt of Wirral (Con)]

I am very grateful to the Minister. We have had a very important debate. I am particularly grateful to the noble Baroness, Lady Fox of Buckley, because we have not really spent enough time worrying about the people who are just unable to cope. Working conditions have changed so much. Stress-related sick leave is a huge issue, as is what the noble Baroness referred to as “losing the habit of work”. These are issues that we have to think about very carefully.

There is an important and complex issue of so-called presenteeism, which deserves greater attention in our discussions about workplace health and productivity. I came across some research—perhaps the noble Baroness had this in mind—carried out by Robertson Cooper: its 2023 data, drawn from over 3,000 UK respondents, revealed that almost two-thirds, 60%, of employees reported working while they were unwell, so-called presenteeism, in the last three months. That is an important issue, which has to be taken into account in any impact assessment.

The distinction is essential because not all forms of working while unwell are inherently harmful. Some, such as pragmatic or therapeutic presence, can be beneficial for both the employer and the employee. The challenge lies in identifying when presenteeism becomes detrimental and ensuring that workplace policy, including statutory sick pay reform, supports businesses in managing that balance effectively.

I am also grateful to the noble Lord, Lord Vaux of Harrowden, for reminding us of the finding of the Regulatory Policy Committee. We just need to be aware of the severe criticism that was meted out about a Bill that is making such profound changes while in the gloom of uncertainty, because no one can be actually sure what effect these changes are going to have.

17:45

It has been a valuable debate. I am grateful to the Minister, but I would just like her to ponder what discussions and conversations the Government have had with businesses who are currently providing enhanced sick pay or occupational health services. How have those businesses described the risks posed by the changes to statutory sick pay under this Bill, particularly in relation to their ability to sustain or expand those schemes?

As we have discussed under earlier amendments, the interaction between SSP changes and short-notice shift management remains a live concern. Many businesses, especially in hospitality, care and retail, operate on high turnover and dynamic scheduling, so it would be helpful at some stage to know what feedback the Government have received from employers in these sectors about the potential conflict between increased SSP eligibility and their ability to manage short-notice absences. We will, I am sure, return to this issue on Report, but, in the meantime, I beg leave to withdraw the amendment.

Amendment 74A withdrawn.

Amendments 74B and 74C not moved.

Clauses 12 and 13 agreed.

Amendment 75 not moved.

Clauses 14 to 17 agreed.

Amendment 76

Moved by

[Baroness Lister of Burtersett]

76: After Clause 17, insert the following new Clause—
“Review of parental leave(1) The Secretary of State must, within six months of the day on which this Act is passed, commence a review of paid parental leave.(2) The review under subsection (1) must explore—(a) the introduction of a statutory period of reserved, non-transferable paid parental leave for—(i) fathers;(ii) mothers’ partners;(iii) “second parent” adopters.(b) the level of statutory pay available to the parents listed in paragraph (a), through paternity leave, other reserved leave for fathers considered by the review or shared parental leave, and whether it is sufficient to encourage high take-up;(c) options for making paid leave available to self-employed fathers, and others ineligible for statutory support because they are not in regular employment, for example through a paternity allowance similar to the maternity allowance, currently available for mothers;(d) the extension of full employment rights, including redundancy protections, to fathers who take paternity leave and any other reserved leave considered by the review;(e) international examples of best practice in parental leave policy design.(3) The Secretary of State must lay the review before Parliament within 18 months of the day on which this Act is passed.”Member’s explanatory statement
This probing amendment specifies a number of issues that the proposed review of parental leave should consider, in particular a reserved, non-transferable period for fathers paid at a rate sufficient to encourage high take up. It also requires such a review to take place.

[Baroness Lister of Burtersett (Lab)]

My Lords, I am grateful to those colleagues who have added their names to Amendment 76 and to the Fatherhood Institute for its help.

I welcome the Bill’s improvements to paternity and parental leave, but they only scratch the surface of a policy that is letting fathers down badly. Moreover, it is disappointing to discover that paternity pay will not be a day one right—an issue addressed by Amendment 139 in the name of the noble Baroness, Lady Penn, which I support. Could my noble friend the Minister explain in her summing up why it will not be?

The amendment calls for a review of parental leave, which was required for drafting purposes, although I know that, in the Commons, the Minister reaffirmed an earlier welcome commitment to a review. The purpose now is to ensure that the review covers a number of key issues relating to fathers’ entitlement to paid leave in their baby’s first year, namely measures designed to improve fathers’ take-up of parental leave, including a “use it or lose it” period and adequate payment, taking account of international examples of best practice; the inclusion of self-employed fathers, who are currently excluded, and others currently ineligible for statutory support; the protection through full employment rights of fathers who take the leave; and the commitment to publish adequate take-up data in future years.

The aim is a simple one, on which I hope we will all agree: to strengthen the rights of fathers/“second parents” to be active parents, which, as I will argue, would thereby also strengthen mothers and prospective mothers’ labour market position. In doing so, it would further the Government’s own aspiration to achieve greater gender equality.

The current situation is pretty woeful as far as fathers are concerned. This has practical and cultural, symbolic effects: it is, in effect, saying that fatherhood is of lesser importance to family life and that, in so far as the labour market accommodates responsibilities for childcare, it need do so only for mothers. If we want to surround boys with positive symbolic messages about masculinity, what better place to start than to give their fathers the time they need to build strong relationships in infancy that last a lifetime, thereby showing that fatherhood is valued?

I do not have the time to give details of what fathers are entitled to compared with mothers, but suffice it to quote the Fatherhood Institute’s evidence to the Women and Equalities Committee’s current inquiry into the issue:

“As well as offering one of the least generous statutory paternity offers in the OECD … the UK is an outlier, especially among higher income countries, in the huge gap (50 weeks) between mothers’ and fathers’ entitlements to leave in the baby’s first year. By 2022 most countries in western Europe had a gap of 12 weeks or less”.


The partial extension of day-one rights does not touch the sides when it comes to the current shoddy treatment of fathers, which has resulted in low paternal take-up of paternity and shared parental leave. Paternity leave is dealt with by the other amendments in this group, so I will focus just on shared parental leave.

Take-up among fathers of the shared parental leave scheme, introduced 10 years ago, is a pitiful 5% of eligible fathers, according to a 2023 government report. The scheme is also skewed against lower-income families, with just 5% of the tiny population of SPL users coming from the bottom 50% of earners. Shared parental leave does not constitute an independent right for fathers: it depends on an entitled mother transferring part of her leave. The Government were warned at the time that this was going to fail in the aim of encouraging fathers to take the leave, and it did. This is in part because of the way the scheme is constructed, in part because the low rate of payment means that many fathers cannot afford to take it, and in part because some, such as self-employed fathers, are excluded altogether.

This matters for fathers, mothers, children and family life, as well as for the Government’s number one priority of economic growth. It matters for fathers because it makes it very difficult for them to play an equal, hands-on role in the upbringing of their infant children, which, increasingly, fathers wish to do. It matters for mothers because, to quote the Women’s Budget Group, of which I am a member:

“Unpaid care is the root cause of women’s economic inequality”.


So long as women carry so much of the responsibility for childcare in the private sphere, they enter the public sphere of the labour market with one hand tied behind their back. Too many women’s careers fall off a cliff when they become mothers. As the Women and Equalities Committee’s call for evidence states:

“Unequal division of childcaring responsibilities is a key driver of … gender inequality and the gender pay gap”.


It matters for children in two-parent families, not just for their relationship with their fathers but also, the evidence suggests, for their educational and cognitive development and overall family relationships. Research indicates that paternal engagement during the first year can foster ongoing engagement until a child is aged at least 11 and that this positive effect builds over time. It matters for families, as it can affect family well-being and stability.

It matters, too, for economic growth. The Joseph Rowntree Foundation and Centre for Progressive Policy calculate that more generous provision for fathers, earmarked for six weeks, could deliver nearly £2.7 billion net to the wider economy as a result of strengthening mothers’ labour market position.

The amendment requires a review to take account of international examples of best practice, because we have so much to learn from the many countries that are way ahead of us on this issue. In particular, the experience of the Nordic countries and some others, which have for some years included a reserved period of parental leave for fathers on a use-it-or-lose-it basis in their schemes, suggests that this model, together with adequate payment—I emphasise that—is the best way of ensuring fathers take up the leave, leading to a more equitable division of childcare responsibility between parents and enabling mothers to participate in the labour market on more equal terms.

Most see this as a better and more effective model than extending paternity leave, because it separates out the caregiving function of parental leave from the health and safety function of maternity/paternity leave and, after the first two weeks, it signals clearly that the father can take it at a later date, ideally on his own, helping more mothers resume their employment earlier. As the Fatherhood Institute notes:

“Reserved parental leave for fathers is seen as key to reducing both the gender wage gap and the gendered gap in men’s and women’s participation in paid employment – both of which act as an impediment to economic growth”.


In a book I wrote many years ago on feminist approaches to citizenship, I identified such schemes as a key social policy lever for promoting greater gender equality and recognising the importance of care to men as well as women and to wider society.

Much as I would like to see this as one result of the review, I should stress that the amendment in no way ties the Government’s hands as to this or any other outcome, apart from the provision of adequate take-up data. It could be seen as the soft-cop amendment to the hard-cop amendments by the noble Baroness, Lady Penn, which would require action now—I do have some sympathy for those, but we are where we are. That said, if the review fails adequately to consider the issues that Amendment 76 raises, then I fear it will be met with widespread derision.

I hope, therefore, that my noble friend will feel able to accept the amendment, in this or some other form, as a signal of intent. If not, at the very least, I would ask her to make clear on the record the Government’s acceptance that the current situation disadvantages farmers unfairly and that it must be a clear and explicit aim of the review to create a system that properly supports fathers and other second parents to play a full role in their children’s lives.

At Second Reading, my noble friend she expressed respect for the points that I and the noble Baroness, Lady Penn, made about parental leave and the desire to go further. However, she said that

“we must strike the right balance, while continuing to ensure that this remains a pro-worker, pro-business Bill”.—[Official Report, 27/3/25; cols. 1925-26.]

But the current situation is totally unbalanced as between the rights of fathers and mothers. Moreover, workers are gendered beings, and thorough reform of parental leave is in no way anti-business. Indeed, it would help ensure business can benefit fully from the contribution of female as well as male workers and would, as I have said, thereby contribute to economic growth.

Thus, on gender justice and pragmatic economic grounds, I hope the Government will accept the amendment and send a strong symbolic message to male workers that their role as fathers is fully recognised and valued. I beg to move.

[Lord Palmer of Childs Hill (LD)]

My Lords, I speak to Amendments 80 and 136 in my name. These purely clarify an entitlement to paternity leave and really follow on from the remarks by the noble Baroness, Lady Lister, on Amendment 76. Amendment 80 would extend statutory paternity leave to six weeks and allow new fathers to take this leave at any point within the first year after their child’s birth, rather than being restricted to the current 56-day window. At present, eligible fathers are entitled to just two weeks of leave, paid at a rate of less than half of full-time earnings at minimum wage. Take-up remains low and affordability is a major factor; 62% of fathers say they would take more leave if statutory paternity pay was higher.

Greater equality in parenting is essential to achieving greater equality in the workplace. At present, the unequal distribution of caring responsibilities is a major driver of the gender pay gap. On average, a woman’s earnings fall by approximately 40% following the birth of her first child and often do not recover. By contrast, men’s earnings remain largely unaffected.

18:00

In 2015, the introduction of shared parental leave, led by the Liberal Democrats in government, was a significant step forward. It gave families the option to share up to 50 weeks of leave and 37 weeks of pay. However, it was only a first step, and further reform is clearly needed. Take-up of both shared parental leave and paternity leave remains far too low. Affordability is a central barrier. A poll conducted recently found that 62% of fathers would take more leave if statutory pay were increased. The current statutory rate—as I said, less than half the full-time earning at minimum wage—is insufficient to allow families a meaningful choice.

This amendment reflects long-standing Liberal Democrat proposals calling for a more general and flexible system. In addition to extending the duration of paternity leave, we support increasing statutory paternity pay to 90% of earnings, capped for higher earners. We also advocate requiring large employers to publish their parental leave and pay policies, ensuring greater transparency and accountability on how parental leave is offered across the workplace. This is a practical and necessary reform that would support early bonding between fathers and their children, reduce the financial penalty of caregiving and promote greater gender equality both at home and in the workplace.

I turn briefly to Amendment 136 in my name. This deals with a gap in legislation and extends statutory adoption pay to the self-employed and contractors, taking into account the fact that many are required to work not in an employer-employee relationship.

I also wish briefly to comment on and show support for Amendment 139 in the name of the noble Baroness, Lady Penn. This would make statutory paternity pay a day-one right for new fathers and partners. At present, eligibility for paternity pay depends on six months of continual service. This leaves far too many fathers, particularly those in insecure part-time or agency work, excluded at the very moment when support is most needed.

This is not just about fairness in the workplace; it is about supporting families in those precious first days, allowing both parents to share the load, bond with their child and begin family life on an equal footing. The current system entrenches outdated assumptions about who provides care. Making paternity pay available from day one would send a powerful signal that we value fathers’ roles in early childhood. Every child, regardless of their parents’ employment history, deserves a supported start. On that basis, I hope the Government will consider this amendment thoroughly, as we continue to debate this Bill.

[Baroness Penn (Con)]

My Lords, I will speak to Amendments 127, 128 and 139 in my name. Before doing so, I would like to add my support to all the amendments in this group, in particular Amendment 76 of the noble Baroness, Lady Lister, to which I have also added my name.

As we have heard already, our current system of parental leave is in desperate need of reform. For some of that reform, I accept a review is necessary. How can we improve shared parental leave? This is something that I was proud to have worked on during the coalition Government, but I and the noble Lord, Lord Palmer, have to accept that this has not delivered the change we want to see. Also, how do we extend parental leave to self-employed people—mums, dads and adoptive parents—at a proper rate of pay?

As the noble Baroness, Lady Lister, knows, I believe she is being too generous to the Government with her timelines. When this Government first took office, the Employment Rights Minister, Justin Madders, committed to the review of parental leave being completed within their first year; now, it is meant to be launched within their first year. On Report in the Commons, the Minister committed only to a launch ahead of Royal Assent of this Bill, which even on the most optimistic timetable will be after 4 July.

As well as giving important clarity to the points that the noble Baroness, Lady Lister, has made—calling for the review to cover key issues, including measures designed to improve fathers’ take-up of parental leave, such as a dedicated period of leave, adequate payment and the inclusion of self-employed fathers—could the Minister give us some reassurance on timelines? Will the review be launched within Labour’s first year in office? How long will the review take? To me, six months seems a reasonable period of time to report back on its outcomes, but I look forward to hearing from the Minister what the Government’s plan is.

While reviews are perhaps necessary in some areas, it is important not to confuse a review with action. The Minister kindly met with me last week to discuss my amendments, and it was clear at that meeting that the review would not be a consultation on specific proposals; those would have to come later. Added to any timelines for action would be a consultation on the outcomes of the review, and then, subject to its findings, further legislation. In reality, we are talking about a timeline extending over several years.

I am afraid that is not good enough on an area where there is clear evidence to support action now, and that is on improving paternity leave. It has been said that we are an outlier on how bad our paternity leave is in the UK and how unequal provision is between mums and dads or second parents. And yet, if you increased paternity leave to six weeks’ pay at 90% of salary, capped at average earnings, as my Amendment 127 does, the evidence for the benefits is overwhelming.

As the noble Baroness, Lady Lister, has said, it would improve things for dads. This week is Mental Health Awareness Week. According to research by the Dad Shift and Movember, nearly half of new dads report experiencing multiple symptoms of depression in the first year after their baby is born; 82% of them agree that better paternity leave is the number one thing that the Government could do to protect new dads’ mental health. We have heard how it will support new mums and kids too. And it will support economic growth—and that is meant to be this Government’s number one priority.

This last point is really important. In our discussions on this Bill, I am acutely aware about the concerns employers have expressed about many aspects of the Government’s plans, but, in the context of our earlier debate on statutory sick pay, it is important to remember that statutory paternity pay is reimbursed for businesses at a rate of 92% for larger businesses and 108.5% for those which qualify for small business relief. Of course, it is not only the pay that affects business but also the prospect of more administration and disruption, which can be a concern. This is why for smaller businesses the government compensation rate is at over 100%.

As we are so far behind many other countries when it comes to paternity leave, we can look at whether those concerns have been borne out in practice when leave is more generous. The short answer is that they have not. A study by the National Bureau of Economic Research in the US on Danish parental leave showed no reduction in firms’ output or decline in the wellbeing of other employees at the firm when parents took time off at the birth of their child.

One of the reasons that better paternity leave has the potential to bring such significant economic gains is that, although you lose the dad's economic output for the time he is off, the loss is limited to that period only, whereas for mothers you see an increase in labour market participation and hours worked on a sustained basis, increasing the level of economic activity overall. Reimbursing paternity pay would come at a cost to the Government, but again increased economic activity as a result of the policy would offset four-fifths of that.

It might also be argued that it is not a priority for employers or employees when there are so many other issues that need our attention. However, only 18% of the public think that two weeks is enough paternity leave and 81% agree with the statement that “I believe that giving fathers a decent amount of paid paternity leave so they can be a bigger part of their children’s lives is good for families and good for the country too”. That includes a majority of support from voters from all political parties across the spectrum, including Reform.

As I mentioned, many employers already offer enhanced pay and leave, because they see the benefits for their employees but also, as companies, for recruitment and retention of staff. According to CIPD data from 2024, around 30% of organisations enhance paternity leave beyond the statutory two-week minimum, and around 37% enhance paternity pay beyond the statutory provision.

If this is the case, why is government action needed? For two reasons, I think. First, we are talking about a culture shift. Our system of paternity leave does not reflect many people’s attitudes and plans for starting a family in today’s society. None the less, moving away from the current system is a big shift for our society, and it is one that will not happen on its own. At the moment, the statutory system tells employers that two weeks is enough, and it tells employees that that is all they can expect.

The second reason, as I have said, is that the Government reimburse employers for the statutory system. If a firm wants to go further than the statutory entitlements, they bear the burden of all the costs. That is particularly difficult for smaller businesses. While there are long-term benefits for employers, we also get benefits as a society for supporting people to start and grow their families, and we should recognise that. The CIPD asked employers about their views on paternity leave in 2022 and 2024, and almost half supported extending the statutory paternity leave and pay system, with only 24% opposing it.

Finally, I turn briefly to my other amendments in this group, which would make smaller, but none the less important, improvements to our system of paternity leave. Amendment 139 takes the new day one right to paternity leave included in this Bill and makes it paid. I have to confess that, from everything the Government had said, I thought it would be paid, as they always talk about extending the right to paternity leave and unpaid parental leave. Well, parental leave is always unpaid, so specifying it for one but not the other feels a little misleading.

It also makes no policy sense. We know the biggest barrier to take up of paternity leave is financial. The current statutory rate may be low, but it is far better than nothing at all, particularly at such a point of financial stress in families’ lives. It makes no sense to me that Ministers and the Government acknowledge that paternity leave should be a day one right but are introducing it in a way that makes it hard, if not impossible, for those who most need it to actually take it up. On the subject of costs to businesses, this would be minimal. As I have said, they are reimbursed for this cost.

Amendment 128 would require businesses with 250 or more employees to publish their leave policies on their websites. That would help people thinking about a job move to have transparency on what their entitlements are, and it would help create a race to the top, where companies would need to keep pace with their competitors to attract the best talent.

Unlike almost every other measure in the Bill, this policy has actually been consulted on. It showed that 98% of respondents supported the proposal, including 96% of businesses and business representative organisations. One of the consultees could be considered to be Sir Keir Starmer. He was asked about this policy by Mumsnet in 2020 and said:

“I completely support this. In fact I’m really surprised it hasn’t already happened … I will wholeheartedly support this”.


Perhaps, in responding to this debate, the Minister can explain to the Prime Minister why this has not happened already and why his Government do not want to take the opportunity of this Bill to correct it.

[Baroness Morrissey (Con)]

My Lords, I am also pleased to support Amendment 76 in the name of the noble Baroness, Lady Lister, and add my voice to others in the Chamber asking the Government to review paid parental leave in this country. I confirm, as someone who is involved with a number of multinational businesses, that Britain certainly has fallen behind the modern practices of other countries.

I appreciate that, as my noble friend Lady Penn has already said, some Members of this Committee might consider this to be a matter best left to businesses rather than government policy or law. Unfortunately, in my experience, many British employers—not the ones cited by my noble friend Lady Penn, but the others—take a rather old-fashioned view of paternity leave, leaving the UK at risk of continuing with this unusually gendered approach to parenting and childcare, which is ultimately detrimental to society, to women, to men and to the economy.

As set out in my registered interests, I chair the Diversity Project, which seeks to future-proof the investment industry’s ability to attract and develop the very best talent. We have been working with almost 120 member firms on enhanced paternity leave and pay. There are a number of early adopters, including Aviva, Mercer, Janus Henderson and Julius Baer, which have all reported positive impacts on culture, retention and staff morale. In a “Dragons’ Den”-style competition —I do not see the noble Lord, Lord Sugar, in the Chamber—at our International Women’s Day event earlier this year, somewhat ironically, enhanced paternity leave was voted overwhelmingly by the audience as the single biggest game changer for women’s progress. I endorse the point made by the noble Baroness, Lady Lister, and others that this would help drive gender equality.

18:15

The Diversity Project has studied international practices, some of which have been mentioned by others. We have looked at the evidence of the impact of enhanced parental leave on jobs, society and businesses. One such study, The Economics of Paid Parental Leave, published in Scientific American, found that among US employers of all sizes, including small and medium-sized businesses, which offered equal paid parental leave to men and women, 90% reported either no discernible impact, or a positive effect on profitability, turnover, productivity and morale.

With Britain now an outlier—40th out of 43 OECD countries on paid parental leave—I look forward to hearing the Minister’s response to Amendment 76. It simply calls for a proper review of the current situation, and for the Government to bring back proposals to Parliament to modernise Britain’s family leave policies, encourage and support the role of fathers in family life, encourage more career progression for women, and create more positive workplace cultures that support Britain’s long-term economic success.

[Baroness Jones of Moulsecoomb (GP)]

My Lords, I will speak to Amendments 127, 128 and 139, which I have signed, but all the amendments in this group have real value.

In my relatively long life, in which I have argued endlessly for human rights, I think there can be only one or two times when I have stood up and argued for men’s rights, because I feel they have plenty of them and they do their own arguing. But, of course, this is a human rights issue. It is not just men’s rights; it is women’s rights as well, because the mothers will benefit if the fathers have parental leave.

Statutory paternity leave does not support families only in their first weeks; it helps rebalance society by moving away from a statutory parental leave system, which sends a strong message that parenting is a woman’s job and that men should keep working and stay out of the home. That idea is not just present in the legislation; it is embedded and deeply rooted in many people’s prejudices. Maternity leave is already a very hard-fought and essential right, but the imbalance between maternity and paternity leave is structurally embedding gender differences that do not benefit society.

This legislation can set young families up for a stronger start by ensuring that new fathers have plenty of paid time off work in those early weeks and months that are so crucial to a child’s development. I hope the Prime Minister was listening to the remarks of the noble Baroness, Lady Penn, and that he will perhaps urge this House to adopt at least some of these amendments.

[Lord Russell of Liverpool (CB)]

My Lords, I have put my name to Amendment 76 in the name of the noble Baroness, Lady Lister, and Amendments 127 and 128 in the name of the noble Baroness, Lady Penn. I rise as one of, I think, only two fathers in this debate so far and, as it happens, a recent grandfather. I thought it would be helpful to have a little bit of balance in a discussion on a group of amendments which is about what appears to be an imbalance in the respective roles of fathers and mothers.

It seems to me that there are three key reasons to act, rather than to think and debate and dance on the head of an ever-smaller pin. The first is the early years argument. I, together with other noble Lords and noble Baronesses, will be arguing the case for early years being included and very deeply thought about in the Children’s Wellbeing and Schools Bill. Indeed, the Secretary of State for Education yesterday said that early years was her number one priority. It is inarguable that changing our approach to paternity pay and giving fathers the opportunity to have a much greater presence in the lives of their children in the early years—and also, very importantly, in support of their partner or spouse, particularly if she is working or is attempting to work—is frankly a no-brainer. In that context, that is a very good first reason.

The second reason is that the economic arguments for this are also very strong. The report by the Joseph Roundtree Foundation, which came out only three weeks ago, and which was mentioned by, I think, the noble Baroness, Lady Lister, is fairly convincing. It says:

“Building on the evidence from other countries on the impact of paternity leave, the”


Centre for Progressive Policy—one would imagine that His Majesty’s Government would be in favour of an institute with a name like that—

“has modelled the economic costs and benefits of more generous paternity leave options. This novel model was built to help policy-makers understand the labour market effects – and associated economic and tax costs – of varying paternity leave terms in the UK”.

Its conclusions were very simple:

“The modelling shows a positive economy-wide effect of £2.68 billion, driven by the gains achieved when more women move into work and work more hours”.


The second bullet point is particularly apposite to the Government’s aims and what they are trying to achieve with the Bill:

“The modelling also shows that the increase in labour market outputs for this policy option is mainly driven by those at the bottom and middle of the labour market”.


That is a policy outcome you would think was very close to the Government’s heart.

Turning to the third and final reason, for 31 years I was a professional headhunter and, as a headhunter, you become relatively expert in what I might call the psychology of attraction and repulsion—what attracts people to particular types of employment or employer, and what detracts from that degree of attraction. There is increasing evidence to show that companies that are thoughtful, progressive and transparent about the offering they are making to both fathers and mothers stand a much better chance in this labour market of attracting people of real talent who have many choices they could follow up on. Also, relating back to comments made by the noble Baroness, Lady Fox, in a previous group, an important issue is that many individuals have a degree of trepidation about working for potential employers because they are uncertain of the working environment and how it might impact on their ability to play a full part in family life.

For those three key reasons, I support not only having a long hard look at paternity leave—as the noble Baroness, Lady Penn, said, frankly, we have been looking at it for longer than is either necessary or good for us—but, for the good of families and children, just getting on with it.

[Baroness Whitaker (Lab)]

My Lords, I add my support to this group, in particular to Amendment 76 in the name of my noble friend Lady Lister. I commend her illuminating and penetrating introduction. Indeed, all the speeches that we have heard set out a very strong case.

When I worked in an organisation, I had women colleagues whose partners could not afford to take even the leave they were entitled to, thus further burdening the tired mother and losing those irreplaceable bonding first days, to the detriment of both child and father, as many noble Lords have said. That bonding and support for the mother is just as important for adoptive fathers and stepfathers. Why should self-employed fathers be unequally treated? They are just as much fathers. I hope that my noble friend the Minister will carry out the review as set out in this amendment.

[Lord Bailey of Paddington (Con)]

My Lords, I support Amendments 127, 128 and 139 from my noble friend Lady Penn. I too am a father, so I have an interest in that regard. These amendments will be very useful to the poorest families in the country because currently, only the very well paid get access to serious paternal leave.

As someone who comes from a community that has suffered horribly from the absence of fathers, I know that an early intervention that ties a father emotionally, financially and in any other way to that family unit is very important. The impact it has on educational outcomes and the finances of the family into the future are hugely important. My community is more than three times more likely to be impacted by poverty and all the downsides that poverty inflicts because of that lack of an initial paternal connection to the family.

This country is also facing a very low birth rate. Many young men in this country will tell you that they cannot afford to have children. Paternity leave will be a big part of addressing that. So, supporting our birth rate in this country—addressing that demographic time bomb—is very important.

The mental health of men in this country has been poor for a very long time. Part of turning that around is improving how fatherhood is perceived, so that young men in particular lean into that role and take pride in being a father. That also has a strong knock-on effect for the women involved: they receive support in the home, and it helps them return to their own careers, as we have heard from so many Members of your Lordships’ House. In the poorest communities in this country, many of the real breadwinners in the household are the women. If they can be supported back to work, that will have a profound impact on the mental well-being of the entire family.

I have been on a personal journey to make this a day one right. Because of the profound effect that the lack of a father in the household has on many aspects of society, this should be a day one right. Basically, some things are just worth paying for, and if this has a cost to the Government, so be it, because the upsides, socially and financially, are massive and beyond measurement.

Lastly, as is well documented and as many noble Lords have already said, the benefits to companies are profound. The challenge will be the smaller companies, where one or two people form a significant proportion of the workforce. That is where this conversation has to be sold, where the rhetoric is important, because if smaller companies adopt this approach, I believe it will happen. Larger companies already know the benefits this has for their workforce.

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

My Lords, I beg to move that the debate on this amendment be adjourned.

[Noble Lords]

Oh!

[Lord Katz (Lab)]

My Lords, it has been agreed by the usual channels that we break at a time convenient for the Minister to make a Statement, thus allowing her to continue her other business outside the House.

Debate on Amendment 76 adjourned.

Motion

Moved by

[Lord Katz]

That the House do now resume.

[Lord Katz (Lab)]

My Lords, I beg to move that the House be resumed.

[Noble Lords]

Oh!

[Lord Katz (Lab)]

My Lords, if I felt we were able to finish the group in the next five minutes, that would be fine. We have had a good debate, but this is an important topic, and it is important that the Committee is able to finish the group by hearing from any other Back-Benchers who might wish to contribute, as well as from the Front-Benchers and the Minister. All of the Committee might not be aware of it, but we have agreed through the usual channels that we will have the dinner break early to accommodate the repeat of the Statement. We are ultimately in the whole Committee’s hands. That is why we are breaking now. I know it is not usual to break midway through a group, but, as I say, it has been agreed through the usual channels that a dinner break at 6.30 pm would take priority. Perhaps we can resolve this.

[Lord Sharpe of Epsom (Con)]

I have had confirmation from my side that the usual channels have agreed.

[Baroness Jones of Moulsecoomb (GP)]

I am grateful to the noble Lord, Lord Katz, for his explanation.

[Noble Lords]

Oh!

[Baroness Jones of Moulsecoomb (GP)]

Stop groaning.

Normally, if today’s list says, “at a convenient time”, that means at the end of a group surely.

[Lord Katz (Lab)]

As I said, I understand that this is unusual, but it is in no way unprecedented. We have broken in the middle of a group before. It is not ideal, but we are where we are. I think it is in the best interests of the Committee, especially as it has been agreed through the usual channels, to hear from both Front Benches and any other Back-Benchers on this group in good time, and to hear, in the meantime, a repeat of the Statement from the Minister, so that everybody gets the best of all worlds. I know this is not usual practice, and we will endeavour not to do it on future Committee days.

Motion agreed.

House resumed. Committee to begin again not before 7.12 pm.

Trade Negotiations

Tuesday 13th May 2025 Lords Chamber

Statement

The following Statement was made in the House of Commons on Tuesday 6 May.

“I wish to make a Statement on the progress that this Government have made towards a UK-India trade deal. I am delighted to inform the House that we have now concluded negotiations on a comprehensive, modern agreement with the fastest-growing economy in the G20.

Honourable Members will no doubt be aware that India is expected to be the third-largest economy in the world by 2028. By the end of this decade, it will be home to an estimated 60 million middle-class consumers, and with trade between the United Kingdom and India already standing at north of £43 billion, we know that this powerhouse economy is and will remain a hugely important market for British businesses. While past Governments have failed to negotiate a deal with India, this Government have today succeeded. We have brokered the most generous trade deal ever agreed by India in its history.

From day one of this deal coming into force, it will make trade between our countries cheaper, easier and quicker. UK exporters will benefit from much lower tariffs across a whole host of sectors, including those that we are prioritising in our industrial strategy. It means simplified customs processes for businesses in advanced manufacturing and aerospace, in the food and beverage sector, and in the creative sector, which will benefit from improved copyright protection.

For our world-leading financial and professional services companies, this deal locks in access to India’s fast-growing market. It will ensure that UK banks and finance companies are placed on an equal footing with Indian suppliers, and it encourages the recognition of professional qualifications, so that UK and Indian firms can access the right talent at the right time, whether they are in Mumbai or Manchester. This deal will unlock new opportunities for businesses in every part of the United Kingdom, including our advanced manufacturing companies in the north-east, our iconic Scottish whisky brands and our car plants in the West Midlands. In all, we will have secured over £400 million in tariff reductions in the first year alone, doubling to around £900 million after just 10 years.

Crucially, the deal we have negotiated will provide bespoke support for small and medium-sized enterprises to enter the Indian market, alongside a firm commitment from India to address the trade barriers that those businesses face. Since taking office, we have committed to hardwiring the views and interests of small businesses into everything we do, and the deal we have negotiated is evidence of that. For the very first time, British businesses will have guaranteed access to India’s vast procurement market, covering goods, services and construction. They will be able to bid for approximately 40,000 tenders worth at least £38 billion a year.

The deal that we have just got over the line is further proof that this Government are using the power of international trade and investment to raise living standards here at home. Indeed, experts predict that it will boost our bilateral trade by some £25.5 billion. It is also projected to increase UK wages by £2.2 billion each year, while adding nearly £5 billion to our GDP over the long run.

We have done all that while defending stoutly the UK’s national interest. We have brokered a deal that protects our NHS and upholds our high food standards. It ensures that our points-based immigration system remains unaffected. The deal demonstrates our commitment to both workers and businesses, staying true to our Labour values while contributing to our primary mission of economic growth.

I recognise that this House will need time to scrutinise the deal before the ratification process. My department will follow the process set out in the Constitutional Reform and Governance Act 2010 in sharing the finalised treaty text with honourable Members. The House will, of course, have the opportunity to scrutinise any legislation associated with its implementation.

This deal sends a powerful message about the UK and India’s shared commitment to free, fair and open trade. The UK-India relationship has deep, enduring roots, exemplified by the living bridge of 1.9 million people of Indian heritage living in the United Kingdom. While I do not personally lament that the right honourable Member for Richmond and Northallerton, Rishi Sunak, is no longer the UK’s Prime Minister, it would be wholly wrong of me not to acknowledge his significant achievement as the first British-Indian Prime Minister, which is a testament not just to his own ability but to the close bonds that unite our two nations.

The Government are proud to back open markets and free trade. We recognise that Britain has always been an open, outward-looking trading nation, and we believe that open markets and free trade are fundamental building blocks with which the UK can secure its opportunities and prosperity at home and abroad. Through our upcoming trade strategy, we will set out our ambitions to engage with more industrial giants, like India, to ramp up trade and investment over the coming months and years.

Today, though, as close trading partners and as friends, I am proud that we have secured this deal with India. It is a deal that affords UK businesses certainty and stability during a time of global uncertainty and instability, and a deal that will give British businesses access to one of our biggest markets abroad, while raising wages and driving growth here at home. That is what this deal delivers, and I commend this Statement to the House”.

18:32

[Lord Sharpe of Epsom (Con)]

My Lords, we on these Benches welcome free trade. It is a cornerstone of a prosperous and competitive economy. It benefits everyone, from workers to businesses and from consumers to industry sectors. Trade allows us to access a broader market, to promote innovation and to create jobs. When done right, it provides opportunities for the UK to grow and to succeed on the global stage. This deal is a reminder of one of the key benefits of Brexit. No longer bound by the limitations of collective EU decision-making, we now have the freedom to forge our own trade agreements, tailored to the strengths of our economy and aligned with our national interest. That sovereignty over trade policy is a fundamental asset and one that, used wisely, can bring real and lasting prosperity. I confess that I am at a loss to understand why the Government have repeatedly said that this is a matter of opinion and not fact.

However, while we acknowledge the importance of trade agreements and the positive elements of this UK-US deal, we must approach it with a critical eye and an understanding of the broader context. Trade deals are not simply about negotiating numbers or quotas; they must also be about fairness, sustainability and long-term growth. In this case, I am concerned that the deal, while a step in the right direction, does not go far enough in delivering the kind of comprehensive, ambitious agreement we need.

The agreement announced with the United States contains some very welcome steps—for example, tariff reductions on cars, access for UK beef producers, and the removal of punitive levies on British steel and aluminium, to name but a few. The Government are right to highlight the thousands of jobs that will benefit from these provisions. However, take, for example, the automotive sector: there are more questions that need answers. Reducing tariffs from 27.5% to 10% is undoubtedly welcome, but this deal covers only a relatively small quota of 100,000 cars, a figure that represents just a fraction of total UK car exports. What happens when that quota is reached? Are we going to see tariffs increase again? Where are the long-term assurances for our manufacturers and workers? A more strategic and forward-thinking approach is needed.

This cannot be the end of the road. If we are to make the most of our new trading freedoms, we must push for a comprehensive free trade agreement, one that goes beyond quotas and partial tariff relief and that delivers true long-term certainty for British businesses, across every sector. The 10% reciprocal tariff on a range of UK exports remains in place, affecting sectors that are critical to our industrial base and our export strength. The Government must be clear. When will negotiations begin to eliminate these tariffs, or have they already started? We urge Ministers to move beyond vague commitments that work will continue and to set out a clear timetable and a strategy for achieving a more ambitious deal.

There is particular disappointment in the pharmaceutical sector, for example, where the UK has not yet secured a carve-out from remaining tariffs. This is an industry where Britain leads the world. We are talking about jobs, innovation and the secure delivery of life-saving medicines. We must see more urgency from the Government on this front. What of the creative industries, specifically film and television? The failure to secure any protection for this sector is alarming. The threat of 100% levies on UK-made films exported to the US remains a serious concern. This is a world-leading industry with the potential to deliver billions to our economy and to showcase British culture on the global stage. It deserves far greater attention from the Government.

We on these Benches are not here to oppose free trade; we champion it. However, we want to see trade deals that are ambitious, balanced and comprehensive, and that reflect the best of Britain and support all our key sectors, from farmers to filmmakers and from scientists to steelworkers.

The Minister was somewhat vague in answer to the question from the noble Lord, Lord Purvis of Tweed, yesterday on parliamentary scrutiny of the deal. In an effort to save her from writing many letters, perhaps she can update us on this now.

This deal is a good start, and that deserves to be recognised, but the Government must now finish the job. We call for greater transparency, clear timelines and firm commitments to extend this agreement into a full and fair free trade deal that truly reflects the potential of post-Brexit Britain.

[Lord Purvis of Tweed (LD)]

My Lords, I look forward to the Minister answering my question from yesterday, as referenced by the noble Lord.

I wish to refer exclusively to the India agreement. We have debated in this House on a number of occasions UK-India trade, and on those occasions I have rehearsed the long-standing position on these Benches that free trade is part of our party’s DNA as a political movement. We believe fundamentally that free trade benefits consumers and businesses alike, and, combined with the means by which it is fair trade and inclusive, that it can be beneficial for wider policy ambitions on climate, sustainability, social justice and the reduction of poverty. These are the parameters by which we will judge any agreement that this Government sign with other Governments, as they were for the previous Administration, and specifically on the agreement with India.

We start from the position that we wish this agreement and the Government well in ensuring that it is the basis upon which India trade can develop. This is a complex time in international trade, as it is buffeted by policies and chaotic uncertainty from the United States. The fact that India has now signed an agreement with the UK, and that on Monday the second round of negotiations on an FTA between India and the European Union began, shows those of us who believe in widening free trade around the world that we need to redouble our efforts to reinforce the global trading environment and the rules upon which it is based.

The India agreement has been launched with a high degree of boosterism, last seen under the Boris Johnson Administration, and of course we would be a world leader in trade if press release assertion was a commodity. The Government say that we have a series of anticipated benefits as a result of this agreement. No doubt the Minister will rehearse some of those in her reply. However, looking carefully at the Government’s technical papers and not the press release, we can see that the cash figures of potential GDP growth, which she may quote in a moment, are purely a mathematical extrapolation of potential global trade in 2040, which the Government have then converted into pounds sterling, taking a starting point of 2023. This does not take into account the Trump Administration’s disruption of global trade. Therefore, all the cash figures that are presented are purely illustrative.

The technical papers also helpfully suggest that the Government made a policy decision to round up to 0.1% for the growth figures. Rounding up to 0.1% highlights that there will probably be modest results. Furthermore, very deep in the Government’s papers is that, to get their very ambitious figures on UK trade growth, the Government have taken the starting point as the baseline of 2019, which does not take into consideration the pandemic, the Ukraine war and the Trump supply chain issues. So they start at a high point in order to get higher. We do not necessarily oppose the agreement in principle, but we look at it from perhaps a more realistic and sober perspective. The issue then becomes how we will support our businesses to take advantage of the new market access arrangements.

According to the United Nations data figures, India has seen its exports rise over the last 10 years by 13.2%. This is an export market which the UK consumer wishes to benefit from. UK exports over the same time have expanded by only 5.1%. This is marginal growth over a decade, so it is right that we want to be part of a growing market. However, the European Union export growth has expanded by over 9.5% over the same period, nearly double the UK rate. We now have barriers erected, additional costs and more bureaucracy with the European Union, and we are trying to reduce them for India. So the fundamental issue is not that we have a tariff agreement but how British businesses will see the Indian market as barrier-free, open and accessible across all states, and reliable under the rule of law, with less corruption, more transparency—so that we trade more—and businesses supported more to access the market, which this agreement theoretically facilitates. What are the practical steps of actively supporting businesses that will take advantage of this agreement?

Because there is little reference so far in what the Government have said, can the Minister confirm that the agreement will include a human rights chapter, with clearly articulated mechanisms to address human rights supply chain concerns that have been raised in this House on a number of occasions, including by myself—for example, on broadcasting and civil liberties. If there is to be market access on digital, media and broadcasting, are we ensuring that it is reciprocated and that the restrictions that have been put in place for media have been lifted? Can the Minister confirm that there will be a climate chapter in the agreement that demonstrates that this agreement reduces emissions rather than contributes? On Monday, India and the EU announced their intent for an agreement by the end of the fourth quarter this year. Whether this happens is out of the Government’s hands—I completely understand that—but any comparative advantage that we are likely to have as a result of this agreement is likely to be impacted if there is an agreement between India and the European Union. On rules of origin and other areas of standards, how will we triangulate between India and EU trade?

Finally, I will ask the Minister about potential trade diversion and preference erosion as a result of this agreement. The House is well aware that I look for all the juicy details of these agreements in annexes, and typically on every page after page 200. In the previous Government’s scoping document, annex 9 of the technical paper showed that, with all the likely potential trade benefits for the UK of over £5 billion, which is very similar to this Government’s estimate, it is likely that there will be trade preference and trade erosion of over £3.25 billion.

What does that mean? It means that we must discount all of the benefits from the India agreement with the diversion of trade and the preference erosion from other countries—primarily Bangladesh, Pakistan, Kenya, Senegal, Ghana, Indonesia, the Philippines and Jamaica. For Bangladesh alone, the previous Government estimated that the trade erosion would be £1.5 billion less trade with the UK. So I hope the Government will have an impact assessment clearly articulating the likely trade erosion and trade preference. Will there be primary legislation as a result of this, what will be the extent of it and when are we likely to see it?

[The Minister of State, Department for Business and Trade and HM Treasury (Baroness Gustafsson) (Lab)]

My Lords, I thank the noble Lords for their questions and responses to the Minister of Trade’s policy Statement. It is lovely to see the full support for trade that we all share. I am happy to answer the questions, but, before I do, I will take a step back and quickly consider the agreement that we are due to discuss in context.

Fundamentally, as the noble Lord, Lord Purvis, said, the UK is a trading nation. The reality is deeply rooted in our DNA and that remains true to this day. Stronger trade ties with our partners around the world and championing free, fair and open trade delivers back here at home, generating growth, boosting wages and supporting jobs in every corner of the UK. It is this attitude and openness to trade that has helped cement the UK’s global reputation as being open for business and a home to iconic brands that are sought after all over the world. That is why we have always been clear-eyed in pursuing a deal with India, one of the fastest-growing economies in the world. Despite the strong ties connecting our two nations, not least through our people-to-people connections, there has always been room to strengthen our economic connections.

The deal we have does just that. This is a modern and comprehensive agreement that will increase UK GDP by £4.8 billion in the long run. Our bilateral trade, which is already £43 billion, will increase by £25.5 billion, £15.7 billion of which is expected to be UK exports. India has agreed that, from the first day this deal enters into force, it will cut tariffs worth £400 million on UK goods, a number that will jump to £900 million after 10 years. We have unlocked unprecedented access to India’s procurement market, giving UK companies access to 40,000 tenders worth £38 billion. New commitments of customs and digital trade will make it quicker, cheaper and easier to trade with India than ever before.

I hear the challenge about how those spreadsheets work and the models that sit behind them, and whether we are being optimistic. These are very realistic and measured, but ultimately an approximation of the benefit that this opportunity will bring us. It is also not a limit. We do still have the opportunity to benefit above and beyond the numbers that we have stated. I assure your Lordships that this is based on the modelling of worldwide standards but, at the signing of that trade deal, a full impact assessment will also be published to give noble Lords a little bit more small print to crawl through as well, which I know they will enjoy.

We have locked in access for our service companies, promoted stronger ties in a variety of areas—from innovation to gender to anti-corruption—and, most crucially, we have provided businesses with a certainty in a time when it is dearly lacking. I welcome the support that this deal has already had from across the House and from those who have recognised this for what it is, a landmark agreement with one of the most exciting and dynamic economies in the world.

I have also been warmed by the support from the businesses that will be using this deal, including the British Chambers of Commerce, the Institute of Directors, the Confederation of British Industry, the Scotch Whisky Association, the National Farmers’ Union, the Food & Drink Federation, techUK, Small Business Britain, the Premier League, Standard Chartered, Smith & Nephew, Coltraco and more.

I want to address the double contributions convention, which we have agreed to negotiate and implement in parallel with this free trade agreement. There has been much speculation, and indeed misinformation, regarding this element of the agreement. To set the record straight, this is a reciprocal agreement which is designed to prevent the double payment of social security contributions for a specific group of workers known as “detached workers”, who are sent by their employers on a temporary basis and whose long-term jobs are based in their original country. These agreements are for the benefit of both countries. The UK has agreed numerous DCCs over recent years, including with Iceland, Norway and Liechtenstein in 2023, Switzerland in 2021, the EU in 2020 and Chile in 2012.

There has been speculation this will make it cheaper for UK employers to hire temporary Indian workers than it is to hire British workers. This is not true. This applies only to Indian workers who are sent by their employers based in India to work temporarily in the UK for up to three years. There have also been claims that this agreement undercuts UK workers. In fact, the double contributions convention supports UK workers, particularly those in our world-class service sector. As a whole, this agreement will boost wages in the UK by £2.2 billion, putting money into the pockets of working people right across the country.

I am well aware that many in this House will rightly be keen to understand the intricacies of this agreement and have a keen eye for detail. We have already published the summary document, which includes a brief overview of every chapter within the agreement. My officials are working at pace to prepare the legal treaty, which will be available once the agreement is ready to be signed. As with any free trade agreement, parliamentarians will have ample opportunity to scrutinise the deal, which is subject to the usual ratification procedures under the Constitutional Reform and Governance Act 2010. The double contributions convention will also be scrutinised by Parliament via the standard processes outlined in the CRaG Act. Any legislative changes required will be scrutinised and passed by Parliament in the usual ways before ratification.

I hear the challenge about the human rights record. The UK is a leading advocate for human rights around the world, and we remain committed to the promotion of universal human rights. Where we have concerns, they are raised directly with the Government of India, including at ministerial level. This has been undertaken separately to these trade negotiations, although they are part of building open and trusting relationships with important partners. The avenue to communal trade supports our ability to influence in these matters far more greatly.

There was also a question about whether we are eroding trade and how that will be received. We set out further information on the trade diversion impacts of this agreement in our impact assessment. This free trade agreement will include India’s first ever trade and development chapter in an FTA. Both the UK and India will monitor the effects of the agreement on developing countries. To facilitate effective dialogue in this space, we will aim to share our research and understanding, and this will in turn help inform future development programmes and policies.

To conclude, as my colleague the Trade Minister rightfully outlined in the other place, this deal affords UK businesses certainty and stability during a time of global uncertainty and instability. It is a deal that will give British businesses access to one of our biggest markets abroad while raising wages and driving growth here at home.

18:52

[Lord Hannay of Chiswick (CB)]

My Lords, I thank the Minister for that account of the agreement with India and the deal with the United States. She said what the processes will be for the India deal with respect to this House—that the CRAG arrangements will be triggered—but she has not said anything about the deal with the United States. First, could she possibly reply to the question: what parliamentary scrutiny process will be applied to the deal with the United States? Secondly, could she say whether the United States deal is consistent with the UK’s MFN—most favoured nation—treatment under the General Agreement on Tariffs and Trade, and also whether the US agreement will fulfil the provisions of Article XXIV(6) of the GATT to give a waiver to any discrimination?

[Baroness Gustafsson (Lab)]

I thank the noble Lord for his question. I think he knows that yesterday I commented that I would follow up in writing with the specifics on that, and I will endeavour also to include the noble Lord in that response. As I commented yesterday, my parliamentary knowledge is thin but building, but it is not yet at Article XXIV of the GATT.

[Baroness Curran (Lab)]

I say to my noble friend the Minister that I warmly welcome this Statement, most particularly its emphasis on the negotiations with India in respect of the Scottish whisky industry and the benefits it will bring for that industry but also, more broadly, for the Scottish economy. Will my noble friend the Minister confirm that these negotiations will reduce tariffs on Scotch whisky from 150% to 75% at entry, moving to 40% after 10 years? Given that Labour’s team has succeeded in these negotiations where the previous Tory Government patently failed, does the Minister think it appropriate that the team should perhaps celebrate with a wee dram? If she needs any advice on what Scottish whiskies she could partake in, I am more than happy to provide that introduction.

[Baroness Gustafsson (Lab)]

That is wonderful to hear—a worthy celebration indeed. Of course, I am delighted that, as a result of this deal, Scotland will benefit from significant tariff liberalisation for a whole variety of its exports, which includes whisky, for which the current 150% tariff will reduce to 75% from day one of the deal, reaching just 40% after 10 years. The Scotch Whisky Association described the deal as

“a once in a generation deal and a landmark moment”

which is “transformational” for Scotch whisky exports.

[Lord Lansley (Con)]

My Lords, I know many of us who were on the International Agreements Committee at an earlier stage, when we were looking at the difficulties of negotiating a deal with India, realise that it is a significant achievement and very welcome. It is not, however, as comprehensive as we had hoped it might be. Positively, I am very glad to see the procurement opportunities that it offers. In that regard, access to procurement in India is very large scale, but we need something which is digitally available, a bit like our own Tenders Electronic Daily. Is there an expectation that small businesses will have access to those procurement opportunities through that kind of mechanism? Secondly, we had hoped, at one time, that we might—and it would be very significant—have an investor-state dispute settlement provision in the deal. I do not understand that there is such a thing, but are there any side letters about giving assurance to UK investors in India for the future? Regarding parliamentary scrutiny, the CRaG provisions will apply, but would the Minister reiterate what we call the “Grimstone rule”—that is, if our International Agreements Committee was to recommend that the deal should be debated by this House, that such a debate would take place before the Government proceeded to ratification?

[Baroness Gustafsson (Lab)]

On the investor treaty and how we are making sure that we get investor protections for people looking to invest across borders, the bilateral investment treaty is not included as part of this free trade agreement. That is the next stage in these agreements, and that will be followed up afterwards. It is not part of the free trade agreement, but those negotiations are still ongoing and will be part of future conversations. Forgive me: the noble Lord asked a second question; would he mind just repeating it?

[Lord Lansley (Con)]

The Grimstone rule is essentially that the Government commit that, if our International Agreements Committee said that the treaty should be debated by this House, that debate should take place before the Government proceed to ratification.

[Baroness Gustafsson (Lab)]

I will follow that up with the noble Lord.

[Baroness Hoey (Non-Afl)]

My Lords, the Minister will know that not all these trade deals apply to Northern Ireland. Yesterday in the other place, the Secretary of State for Business said basically that that was because of the Belfast/Good Friday agreement and the Windsor Framework and we had to protect the Belfast/Good Friday agreement. Could the Minister give me exact detail of where it says in the Belfast/Good Friday agreement that businesses in Northern Ireland should be treated differently and that we should be left under the European Union’s court and rules? Would the Minister perhaps accept that we are getting a little bit tired of the Good Friday/Belfast agreement being used in so many different ways?

[Baroness Gustafsson (Lab)]

I hear the noble Baroness’s frustration. We want businesses in Northern Ireland to be able to benefit from this to the fullest extent that they can, and that is absolutely what we expect here. Businesses in Northern Ireland, exporting their goods and services will benefit from this free trade agreement, just as businesses elsewhere within the United Kingdom will. Businesses exporting from Northern Ireland will therefore benefit from the free trade agreement with India, so this should be a good news story. When we think about businesses importing into Northern Ireland from India—India-originating goods entering Northern Ireland—they will do so under the terms of this free trade agreement provided that those goods are not at risk of entering the EU. This is where the Windsor Framework kicks in, making sure that, under the usual process of the Windsor Framework, that is protected. Businesses operating within Northern Ireland will benefit from the terms of the free trade agreement.

[The Lord Bishop of Manchester]

My Lords, I too welcome both trade agreements in recent weeks and congratulate His Majesty’s Government on achieving them. I know that in my diocese in Manchester, the large Indian diaspora community will be working hard to help British exports where they have improved opportunities.

I am not sure that the Minister quite answered the question from the Liberal Democrat Front Bench, with references to human rights and climate change. I want to widen that slightly with regard to the upcoming trade strategy that the Statement referred to and ask whether there is any ethical component to it? Will moral considerations play any part in negotiating the trade agreements, or is trade, in effect, an ethics-free zone?

[Baroness Gustafsson (Lab)]

On the environmental aspect, this is India’s first ever chapter on the environment within a free trade agreement and it goes further into this area than it has ever gone before. The agreement requires India to promote high and continually improving levels of environmental protection, reaffirms our joint commitment to the Paris agreement and strengthens environmental standards through non-derogation commitments. It is a big first step, but a free trade agreement cannot fix all environmental issues. Those are most effectively tackled when we work directly and closely with our partners through this international approach. Having a deal like this solidifies our relationship and provides much broader access and opportunity to exert that influence.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, I thank my noble friend the Minister for the Statement. I welcome this trade deal, and I, for one, welcome the Belfast/Good Friday agreement and the Windsor framework. I believe that we should avail ourselves of every opportunity to access trade opportunities wherever they may arise, whether in India, the EU or North America, notwithstanding certain, shall we say, threats that may be made. In light of a previous question, what discussions will be held with the Northern Ireland Executive about potential opportunities for trade between Northern Ireland and India to avail of every opportunity and our ability to access the UK internal market and the EU in terms of goods?

[Baroness Gustafsson (Lab)]

I thank my noble friend for that question. This free trade agreement presents a selection of opportunities for trade between India and Northern Ireland, but it is not the only one. We will be working closely with the devolved Governments to think about those opportunities and build on them collaboratively. In my particular area, investment, we are working closely with those Governments to understand what those trade and investment opportunities are and how we, as that central Government, amplify some of them. When I travel the world, I talk to investors and share opportunities not just within a mile’s radius of where we stand today but across the UK, so that benefit can be felt throughout.

[Baroness Falkner of Margravine (CB)]

My Lords—

[Baroness Lawlor (Con)]

My Lords—

[Lord Lilley (Con)]

My Lords—

[Captain of the King’s Bodyguard of the Yeomen of the Guard and Deputy Chief Whip (Baroness Wheeler) (Lab)]

My Lords, it is the turn of the Tory Benches.

[Baroness Lawlor (Con)]

The Minister mentioned that Indian firms could send their employees to work here. Do the Government have any idea of the numbers involved? Will they put a cap on those numbers, bearing in mind the Prime Minister’s statement yesterday and that of the Home Secretary? What mechanisms will be in place to ensure that when the three years are over, those employees will return? The Minister mentioned that there was a worry, which she answered, that they would undercut British workers. What steps will be taken so that UK workers—local workers—can avail themselves of the opportunities of this deal by seeking employment with Indian firms?

[Baroness Gustafsson (Lab)]

To provide some reassurance, there is no change in the visa process. The points-based immigration system is not affected, so there is no change in the various routes for visa applications as a consequence of this deal. In those limited instances where detached workers are employed by an Indian company on a short-term contract within the UK, they will not be paying social security contributions in both situations. This will not in any way change the immigration policy around visa applications; that will be consistent with the current processes to ensure that any visas granted are applied and people are understood to be in the country legally. Where they are not, the procedures will be as normal.

[Baroness Falkner of Margravine (CB)]

My Lords, I declare an interest as chair of the Equality and Human Rights Commission, but I am speaking in a personal capacity today. I have not heard the Minister explain whether, in following the usual processes, the Government will publish a human rights assessment and the other impact assessments mentioned by the noble Lord, Lord Purvis of Tweed, in advance of the debate in this House. On a slightly different point, in the projections and the wonderful figures that her modelling paints for a future some decades out, have the Government taken into account the long-term impact of geostrategic instability in south Asia, which we are witnessing as we speak?

[Baroness Gustafsson (Lab)]

In terms of the process and the timing of the impact statement, negotiations have concluded so we are in the final stages to get the treaty signed; it will happen as quickly as possible— I hope in the coming months. There will be a process for CRaG, and it will be discussed at parliamentary level. A full impact statement will be released, as well as the full trade agreement, on signature, so that should be available shortly. The human rights aspect is subject to an ongoing conversation and will be dealt with separately.

[Lord Lilley (Con)]

I strongly support the free trade elements in this deal, and not just because it is a Brexit benefit, which I am sure the Minister welcomes. Given that the Indians strongly wanted to link immigration to this free trade deal, can she give us an assurance regarding the strange loophole in the intercompany transfer arrangements? Although not incentivised by the tax issues to which she referred, has there been a guarantee that it will continue? Has there been any change in the situation since the last published figures, which showed that two-thirds of all the inter- company transfers coming into the country came from the contractor route? That means that people are migrants, employed by a contractor and then supplied to British firms, and 97% of those come from India. The loophole seems to be geared to the needs of the Indian desire to export some of their people. Can the Minister confirm that no assurance has been given that this loophole will not be closed? The last available figures show 26,000 people coming from India in a single year.

[Baroness Gustafsson (Lab)]

I shall repeat some of the statements that I made earlier. We are not giving away more visas or creating new routes as part of the deal. Existing mobility routes have been expanded to cover additional sectors, so a broader number of sectors will now be considered for that mobility visa, but that does not necessarily change the quota. It is the same number of people accessing those facilities. The facilities have not changed; it is just that we will consider a broader range of sectors when considering those visa applications. To qualify for the routes, professionals must demonstrate that they meet strict criteria for professional experience and qualifications, consistent with the current process.

[Baroness Hoey (Non-Afl)]

My Lords, I know the Minister is honest and straightforward, as, of course, all noble Lords are, but would she like to state what it seems no other Government Minister wishes to state: that we would not be having this discussion or these deals if we had not left the European Union?

[Baroness Gustafsson (Lab)]

I try to be as honest and straightforward as I possibly can. I refer to the numbers that we talked about when we talked about modelling the numbers. There are a lot of what ifs and hows, but the reality is that we have to deal with the state of the world as it is today. That presents threats in some corners but opportunities in others. What was in front of us was the opportunity to build and expand our relationship with India in a way that supports both our nations, and that is an opportunity that we grabbed with both hands and made the most of.

[Lord Lilley (Con)]

I am grateful for the frank and open reply that the Minister gave to my question, which I actually found rather worrying. I had not realised that there were existing restrictions on the intracompany transfer route to particular sectors, and that that was going to be liberalised and widened to additional sectors. Could she possibly write to me, and put a copy of the letter in the Library, about what the extent was before, how wide it will be in future and some estimate of the extra migration into this country that is going to come? Was any account taken of that in the Statement on migration from the Home Secretary the other day?

[Baroness Gustafsson (Lab)]

I assure the noble Lord that that worry is unfounded and that the numbers will not change. I am happy to write to him to follow up on the sectors that will now be included.

[Baroness Lawlor (Con)]

Could the Minister write to me and let me know what numbers are involved in company transfers to this country as matters stand? Do we have any idea of the numbers that companies will want permission to send here?

[Baroness Gustafsson (Lab)]

I will be happy to write to the noble Baroness.

Employment Rights Bill

Committee stage
Tuesday 13th May 2025 Lords Chamber

Committee (3rd Day) (Continued)

19:12

Debate on Amendment 76 resumed.

[Lord Harlech (Con)]

My Lords, I support Amendments 127, 128 and 139 in the name of my noble friend Lady Penn. In so doing, I declare my interests as an employer and as the father of a four month-old son.

The amendments in this group seek to deliver a fairer, more modern and more economically rational approach to paternity leave in this country. They are modest in scope but transformative in impact. They are not about political ideology; they are about justice, equality, family well-being and economic prudence.

The case for action is overwhelming. Today in the United Kingdom we grant mothers 52 weeks of maternity leave. Fathers receive just two weeks and are paid a mere £187.18 per week for it, which is less than half the national living wage. That is not support, it is a symbolic gesture, and one that fails our families, our economy and our vision for a truly modern and inclusive society. As we have heard, the UK has the least generous paternity leave system in Europe and we rank 40th out of 43 OECD nations. While 22 OECD countries offer six weeks or more of well-paid reserved paternity leave, the UK offers just 0.4 weeks of full-time equivalent paid leave. Is that the legacy that we wish to defend?

The amendments seek to correct that imbalance. They would do three vital things: make statutory paternity pay a day-one right, just like paternity leave will be under the Bill; increase paternity leave from two weeks to six and raise the rate of pay to 90% of the father’s salary, capped at median earnings; and require transparency from large employers by mandating the publication of their parental leave policies. Each of those proposed reforms is supported by robust evidence, each is economically justified and, perhaps most importantly, each is backed by overwhelming public support.

The Government rightly propose to make paternity leave a day-one right, yet they do not extend that logic to pay. What message does that send—that a father may take time off but must go without income to do so? Incidentally, it is worth noting that that is currently the arrangement in your Lordships’ House. Perhaps if the Government are about fairness and workers’ rights, as they purport to be, that may be something that they wish to take up with the commission.

Research shows that the biggest barrier to fathers taking paternity leave is affordability. Nearly three-quarters of those who cut their leave short did so because they could not afford to stay off work any longer. What use is leave if it is unpaid?

Why six weeks, and why 90% pay? It is because we know, from the experience of countries such as Sweden, Germany, Spain and beyond, that reserved well-paid leave for fathers leads to profound benefits for families, for women’s equality, for children and for national prosperity. OECD data shows that, in countries offering fathers six weeks or more of well-paid leave, the gender wage gap is 4% smaller and women’s labour force participation is 3.7% higher. Why? It is because shared caregiving allows mothers to return to work sooner and on fairer terms.

However, this is not just a women’s issue; it is a fairness issue for all parents, and smart economic policy. The economic argument is striking. Closing the gender pay gap could boost UK economic output by £23 billion, while increasing paternity leave to six weeks at 90% pay could generate an immediate economic benefit of £2.6 billion. That is based on sound modelling endorsed by reputable analysts, including the Joseph Rowntree Foundation.

Moreover, 90% of businesses surveyed by the CBI say that inclusive workplace practices help them to attract and retain talent. Nearly three-quarters of employers that offer enhanced paternity leave report higher productivity—we were discussing productivity rates in this country in earlier groups; this is a solution to help that—and employee engagement. So let us discard the myth that this would be a bureaucratic cost; in truth, it would be a smart investment for business.

Let us also remember the human case. Better paternity leave benefits children. As my noble friend Lord Bailey said earlier, children with engaged fathers show higher academic achievement, greater resilience and stronger social skills. It benefits mothers: when care is shared, women can more easily return to the workplace and pursue their careers. It benefits fathers: longer paternity leave leads to better mental health—something that we also heard about earlier—stronger father-child bonds and more engaged parenting throughout childhood. If we want to build a society where men are not just allowed but expected and supported to care for their children, then this is the place to start.

The public are with us on this point. Some 81% agree that more generous paternity leave is good for families and for the country. Support crosses party lines: Labour, the Conservatives, the Liberal Democrats, the SNP and Reform all back this measure. This is not a fringe issue; it a mainstream demand and a moral necessity.

We have what is perhaps a once-in-a-generation opportunity to reshape the way this country supports fathers, mothers and children in their earliest days together. The proposed amendments are reasonable, grounded in evidence and long overdue. I urge the Government to accept them.

[Baroness Smith of Llanfaes (PC)]

My Lords, it is a pleasure to follow the noble Lord, Lord Harlech, who made a compelling case for these amendments. I rise to speak in strong support of Amendments 139 and 76, tabled respectively by the noble Baronesses, Lady Penn and Lady Lister.

The UK’s statutory paternity leave—just two weeks, paid at £187.18 per week—is the most limited in Europe. In many OECD countries, six weeks’ leave at the equivalent of full pay is standard. By comparison, our offer is inadequate and outdated.

Eligibility for paternity leave is also restricted. It requires continuous employment with the same employer for 26 weeks before the 15th week prior to the due date. That excludes many fathers, especially those in insecure work, the self-employed, or those working in gig economy roles. Many are forced to take unpaid leave or use holiday just to be present at the start of their child’s life.

The impact is significant. The TUC reports that over half of families struggle financially when a parent takes paternity leave, and one in five do not take the leave they are entitled to, mostly for financial reasons. Research from Pregnant Then Screwed found that 70% of fathers who did not take their full leave had to cut it short due to cost.

This is not just about finances; it affects bonding with the child and support for the mother or birthing partner, and it reinforces gender inequality in unpaid care. The lack of accessible leave for fathers limits shared parenting and is a contributor to the gender pay gap and future pension pot inequality.

The Employment Rights Bill includes provisions to address some of these issues. Clauses 15 and 16 remove the qualifying periods for unpaid parental and paternity leave. Clause 17 removes the requirement to take paternity or adoption leave before parental leave, allowing paternity and adoption leave to be taken following shared parental leave. However, these clauses fail to tackle the low level of statutory paternity pay, or to extend fathers’ and second parents’ leave entitlement past two weeks.

While the Labour Party committed in its manifesto to review the parental leave system more broadly, the Employment Rights Bill provides an opportunity in the here and now to implement changes that would make a real difference to families and people considering having children. The noble Lord, Lord Bailey, mentioned the lower birth rate—an important context that we must take into account in considering in these amendments.

Amendment 139 from the noble Baroness, Lady Penn, offers a practical and immediate step forward. It would require statutory paternity pay to be a day one right, removing unnecessary barriers for thousands of working parents.

Amendment 76 from the noble Baroness, Lady Lister, backed by the noble Baroness, Lady Penn, would mandate a comprehensive review of paid parental leave within six months of the Bill becoming law. Importantly, it sets the terms of that review: to consider a statutory, non-transferable period of paid leave for second parents, to raise pay levels, and to include the self-employed.

This is not merely a social issue; it is an economic one. Many noble Lords have mentioned the modelling by the Joseph Rowntree Foundation and the Centre for Progressive Policy, which suggests that increasing paternity leave to six weeks at 90% of earnings could contribute £2.68 billion to the UK economy by supporting more mothers to return to work and encouraging shared care from the outset.

Countries with more than six weeks’ paid paternity leave have significantly smaller gender pay and participation gaps, as we heard in the international examples shared by a number of noble Lords during this debate. The benefits are clear, and the public support reform—only 18% believe the current two-week offer is sufficient.

Other amendments in this group have been powerfully spoken to, such as Amendment 80 from the noble Lord, Lord Palmer, and Amendment 127 from the noble Baroness, Lady Penn, which both propose extended leave and fairer pay.

The case for reform has been compellingly made in this group. The Employment Rights Bill offers a real opportunity to modernise paternity leave, benefiting families, the economy and gender equality at work. I urge the Minister to consider the strength of the arguments presented today and to respond with the action that it deserves.

[Lord Ashcombe (Con)]

My Lords, I rise to speak in support of Amendments 127, 128 and 139 in the name in my noble friend Lady Penn.

I would like to think that the birth of any child is an important day in the eyes of the father as well as the mother; yet, when it comes to the parental leave granted by companies, they are treated very differently: up to 52 weeks for the mother and two weeks for the father. On this basis, as we have heard, the United Kingdom compares very unfavourably with other European nations. In addition, 22 OECD nations offer more than six weeks, paid at the equivalent of 100% of salary.

The Government’s weekly rate of statutory pay, for the two weeks that it is paid to fathers in this country, is currently the lesser of £187.18 or 90% of average weekly earnings. This is a modest amount by any measure, given that the average full-time working man is paid just under £700 per week.

We have heard from other noble Lords of the benefits to fathers themselves, as well as mothers and children, when fathers are permitted to spend longer with the family in the early period of a child’s life.

I wish to draw on my personal experience. As I have said before, the company that I work for—Marsh, a very large insurance broker—now has a mature policy on paternity leave. Fathers are allowed to take up to 16 weeks’ leave, and the company ensures that they continue to be paid the equivalent of 100% of their salary during their time away from the workplace. Importantly, their job remains open for this period to facilitate their return. This benefit was not available to me when my sons were born in the 1990s—unlike the noble Lord, Lord Russell of Liverpool, I have not yet reached grandfatherhood.

The time allowed must be taken within 52 weeks of the birth of the child, or children in the event of a multiple birth. I am sure that our competitors offer something similar, as competition for staff is an ongoing issue, and benefits count enormously in any discussion should a member of staff wish to change employer. Such a policy helps to define the culture of a company that cares not only for itself but also for the lives of its colleagues.

I do not believe that Amendment 128, which asks for parental leave policies to be published by large companies, is making an onerous request; indeed, publishing them would enable meaningful comparisons, inform jobseekers and encourage best practice across industry. I support it.

As I mentioned in an earlier group, happy staff tend to do good work. This is certainly a stressful time in any family’s life, and the mental health of staff is important, as we have heard today from my noble friend Lord Bailey of Paddington and others. It is one thing for a large company with the ability to cover a colleague’s workload to offer such a period of paternity leave, but this is obviously more challenging for smaller companies.

I am not suggesting for one moment that all companies should offer such generous periods of paternity leave as my own, much as I would have enjoyed it in my time. The birth of any child is, I hope, an exciting experience. It is also, in my experience, a somewhat nerve-wracking one, which can be ameliorated by parents being able to spend more time together during this period.

Two weeks of paternity leave is simply not enough. I encourage the Government to extend the statutory period for paternity leave to six weeks, as suggested in Amendment 127, and to provide a more generous level of salary. I hope that this will encourage fathers to take off this period, which, as I have demonstrated, is exceeded in some workplaces.

Finally, I will look briefly at Amendment 139, again in the name of my noble friend Lady Penn, on which I have changed my opinion during this debate. I believe that companies of all sizes feel that day one paternity leave is a step too far when the new employee has not even walked through the door. However, if the Government insist on this, it seems only right that fathers should receive statutory pay as a minimum. Companies obviously still have the opportunity to decide whether to go further, as would be the case for employees who have been part of the workforce for a certain period of time.

19:30

[Lord Gascoigne (Con)]

My Lords, I support Amendment 127 from my noble friend Lady Penn. I declare an interest—which I am increasingly discovering to be a growing financial interest—in the form of my two daughters, who are the most precious things to me.

I confess that I am glad that it is my noble friend Lady Penn who is leading the charge on this amendment, and the noble Baroness, Lady Lister, leading the group. I rise with some trepidation. I am not alone in being conscious that, in speaking to this amendment, as a man I am putting myself slightly in the firing line by somehow implying that a man should have exactly the same as the woman who has just carried and given birth to the child. As has been said, this is not about more rights for the man. It is more than that. It is about ensuring a dad can be at home to play their part for the child and, crucially, be there for the mum.

I am lucky and immensely grateful that, on both occasions when my wife gave birth to our children, I had two supportive bosses, one of whom I am delighted to say is still my boss, in the form of the Opposition Chief Whip. When the time came, my noble friend worked to give me the support and time I wanted to be with my family. When I was in the Government Whips’ Office, I worked with colleagues—two of whom I am pleased to see here, in the form of the noble Lords, Lord Evans and Lord Harlech—to ensure that we all got the time at home that we wanted, especially me. This is not unique, but I was lucky: lucky that it was offered, lucky that it was an open dialogue, lucky that I could ask for what I would like without recourse and was completely understood, and lucky that the support extended beyond the time I was at home. I was also lucky that my child was healthy and lucky that I had my in-laws around to help out.

Like so many in the country, I wanted to be at home to help, but also to share those early moments—the precious moments in a young child’s life that were mentioned earlier. I was there to help, tidy, ferry, feed, give cover and support my wife, who was recovering after surgery. To explain my personal circumstances, both of my children’s births were not simple. The first required emergency surgery, and then a return to hospital for another stay a week after coming home. Our second child’s birth was also complicated. Despite being a planned caesarean, the surgery did not go well and it required weeks of hospital visits. There is no way at all that my wife, on her return, could have looked after a newborn child, never mind our eldest or, indeed, herself.

I say this not for sympathy, or to suggest that I am special or unique, or deserve better support than others. General statistics show that, on average, a labour can last up to 18 hours. While around 46% of women who give birth in England spend one day in postnatal care, around 40% of women spend two days or more. Caesareans have increased over the last decade, amounting to over 40% of births. It is worth reflecting that the advice on caesareans is that for weeks the mother should not lift anything heavier than her own baby.

Not everyone is able to have a wider family network to rally in support. While I was lucky that I had support at work, some are not so lucky. They do not have a choice and have to return to work sooner than they would like to, as the noble Baroness, Lady Smith, said. Indeed, I read online that one dad was back at work 24 hours after their child was born.

I am a realist and I know that money does not grow on trees, and many businesses are already providing longer and better parental leave. Some may say that they have concerns about the impact on business and the economy, and I will not comment on the Bill as a whole, but it is obviously right that each and every day we should be supporting and helping businesses to grow—they pay the taxes and employ people.

Research shows that three-quarters of employers who offer extended leave see an increase in productivity and engagement, and almost 100% of fathers said flexibility is a deal breaker when looking for employment. As my noble friend Lady Penn said earlier, extended leave is good for parents, so that they can help and support one another; it is good for the child, to ensure that support is there for them, and to build bonds as part of a new unit; and it is good for forming another special bond, the one between employer and employee. I hope that all noble Lords, especially in my own party, recognise the merits of this amendment as something that is good for both business and families.

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

My Lords, I will speak very, very briefly. It is heartening to hear support for the amendments in this group right across the House. I will speak in particular to those from the noble Baronesses, Lady Lister and Lady Penn. I have already shared with the noble Baroness, Lady Penn, that, when I was at the TUC, I very, very vividly remember having conversations with young men who were working as riders and delivery drivers, and they really, really wanted to be good dads. They had young babies and children, and what was most important to them—and I hope others will reflect this in paying attention to how we make working families’ lives better—was predictability of shifts and guaranteed hours, so they would know how much money they could earn, but they also wanted paid paternity leave.

To keep this really, really brief, I have a couple of questions for my noble friend the Minister before she responds. First, can we accept that the starting point for a review would be to recognise that, compared with other countries, the UK is so ungenerous in its paid paternity leave? We do not need a huge review to know that; it is our starting point. If we are to move into the 21st century, we also need to recognise that new dads from all sorts of backgrounds want time to bond with their babies and be involved more equally in their care. Secondly, will this review focus specifically on paid paternity leave, working from the simple premise that, unless it is paid, there are whole swathes of new dads who simply cannot afford to take it?

I have been encouraged by the discussion around the House. I think there is a cross-party consensus that we all want to see new dads having that opportunity. We all know it will bring benefits for women—including closing the gender pay gap—and opportunities for children to have a better life, too.

[Lord Sharpe of Epsom (Con)]

My Lords, I thank my noble friend Lady Penn for her very thoughtful amendments in this group. I acknowledge the valuable contributions from all noble Lords, in particular the noble Baroness, Lady Lister, for introducing her amendments, and the noble Lord, Lord Palmer of Childs Hill, for introducing his amendments and, perhaps more importantly, reminding the House of the Conservative-led coalition Government’s work in this area—although I note that he did not heap praise on the then Secretary of State for Work and Pensions, my right honourable friend Iain Duncan Smith.

We fully recognise and support the intention behind these proposals, which is to strengthen support for families and in particular to enhance the role of paternity leave in allowing fathers to spend essential early time with their children. This is a laudable aim that clearly finds broad sympathy across the House.

However, while the objective is clear and commendable, we must also consider the practical implications of how such policies are implemented, particularly in relation to the impact on businesses. Many employers, large and small, continue to face significant challenges in the current economic climate, as we have discussed at length this evening. The introduction of new requirements, even when limited to large employers, must be approached with caution and care, and I acknowledge that my noble friend Lady Penn addressed many of those concerns directly in her speech.

As for the reporting obligations set out in Amendment 128, tabled by my noble friend, these would apply to businesses with 250 employees or more. While this threshold helps to focus the requirement on larger organisations, we should still be mindful of the potential administrative and financial burdens such reporting could entail. Even within that category, resources vary significantly, and not all may be equally equipped to take on new reporting functions—a point that was addressed by my noble friends Lord Bailey and Lord Ashcombe. That said, transparency and data collection can play a valuable role in shaping effective policy. If it can be clearly demonstrated that these measures would bring mutual benefits, improving employee well-being and retention, for example, without imposing disproportionate costs or complexity on employers, it is certainly something that we should be prepared to consider further.

Ultimately, we have to strike the right balance, ensuring meaningful support for families while safeguarding the viability and flexibility of the businesses that employ them. That is the lens through which we should view not just this amendment but the broader provisions of the Bill.

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

My Lords, this has been a wide-ranging, informative and very exciting debate. I thank all noble Lords who have contributed. I take this opportunity to congratulate the noble Lord, Lord Harlech, on his four month-old son. I begin by recognising the key role that parental leave plays in supporting families—I wish it had been available when I became a father, at a much older age, some 18 years ago. I thank the noble Lord, Lord Gascoigne, for sharing his story about the difficult time he had during the birth of his children.

This Government understand that the arrival of a child, whether through birth or adoption, is the most transformative time in a family’s life. We understand that the current parental leave system needs changing so that it better supports working families. We have committed to do this and we are taking action in a number of different ways. Through this Bill, the Government are making paternity leave and parental leave day-one rights, meaning that employees will be eligible to give notice of the intent to take leave from the first day of employment. I hope that many noble Lords will welcome this position. This brings such leave in line with maternity and adoption leave, so simplifying the system.

[Baroness Penn (Con)]

The Minister said that this brings paternity leave in line with maternity leave, but for maternity leave, the right to pay is also a day-one right. Does he acknowledge that the Bill does not create alignment between maternity and paternity?

[Lord Leong (Lab)]

The noble Baroness is absolutely right. I just said that the leave is the same as maternity leave, not the pay. This brings paternity leave in line with maternity leave and adoption leave, thereby simplifying the system. We are removing the restriction preventing paternity leave and pay being taken after shared parental leave and pay, to further support working parents in assessing the entitlements available to them. Separate from the Bill, planning work is under way for the parental leave review, which will explore how well the current system supports working families and what improvements could be made.

Amendments 127, 80, 138 and 139 seek to make changes to paternity leave and pay. Amendments 127 and 139 are in the name of the noble Baroness, Lady Penn. Amendment 127 seeks to extend statutory paternity leave and pay from two weeks to six weeks and to increase the rate of pay to the lower of 90% or national median pay—although the drafting relates specifically to pay. Amendment 139 seeks to make statutory paternity pay a day-one right for all employees by removing the current continuity of working requirements. The noble Lord, Lord Palmer, has laid two similar amendments, Amendments 80 and 138. Amendment 80 would increase the minimum length of paternity leave from two to six weeks and require regulations to introduce the ability to take paternity leave at any time in at least the first year following birth or adoption. Amendment 138 calls for the existing flat rate of statutory parental payments to be increased, by doubling the rate from £184.03 to £368.06.

I hope to reassure the noble Baroness and the noble Lord, in part by highlighting several reforms to paternity leave and pay which took effect in April last year. These changes now allow eligible parents to take their leave and pay in two non-consecutive weeks; to take their leave and pay at any point in the first year after the birth or adoption of their child, rather than only within the first eight weeks, as was previously the case; and to give shorter notice for each period of leave. I hope that the noble Lord, Lord Palmer, will therefore agree that, while well-intentioned, Amendment 80 is not necessary in relation to when paternity leave is taken, for the reasons I have just explained.

19:45

I turn now to parental pay. Amendment 139 would make statutory paternity pay a day-one right. Currently, no parental pay entitlements are available from day one, including maternity pay.

[Baroness Penn (Con)]

Will the noble Lord clarify whether he just said that there are no day-one rights to parental pay, including for maternity?

[Lord Leong (Lab)]

I will read it again. Amendment 139 would make statutory paternity pay a day-one right. Currently, no parental pay entitlements are available from day one, including maternity pay.

[Baroness Penn (Con)]

Does the noble Lord acknowledge that maternity allowance is available from day one, at the same rate of pay as statutory paternity pay?

[Lord Leong (Lab)]

The noble Baroness is absolutely right: maternity allowances are available from day one.

Parental pay entitlements require employees to meet an average earnings test. Calculating whether newly employed parents have met this threshold would present a significant challenge to their new employers who administer parental payments.

Amendments 127, 138 and 139 would introduce a cost burden to the Exchequer at a time when public finances are under pressure. When considering calls to increase the level of parental pay generally, any changes will need to take account of the economic situation, the financial impact on employers and the needs of parents, and be made in consultation with businesses and stakeholders. The Secretary of State for Work and Pensions is required by law to undertake an annual review of benefits and state pensions, including statutory payments. This is based on a review of trends in prices and earnings growth in the preceding year. Generally, as with other benefits, parental payments are increased in line with CPI. For example, statutory maternity pay, statutory paternity pay and statutory adoption pay will all increase by 1.7% in April 2025, in line with the September 2024 CPI figure.

[Baroness Penn (Con)]

Does the noble Lord acknowledge that, in linking the payments to CPI, what is actually happening is that we are seeing a bigger gap between statutory payments and people’s salaries, as the national minimum wage is increasing by a greater degree? The process that the noble Lord has laid out is increasing the problem that we have of payments not coming anywhere close to replacing wages.

[Lord Leong (Lab)]

I thank the noble Baroness for that. That is the situation as it is now. Until and unless things change, that is what is happening.

Depending on individual circumstances, additional financial support will be available to parents. For example, universal credit, child benefit and the Sure Start maternity grant may be available alongside statutory parental pay.

I turn to the issue of shared parental leave. Where fathers and partners want a longer period of leave and pay, shared parental leave and pay is already available. Shared parental leave and pay offers up to 50 weeks of leave and up to 37 weeks of pay, which can be created for parents to share from maternity entitlements that the mother does not intend to use. Parents can use the scheme to take leave together for nearly six months, or intersperse periods of leave with periods of work.

I turn to Amendment 136, again laid by the noble Lord, Lord Palmer, and supported by the noble Baroness, Lady Whitaker, which calls for individuals who are self-employed or contractors to have access to statutory adoption pay within six months of the passage of the Bill. It would also require the terms “self-employed” and “contractors” to be defined in regulations, to set out a clear description of who would qualify for statutory adoption pay under this extended eligibility.

I want to reiterate my appreciation and gratitude towards all adoptive parents, who provide loving and stable homes to children who are unable to live with their birth parents. Currently, parental leave and pay entitlements are generally not available to the self-employed. This focus on providing parental leave and pay to employees is rooted in the understanding that employees often have less flexibility and control over their working conditions than those who are self-employed. There is of course the exception of maternity allowance, which is available to self-employed mothers as an important health and safety provision. It makes sure that mothers can take time away from having to work to recover from childbirth, bond with the child and establish breastfeeding if they wish to do so. For parents who do not qualify for adoption pay—for example, those who are self-employed or contractors—statutory adoption guidance advises local authorities to consider making a payment similar to maternity allowance.

In November 2024, the Government published Keeping Children Safe, Helping Families Thrive, in which we allocated £49 million to the adoption and special guardianship support fund for this financial year. This will enable local authorities and regional adoption agencies to offer a wide range of tailored support, including psychotherapy, family therapy and creative therapies, to adoptive families. These services are available following a locally conducted assessment of the adoptive family’s needs.

Amendment 128, tabled by the noble Baroness, Lady Penn, would commit the Government to introducing regulations requiring organisations which employ more than 250 people to publish information about their parental leave and pay policies. It is true that parental leave and pay policies are not extras. They are essential policies that allow people to manage their professional and personal responsibilities and play a huge role in addressing wider social and economic issues.

The Bill contains a number of measures which will improve the support working families receive, most notably by: putting in place legislation that makes it unlawful to dismiss pregnant women, mothers on maternity leave and mothers who come back to work for a six-month period after they return—except in specific circumstances; making flexible working the default, except where not reasonably feasible; and the requirement that large employers produce equality action plans. We feel that we are already striking the right balance between doing more to help working families and ensuring that these changes are manageable for employers to respond and adapt to. Therefore, we do not believe this is the right time to legislate to require publication of parental policies.

Amendment 76, tabled by my noble friend Lady Lister, would make it a legal requirement for the Secretary of State to begin a review of paid parental leave within six months of Royal Assent and to lay the review before Parliament within 18 months. I share the desire of all the noble Lords and Baronesses who have tabled these amendments today: I too want to see change made to the parental leave system to better support families, and I thank them for their clear dedication to improving the lives of parents and children. I recognise their concerns that the current system reinforces outdated gender roles. The responsibility for childcare remains, for many families, with the mother. For many, this will be through choice, but it is also reflective of a system that grants fathers and partners a short period of time off to be with their partner and child during this first year of life. Shared parental leave is available to qualifying fathers and partners who wish to take a longer period, but take-up remains low.

Family life has changed radically since the 1970s, when the then Labour Government passed the Employment Protection Act, which established the right to maternity leave for working mothers. We all agree that improvement needs to be made, and this Government have already begun that work by making paternity leave and parental leave day-one rights through this Bill. This removes a layer of complexity and makes the system more accessible. More needs to be done, and I recognise the fair point raised by my noble friend Lady Lister in Amendment 76 that a review needs to address the disparities in the current system.

The plan to make work pay—a manifesto commitment —committed to a review of the parental leave system within the first year of a Labour Government to ensure that it best supports working families. Planning is under way, and we hope to provide further detail soon.

[Baroness Penn (Con)]

Can the Minister confirm that the Government will meet that manifesto commitment to start the review within the first year, and can he give a timescale not just for when the review will start but for when it will be completed?

[Lord Leong (Lab)]

I can give the commitment that we will do this within the first year of the Labour Government.

[Baroness Penn (Con)]

Is that to start the review?

[Lord Leong (Lab)]

We are planning and conducting the review within the first year of the Labour Government.

It would be premature to make further legislation in this space before the parental leave review has taken place. We will, however, take my noble friend’s ideas and concerns into consideration, and I look forward to updating your Lordships’ House on the review.

Before I conclude, we understand the concerns raised by—

[Lord Fox (LD)]

Before the Minister exits the review, it clearly reflects on a number of the issues in the Bill. It would make an awful lot of sense, if the Government are going to do this within the first year—which, by the way, is not very much longer—to be able to present us with the findings of that review so that we can reflect them in what we bring back on Report.

[Lord Leong (Lab)]

I thank the noble Lord for that intervention, and I will speak to my officials and write to all noble Lords accordingly regarding the review.

We understand the concerns raised by micro and small businesses around proposed day-one rights to paternity leave. Those employers often work with very lean teams and tight margins, so any perceived increase in entitlement can raise questions about costs and continuity. Introducing day-one rights is about fairness and consistency. It ensures that all fathers, regardless of tenure, have the opportunity to support their families at a critical time.

[Baroness Penn (Con)]

I am sorry to interrupt the noble Lord again. He has just talked about the importance of a day-one right to paternity leave, giving fathers the ability to take that leave, but, as the noble Baroness, Lady O’Grady, said, unless it is paid, swathes of dads will not be able to afford to take it. If the Government recognise the importance of this, why will they not make it paid?

[Lord Leong (Lab)]

I thank the noble Baroness for that. As I said in my previous paragraph, we are making day-one rights such as this and consulting, and the review will look at all the issues that the noble Baroness has brought forward. Until we get the review done, I really cannot commit to anything at this stage.

For businesses, this kind of support fosters loyalty and improved retention in a competitive hiring environment. Demonstrating a commitment to family-friendly practices helps attract and keep skilled employees. We also encourage proactive workforce planning. Cross-training and flexible staffing arrangements can mitigate disruption during short absences. Many small employers already manage similar situations around holiday leave or illness, so this policy is not about adding burden but about building a workplace culture where staff feel valued from the very start. We are committed to working with small businesses to ensure that the transition is smooth, supported and sustainable.

I hope I have reassured all noble Lords of the Government’s commitment to parental leave and respectfully ask that the amendment be withdrawn.

[Lord Russell of Liverpool (CB)]

My Lords, before the Minister sits down, can I, first, just make an observation? Having listened to him reading from his brief, I wondered how many members of the team who prepared the brief have themselves ever been able to take paternity leave, because it certainly did not sound like they had. Secondly, as the noble Baroness, Lady O’Grady, said in her intervention, she was very happy with the support from across the House for paternity leave being changed, and quickly. Those of us in the House who are in front of and to the side of the Minister were able to witness the body language of his Back-Benchers. Having seen that, I will say only that I suggest that going and sitting down with them as a group between now and Report might be helpful.

[Lord Leong (Lab)]

I thank the noble Lord for that, and I will probably take up his idea.

20:00

[Baroness Lister of Burtersett (Lab)]

My Lords, I thank everybody who contributed to this debate. I particularly thank all the fathers who contributed; they made it very much an issue for fathers and brought their personal experience to it. That was very important, and I value it.

The noble Baroness, Lady Penn, pushed and pushed on the question of the timeline. As far as I understand it, it is starting to happen and will start within the first year of a Labour Government, but there remains a question about when it will finish. Perhaps the Minister can take away that question and see whether he could bring back in a letter before Report a clearer idea of what the timeline will be and exactly what it will look like. I must say that, if the scenario that the noble Baroness, Lady Penn, laid out is how it is going to be, I would find that disappointing. It would be very disappointing for many people in this Committee who have supported the raft of amendments so powerfully.

I ask that a copy of this debate is given to the Minister responsible for this review. I think it would help that Minister, whoever it is, to see just how strong the feeling is, across this Committee, that this needs looked at—in particular, from the perspective of fathers and the raw deal that they get.

As the noble Baroness, Lady Jones, pointed out, this is a human rights issue. I am more used to talking about women’s rights than men’s rights, but I hear that this is one of those issues where the two come together and the one supports the other. It is so good to see this acknowledged across the Committee in that way.

My noble friend the Minister said he hoped that we had been reassured, but I have to admit that I was not—I am sorry. There was a lot of talk about better support for working families. What I did not hear—I will read Hansard—is a clear acknowledgement that this is about a better deal for fathers, and that from that then flows a better deal for mothers, children, families and the economy. The noble Lord, Lord Sharpe, talked a bit about the costs, but this could be good for the economy and for business, and I think that perhaps that needs to be recognised more.

I will not say any more now. I ask that my suggestion that this debate be brought to the attention of the Minister responsible for the review is taken seriously—there is nodding from the Front Bench in front of me.

I cannot speak for the body language of all my colleagues here on the Back Benches, but I think it has been a very good debate and worth having. We need to think about what we want to do on Report, and I am sure this will come back in some form then. I ask that officials give more thought to what was really motivating this debate in what is presented back to us on Report, because I am not sure that they really got it—and this is too important for it not to be got. I will leave it at that. I beg leave to withdraw the amendment, but I look forward to continuing the conversation across the House.

Amendment 76 withdrawn.

Amendment 77

Moved by

[Lord Palmer of Childs Hill]

77: After Clause 17, insert the following new Clause—
“Foster carer’s leave(1) The Employment Rights Act 1996 is amended as follows.(2) In the title of Part 8B, for “CARER’S LEAVE” substitute “CARER’S LEAVE AND FOSTER CARER’S LEAVE”. (3) After section 80J (Carer’s leave) insert—“80JA Foster carer’s leave(1) The Secretary of State must make regulations entitling an employee to be absent from work on leave under this section in order to undertake activities as a result of being a local authority foster parent.(2) For the purposes of subsection (1), “local authority foster parent” is defined in accordance with section 105 of The Children’s Act 1989.(3) The regulations must include provision for determining—(a) the extent of an employee’s entitlement to leave under this section;(b) when leave under this section may be taken.(4) Provision under subsection (3)(a) must secure that where an employee is entitled to leave under this section the employee is entitled to at least a week’s leave during any period of 12 months.(5) The regulations may make provision about how leave under this section is to be taken (including by providing for it to be taken non-continuously).(6) The regulations may provide that particular activities are, or are not, to be treated as providing or arranging care for the purposes of this Part.”(4) In section 80K—(a) in subsection (1), after “80J” insert “and 80JA”,(b) in subsection (2), after “80J” in both places it occurs insert “and 80JA”,(c) in subsection (4), after “80J” insert “and 80JA”, and(d) in subsection (5), after “80J” insert “and 80JA”.(5) In subsection (1) of section 80L, after “80J” insert “and 80JA”.(6) In section 80M—(a) In subsection (1)—(i) in the opening words, after “80J” insert “80JA”,(ii) in paragraph (e), after “80J” insert “and 80JA”,(iii) in paragraph (f), after “80J” insert “and 80JA”,(iv) in paragraph (g), after “80J” insert “and 80JA”,(v) in paragraph (h), after “80J” insert “and 80JA,(b) In subsection (2), after “80J” insert “and 80JA”, and(c) In subsection (3), after “80J(4)” insert “and 80JA(4)”.”Member’s explanatory statement
This new clause ensures local authority foster parents are entitled to at least one extra week’s leave every 12 months.

[Lord Palmer of Childs Hill (LD)]

In moving my Amendment 77, I shall speak to Amendments 78, 79, 135 and 144 in my name. Amendment 77 seeks to extend to foster carers the leave given to carers, and I hope that noble Lords will see this as a necessary clarification, which is all that it is. Amendments 78 and 79 focus specifically on kinship carers and would require larger employers—those with over 250 staff—to review the support they offer to unpaid carers. Amendments 78 and 79 seek to address a significant gap in employment rights for kinship carers by introducing a new entitlement to kinship care leave. Amendment 78 proposes a provision to establish this right, while Amendment 79 links the proposed entitlement to the broader provisions of the Bill.

These amendments respond to a pressing social need. Over 130,000 children across the UK are currently being raised in kinship care arrangements—more than three times the number in foster care. Despite the critical role that kinship carers play, often stepping in during times of crisis to prevent children entering the care system, they receive far less support, including in the workplace. Introducing a specific entitlement to kinship care leave would provide families with much-needed time and space to adjust, to make the necessary arrangements and to ensure the child’s well-being during what is often a traumatic transition. Not only would this improve outcomes for children and families but it would help relieve pressure on the formal care system, where costs are often excessive and the emotional toll on children is, I am sure, significant. In enabling kinship carers to remain in employment while fulfilling their caregiving responsibilities, these amendments recognise the long-term social value of keeping children within loving, familiar, family environments.

Amendments 78 and 79 would introduce a right to kinship care leave and link it to broader employment provisions. As I say, 130,000 children in the UK are in kinship care, which is more than three times the number in foster care. Kinship carers often step in during family crises, preventing children entering state care, yet they lack formal workplace protections. These amendments would provide time for families to adjust and to support a child’s transition—especially vital in sudden or emergency situations. I maintain that supporting kinship care is cost-effective and reduces reliance on costly private care providers that profit from family meltdown. This is about reshaping workplace culture to reflect the reality of modern families and ensure that children can remain in loving, stable homes. These proposals align with broader efforts to reform the care system and should be viewed as part of a compassionate, pragmatic approach to child welfare.

Amendment 135 would make carer’s leave a paid entitlement. I do not really need to add more than that.

Amendment 144 would require employers with more than 250 employees to consider what support they offer to unpaid carers within their workforce when publishing their gender equality action plans. This is a modest but important step towards recognising the hidden pressures faced by most employees, most often women, who juggle paid work with unpaid caring responsibilities.

Unpaid carers are the backbone of our social care system—where would we be without them? Yet their contribution is routinely overlooked in workplace policies and gender pay gap reporting. By including consideration of unpaid carers in gender equality action plans, we would acknowledge the real-life factors that contribute to disparities in career progression, earnings and job security. Employers cannot meaningfully address gender equality without recognising the care burden that disproportionately falls on women. This amendment is a practical and proportionate way in which to ensure that unpaid carers are no longer invisible in workplace policies.

When drafting my words for today, I did not realise how important kinship care was. One talks about the mothers and fathers, but very often it is the aunts, uncles, grandmothers and grandpas—other people who are kin to the child—who are not recognised in our system as producing the support that our system requires. I hope that noble Lords will support the amendment in my name, which I beg to move.

[Lord Brennan of Canton (Lab)]

My Lords, I shall speak to Amendment 81, standing in my name in this group, if that is in order at this stage. It is a privilege to speak to this amendment. Although it stands in my name, I am just a vessel in this case; the credit for getting the amendment to this stage and in this shape should go to the members of the House of Commons Women and Equalities Committee, but particularly to the wonderful chair of that committee, my good friend Sarah Owen MP. Her tireless and passionate advocacy in raising the issue of the need for bereavement leave following pregnancy loss has successfully persuaded the Government that action is necessary on this particular matter. Therefore, I hope that, when my noble friend the Minister replies at the end of the debate on this group of amendments, he will be able to indicate support for Amendment 81 or at the very least confirm that the Government will bring forward an equivalent amendment on Report.

Listening to and reading the stories of women and their partners affected by pregnancy loss is a very moving and powerful experience. However, unlike other parts of the pregnancy journey, such as IVF, there is often a cloud of secrecy around miscarriage, leading sometimes to a feeling that many women have that it is somehow their fault when pregnancy loss occurs. Sarah herself has spoken publicly with great courage, emotion and eloquence about her own experiences of pregnancy loss, and she has referred to that feeling, which is compounded by the fact that, having miscarried and experienced the related physical and emotional trauma, a woman is expected to apply for sick leave to deal with the bereavement of pregnancy loss.

Miscarriage is not a sickness; it is not a disease, and it is not the equivalent of having a heavy cold or any other infectious condition. Having to take sick leave to deal with the heartbreak of miscarriage trauma reinforces the idea that there is something wrong with the woman. That is the evidence that Sarah Owen’s committee received when it undertook its inquiry into this matter. It is also the case that taking sick leave will often trigger an HR process from an employer, which can enhance a feeling of insecurity of employment at a time of great vulnerability for the woman concerned.

Pregnancy loss bereavement should be treated in the same way as any other kind of bereavement suffered by workers, and it should therefore be a right in law, enacted through this Bill. In addition, this measure would help to lift that veil of secrecy and guilt around miscarriage and build more compassionate and human workplace environments. Sarah Owen herself has spoken movingly about this when describing and discussing her own experience of miscarriage. She said in the Commons:

“I experienced pregnancy loss while I was an MP, and the kindness of colleagues in this place got me though, but at no point did any of them wrap their arms around me and say, ‘Get well soon’; they all said, ‘I’m sorry for your loss.’”.—[Official Report, Commons, 11/3/25; col. 927.]


I believe that this amendment can help to drain that well of loneliness that can be felt when pregnancy loss is left unacknowledged in employment law and in the workplace, particularly as it is such a common occurrence.

Of course, partners need to be involved too. The committee heard compelling testimony from women who had experienced miscarriage that partners needed time to grieve their loss, as well as to accompany their partners to doctors’ appointments and so on. They heard from a witness who nearly bled to death on the way to hospital because her husband was not given time off work.

20:15

Inevitably, questions arise about costs to employers, but the committee heard evidence from employers welcoming the change—not least, smaller businesses wanting a level playing field to be able to do the right thing. The NHS, the largest public sector employer of women, has been offering paid bereavement leave for the last year. In evidence to both the Public Accounts Committee and the Women and Equalities Committee, it said that the costs were negligible.

I hope that my noble friend will honour the commitment given to Sarah Owen in the House of Commons to introduce a statutory entitlement to bereavement leave for pregnancy loss before 24 weeks, the current cut-off period, and in doing so to reassert our values of humanity and compassion and a desire for fairness and equality. I know that if he does so, it will be a moment of both sadness and joy for those who have experienced miscarriage—sadness at the reminder of their loss and of what they had to go through without this provision; joy at knowing that, in future, pregnancy loss bereavement leave will be a right legislated for by the Government, so that women and their partners will not have to experience the added pain of not having a right to statutory leave at a time of the greatest trauma.

Finally, I thank Sarah, as a friend and a comrade, for entrusting me with carrying this amendment forward on her behalf in your Lordships’ House. She is an exceptional person, a brilliant MP and, I am glad to tell your Lordships, in the light of all her experiences, also a wonderful mother.

[Baroness Grey-Thompson (CB)]

My Lords, I rise to speak to Amendment 134, which is in my name and that of my noble friend Lady Finlay of Llandaff.

The aim of this amendment is simple but vital. It seeks to provide day one financial support for parents of children diagnosed with a serious or life-limiting illness. It would create a new statutory right for parents to take a period of paid leave from employment to care for their seriously ill child. This right would apply to parents of children aged between 29 days and 16 years old who are receiving or have received specified types of medical or palliative care. The duration of this leave, including rate of pay, would need to be set out in regulation.

This amendment is tabled in honour of a young boy named Hugh, who sadly lost his battle to rhabdomyosarcoma, a rare form of cancer, at just six years old. His parents, Ceri and Frances Menai-Davis founded the charity It’s Never You to help support the parents of children who have been diagnosed with serious illnesses. They have been campaigning for three years to change the law and are here in the Gallery tonight to listen to this debate.

Throughout Hugh’s treatment, Ceri and Frances saw first hand the immense challenges faced by parents—not just the emotional and physical strain of caring for a seriously ill child but the severe financial pressures that come with it. Each year, around 4,000 families in the UK spend two months or more in hospital with their child, who is undergoing treatment for a life-threatening illness. These parents are being forced to make the impossible choice of earning a living or being by their child’s bedside. The current system is leaving these families unsupported at the most vulnerable moment in their lives. Many are selling their homes, their clothes and turning to crowdfunding sites like GoFundMe just to cover basic living costs, which can go against them in any application for universal credit.

At present, no parent is entitled to any financial support in the first 90 days of their child’s illness. After 90 days, they can apply for disability living allowance, which would help with the costs of caring for their sick child. But even then, successful DLA applications can take up to 20 weeks to be approved.

Of the families surveyed by It’s Never You, 90% believed that immediate financial support would have made a critical difference to the hardships they faced following their child’s diagnosis and treatment. This amendment seeks to build on important progress made through the 2023 Neonatal Care (Leave and Pay) Act. Under this Act, parents of babies admitted to neonatal care within the first 28 days of life and who require a hospital stay of seven continuous days or more, are now entitled to up to 12 weeks of statutory leave with pay for those eligible. This leave is also in addition to existing maternity or paternity entitlements.

Regarding these recent legislative changes, the Minister, the noble Baroness, Lady Merron, remarked:

“No parent should have to choose between being with their vulnerable newborn or returning to work … We are giving parents peace of mind so they can focus on their family.”


Considering this statement, I would like to ask the Minister just one question. The Government clearly recognise that no parent should be forced to have to make such choices between their child’s health and employment. So why are they so reluctant to provide essential financial support to those vulnerable parents who are in equally devastating situations?

[Lord Watson of Invergowrie (Lab)]

My Lords, I wish to speak to Amendment 77 on foster carers’ leave, and Amendments 78 and 79 on kinship carers’ leave. I congratulate the noble Lord, Lord Palmer, on bringing them forward.

Both types of carers, as the noble Lord said in tabling his amendments, provide a huge service by allowing children to remain in loving family settings, and both types will be the subject of wider consideration in the Children’s Wellbeing and Schools Bill. But today there is a need to ensure that the essential caring role they provide is acknowledged by making provision for them to have a right to leave, as do employees.

Foster carers at least receive fees and allowances, although a survey by The Fostering Network last year found that 32% of local authorities pay less than the national minimum allowance to their foster carers, and even those rates are out of date and fail to meet the costs of caring for a child. It is also essential that recognition be given to foster carers’ right to leave from work to enable them to respond to situations in the same way as birth parents are able to do.

There are over 150,000 children in kinship care in England, and yet there is a lack of understanding among the general public as to just what kinship care is and what it involves. It is any situation in which a child has been raised in the care of a friend or family member who is not their parent. The arrangement may be temporary, or it may be long term. Kinship carers need employment leave because they step up in times of crisis to provide love and care to children who may otherwise be sent to the care system—a situation that has often come about because of tragedy and/or trauma.

The period when the child moves in with a family can be difficult. They are likely to need a lot of support. Often, the carer has not planned to take on parenting responsibilities for one or more children, so they may have to spend time attending meetings with children’s services, being involved in court proceedings, finding a nursery or making arrangements with the child’s school and GP. Sometimes, children’s services place an expectation on kinship carers that they at least temporarily stop working, if they think it necessary to meet the needs of the child.

Whether the carer receives any local authority support, in a financial sense, in this situation is dependent on where the carer lives, the type of arrangement and whether the child is or was previously in the care system. More often than not, kinship carers become dependent on social security, which is simply not right or fair. Surveys by Family Rights Group have found that a third of working-age kinship carers are not in paid employment due to their caring responsibilities, and six in 10 kinship carers have to give up work or reduce their hours when the child comes to live with them.

The contrast between adoptive parents and foster carers is stark. Adopters are entitled to 52 weeks of leave and 39 weeks of pay to enable them to settle a child into their home. This is paid at 90% of average weekly earnings for the first six weeks, followed by a payment which currently stands at £184 a week for the next 33 weeks, and employers can usually reclaim almost all those costs. There is no equivalent employment leave entitlement or payment for kinship carers, but there should be. Amendment 78 would introduce significant steps towards that, because providing kinship carers with paid leave would provide families with financial security and lead to direct savings for the Treasury from kinship carers remaining in employment, reduced universal credit claims and greater tax revenues, not to mention wider social benefits from gains in children’s well-being and in GDP.

Foster carers and kinship carers do not simply provide a service to the children they look after: they provide a service to the Government by lessening the demands on children’s services and saving public expenditure. I very much hope that my noble friend will recognise this and give an assurance that she will bring forward a government amendment to right these very obvious wrongs around leave for foster carers and kinship carers, and recognise the vital service that they provide.

[The Lord Bishop of Newcastle]

My Lords, I thank the noble Lord, Lord Palmer of Childs Hill, for tabling Amendments 78 and 79, to which I have added my name in support. My comments will be brief. I add my voice to those of other noble Lords in the Chamber in appreciation of the debates that we have heard today on the detail of the Bill, which in many ways indicate the interrelatedness of the issues before us, and about what it is to live well together to enable the flourishing of every person throughout their whole lives.

I am very grateful to the Minister for her engagement with me over several months on the matter of kinship care, and I acknowledge the Government’s evolving view on how best to ensure consistent and sustainable support for kinship carers. I appreciate that the Minister is open to further conversations, and I look forward to them.

Part of the challenge is providing a clear, agreed and workable definition of kinship care, and there is more work to be done on this, recognising that Amendment 79 sets out in some way to go about this task. It is about finding the right balance to achieve what is needed in supporting kinship carers and is not so open as to be unworkable in law and unrealistic in affordability. That, to me, is a challenge—it is around the parameters of what kinship care is—but I do not think that it is unresolvable.

However, the longer we take to get to this point, the more lives are being impacted. Kinship carers are overrepresented in the health, education and social care sectors, so the withdrawal from this labour market has an obvious impact on wider society. The north-east region, which I serve, has the highest rates of children in kinship care. The impact of this in real terms, given multiple and systemic factors of inequality, is immense.

Amendment 78 would grant kinship carers the right to take statutory paid leave, as the noble Lord, Lord Palmer, said, akin to the entitlements of adoptive parents. It would allow them to spend a period of protected time with the children entering their care as they settle into their new arrangements. Further, it would enable caregivers to remain in employment while they adjust to their new responsibilities and continue contributing to the economic growth that this Government strive for.

I again thank the Minister for her willingness to meet me and engage with these amendments. I urge her to carefully consider the difference these amendments would make to the lives of kinship carers, to those growing up in their loving care and to wider society.

[Lord Young of Cookham (Con)]

My Lords, it is a pleasure to follow the right reverend Prelate, who makes a strong case for more support for kinship carers. I added my name to Amendments 135 and 144 to demonstrate cross-party support for a squarer deal for carers.

Before I add a brief word to what has already been said about carers, I add a quick word about Amendment 77, on foster care. A long time ago, my wife and I were registered foster parents in the London Borough of Lambeth. We did short-term fostering, typically when a mother went into hospital to have a child and somebody needed to look after her existing child or children. It is not quite clear from the wording of Amendment 77 how short-term foster parents might qualify if the amendment became law.

If the definition in Amendment 78 was used—namely, that the fostering of a child had to last a year—then short-term foster parents would not qualify, even though they might have been providing short-term fostering for up to a year with a series of different children. Short-term fostering can last from two days to two years. On the other hand, should a two-day short-term fostering spell qualify for leave on its own? Probably not—so, we need a bit of clarity on entitlement if this is to go further.

20:30

If I may say a quick word on Amendment 135, I declare an interest as vice-chair of the All-Party Parliamentary Group on Young Carers and Young Adult Carers. This amendment would change the Carer’s Leave Act, which did not include remuneration as a matter that had to be considered in the employment contract. I note that, during the passage of the Carer’s Leave Act in the last Parliament—via a Private Member’s Bill supported by the then Government—the then Opposition and now Government challenged the previous Government on why they were not introducing carer’s leave as a paid entitlement. At Second Reading of the Carer’s Leave Bill in the Lords, the noble Baroness, Lady Blake, responding from Labour’s Front Bench, said:

“We fully support the Bill, although we believe that carer’s leave should be paid. We have to ask why it has taken the Government so long to introduce legislation, therefore necessitating its introduction by Private Member’s Bill”.—[Official Report, 3/3/23; col. 555.]

The Labour spokesman in the Commons was even more forthcoming. At Second Reading of the Carer’s Leave Bill in the Commons, Imran Hussain, again responding from Labour’s Front Bench, said:

“We of course support the Bill, but it falls short of what unpaid carers really need, which is paid carer’s leave. Under the proposals set out in our new deal for working people, the next Labour Government will legislate to introduce just that, to ensure that working people can respond to family emergencies as and when they arise without being left out of pocket”.—[Official Report, Commons, 21/10/22; col. 1004.]

Despite those very clear commitments, which I have just quoted, such a provision is completely absent from this Bill. Perhaps the Minister can explain why.

I understand all the reservations about putting yet more obligations on employers, even though some leading employers already provide paid carer’s leave on a non-statutory basis. Perhaps the Minister could explain what the practice is in the department. I note in passing that, based on Centrica’s experience, it is estimated that there would be

“£8.2 billion in productivity gains through increased worker retention, reduced recruitment costs and a reduction in other productivity costs”—

a similar case to that which we heard made in the previous debate on paternity leave.

I welcome the Government’s determination to support people back to work and to aim for an 80% employment rate. Together with their recent recognition that carers’ inability to work is costing the economy £37 billion a year, that makes a strong case for this amendment, but the case for the amendment has been transformed by yesterday’s White Paper on immigration, with its restriction on recruitment from overseas for those working in social care, particularly in care homes. We have already heard the concerns of those who run these homes that this key source of recruitment will be cut off. There is no sign that social service departments will be able to afford the higher costs of care if we are to recruit and train enough people locally.

The NHS and social care have a high number of working carers, but many people leave because of a lack of flexibility and support if they are at the same time unpaid carers—some may then be entitled to carer’s allowance if they qualify under the 35-hour rule. That makes no sense. I believe there is an opportunity here to retain existing carers and to recruit new ones, if there was more flexibility than there is at the moment.

Finally, the Government have committed to “review the implementation of” the Carer’s Leave Act 2023

“and examine all the benefits of introducing paid carers’ leave”.

How is that review progressing, and will it take account of the changed situation since yesterday?

[Baroness Pitkeathley (Lab)]

My Lords, I support Amendments 135 and 144, which relate to unpaid carers. It is always a pleasure to follow the noble Lord, Lord Young of Cookham, who is always so sound on carers’ issues. I declare an interest as vice-president of Carers UK.

Amendments 135 and 144 would provide employees with a statutory right to paid carer’s leave and require employers with over 250 employees to consider what support unpaid carers are given within their workforce when publishing action plans on gender equality. Both seem to be entirely sensible, and I am pleased they have received cross-party support. As noble Lords will know, I have long campaigned for greater employment rights for those juggling paid work with their unpaid caring responsibilities. This Bill is very welcome and includes many provisions which have a positive impact on working carers.

Millions of people are now doing this juggling act of paid work with their unpaid caring responsibilities, but this juggling act is very difficult to maintain. Despite pockets of good practice, a lack of support and understanding from many employers—and too few rights in the workplace—too often leaves carers with no choice but to give up work or turn to part time or insecure work. It is estimated that 600 people per day quit work to provide unpaid care, with real and lasting consequences for them and their families. That is not only bad for them but bad for their employers and the economy. As recently as March, the Government provided a new estimate of the cost to the economy of carers being unable to work, which the noble Lord, Lord Young, quoted. It was a staggering £37 billion a year—a huge figure.

We have made good progress in recent years. Indeed, the entitlement to a week of unpaid carer’s leave was secured, as we have heard, through the Carer’s Leave Act 2023, and it was a positive step in the right direction. However, it was always intended to be just that—we said this endlessly during the passage of that Act, as some noble Lords will remember—as it was a first step to be built on. I welcome that the Government have committed to review the implementation of the current right to unpaid carer’s leave under the Carer’s Leave Act 2023 and to consider whether there is a need for paid carer’s leave. However, I urge the Government to go further and faster to seize the opportunity in front of them. It is clear to me that we should be doing everything we can to ensure that all carers who are able and wish to work are able to do so. Surely this is part of what the Government are trying to do in other areas—encourage people back into the workforce.

Carers UK’s evidence shows that 80% of carers say that additional paid carer’s leave of between five and 10 days would better help them to juggle work and unpaid care, and 50% of carers would find it easier to return to work after a period of absence if they had access to paid carer’s leave. Almost half of those who have given up work or retired early—many people take early retirement specifically to take up caring responsibilities—said that paid carer’s leave would have helped them to stay in employment for longer had it been available at the time.

The modelling that Carers UK has undertaken based on existing employer practice estimates it would cost the Government between £5.5 million and £32 million annually to introduce paid carer’s leave, depending on the rate of compensation employees receive. I know that is a large figure, but it is in fact a small price to pay compared with the huge contribution made to our economy by carers.

Amendment 144, relating to equality action plans, is necessary due to the gendered nature of caring. At the heavy end of caring, women are still much more involved than men, and this impacts specifically on women’s employment. I understand and welcome that Ministers have been engaging with organisations such as Carers UK, as well as carer-friendly employers, over the last year. I am sure they will have heard much about the positive impacts that organisations such as TSB, Centrica and Phoenix Group can have on their employees by promoting best practice. However, that support should not be the preserve of employees who just happen to work for enlightened employers.

I agree with the Government that this Bill is pro-business and pro-worker. These amendments are too, and that is why I hope they will be supported by the Government.

[Lord Hogan-Howe (CB)]

My Lords, I support Amendment 134 from the noble Baroness, Lady Grey-Thompson. She has highlighted that there is a glaring gap in our welfare system. It fails to provide adequate, immediate support for parents whose children fall seriously ill. Although the Neonatal Care (Leave and Pay) Act rightly recognised the need for non-means tested leave and pay when a child is critically ill at or shortly after birth, that protection vanishes as the child grows older. Parents whose children fall seriously ill beyond the neonatal period are left navigating benefits that are not suited to the immediate support they require.

Currently, there are only three options available for parents seeking that financial support. The first is universal credit, which is means tested and not easily accessible. The second, disability living allowance, was mentioned by the noble Baroness, Lady Grey-Thompson. It can only be applied for three months after a diagnosis and then takes an additional 20 weeks—approaching half a year altogether—to process. DLA is also a requirement for claiming a blue badge—just to give an example of how long this process takes. The third option is 18 weeks of unpaid parental leave taken in four-week blocks within a calendar year.

So, there is a gap from day one to day 90 before a parent can apply for financial help. In these cases, it appears families face an impossible choice—financial insecurity or being at their child’s side during the most traumatic moment of their young lives. This amendment addresses that gap, providing a grant to the parents of a chronically sick child from day one. The grant will be limited to the first one to three months, and approved quickly by the consultant, with a renewal every month.

According to data from the Treasury, there are approximately 4,000 children each year who could be expected to have a hospital stay of two months or more. The cost of caring for a chronically ill child is estimated to be around £750 per month. According to estimates by the charity It’s Never You, if the Government were to provide two months of support during this gap period, it would cost around £6 million—a significant amount, but at the lower end of national spending in revenue terms compared with many of the options talked about today.

This amendment seeks to extend the principles of the Neonatal Care (Leave and Pay) Act to children up to the age of 16 in cases of serious illness. It builds on a clear precedent and introduces a compassionate, practical solution—non-means tested support—at that moment of crisis.

The impact on employers will be minimal, affecting, as I have stated, only a few thousand families a year. But the benefit to those families would be profound. This is precisely the kind of change where legislation can make a life-changing difference at very little cost. I urge the Government to consider this amendment, which is in keeping with the spirit of this legislation.

[Baroness Smith of Llanfaes (PC)]

My Lords, before I deliver my remarks in relation to the amendments that I have signed, I will add my support to the amendment on miscarriage leave from the noble Lord, Lord Brennan of Canton. My Plaid Cymru colleagues in the other place also supported that amendment, so I am glad to see that it has made its way to this House, too.

Amendment 135, tabled by the noble Lord, Lord Palmer, would establish carer’s leave as a paid entitlement. I will keep my remarks brief, but I speak from lived experience. I became an unpaid carer at the age of 12. I know what it means to juggle education, work and caring responsibilities while having to repeat my story to NHS staff, college tutors, employers and the DWP. The obstacles I faced are not unique. I know that a number of carers who I spoke to in the past, and continue to do so, continue to face these obstacles. Those experiences led me to campaign on those issues, and I am proud to have influenced positive policy changes in Wales that make life a little easier for young carers trying to stay in education.

Amendment 135 would help build a safety net for the millions of people with unpaid caring responsibilities —people like I once was. The Government have made it clear that getting people back into work is a priority, and they also recognise that unpaid carers’ inability to work costs the economy £37 billion a year. Supporting carers to enter and stay in employment must therefore be seen not only as a social priority but an economic one. Introducing paid carer’s leave is not an expensive proposal. Modelling by Carers UK suggests it would cost between £5.5 million and £32 million per year, depending on the rate of compensation. Set against the cost of lost productivity, high turnover and pressure on health and social care systems, this is a modest and worthwhile investment.

20:45

Paid carer’s leave would directly benefit over 2 million working carers, offering financial security, flexibility and dignity. For employers, it could mean billions in savings via reduced staff turnover and greater employee retention. Perhaps just as importantly, it would build confidence. It could empower carers to apply for jobs that they might otherwise feel shut out of, helping to broaden participation in the workforce and unlock that untapped potential.

Amendment 144, also tabled by the noble Lord, Lord Palmer, would require employers with more than 250 employees to include within their gender equality action plans information on how they support unpaid carers in their workforce. We must not stop at simply getting carers into work; we must also ensure they are supported to stay in work. According to the census, nearly 1 million working-age unpaid carers have left employment because they could not manage their caring responsibilities alongside paid work. Carers UK research also shows that many of these individuals could have remained in employment if only they had received more support from their employer. That is why this amendment is not just sensible but necessary. Requiring transparency from large employers on carer support ensures accountability and progress, particularly when many unpaid carers are women and gender inequality remains persistent in the workplace.

Both these amendments speak to a vision of a more compassionate, inclusive and economically resilient society, which recognises and values unpaid carers and removes the barriers that they face. I urge the Committee to support both these amendments.

[Baroness Lister of Burtersett (Lab)]

My Lords, I rise to support Amendment 135, to which I have added my name. It is a pleasure to follow the noble Baroness, Lady Smith, especially given that she spoke from lived experience, which I think is really important.

I recently attended a policy breakfast about support for working carers, sponsored by the Centre for Care, Sheffield University. The unanimous view was that the leave has to be paid to make a real difference, and that is the message received from carers themselves, gathered by Carers UK. Many, especially those on low income, many of whom as we have heard are women, simply cannot afford to take unpaid leave. In the words of the Centre for Care:

“A statutory right to unpaid carer’s leave in the context of a gender-segregated labour market with a substantial gender pay gap is likely to substantially exacerbate inequality”.


The evidence it has collected shows that we compare badly to many other countries where paid carer’s leave is now taken for granted.

As I said on Second Reading, the argument rests not simply on the social and moral case—the huge difference it would make to the lives, health and well-being of carers—but on the strong economic case. It would increase the likelihood of carers entering or remaining in the labour force, thereby supporting the Government’s aim of increasing employment and promoting economic growth. As a Government-supported task and finish group noted, supporting carers to remain in paid work represents an economic opportunity. TSB, which provides its own carer’s support scheme, is clear about the value it provides for it as an employer, and therefore is one of many organisations calling for the Bill to include provision for paid carer’s leave. It is not just big employers that are supportive: a CIPD consultation with its members found that support among SMEs was not much lower than among large employers.

The original new deal for working people promised paid carers leave. I have a different quote from that given by the noble Lord, Lord Young of Cookham. At the Commons Third Reading of the Private Member’s Bill which introduced unpaid leave just a couple of years ago, the Front-Bench spokesperson said that

“the next Labour Government will be committed to building on this legislation and introducing a right to paid carer’s leave in our new deal for working people”.—[Official Report, Commons, 3/2/23; col. 580.]

However, although he responded sympathetically on the issue on Report for this Bill in the Commons, the Minister could only say that, because the right to unpaid leave was enacted recently, the Government were

“reviewing this measure and considering whether further support is required”.—[Official Report, Commons, 11/3/25; col. 952.]

I echo the question asked by the noble Lord, Lord Young, about whether my noble friend the Minister could explain this shift in attitude. I completely understand that the Government need to consider how paid leave should be designed, not least because we need to learn from other countries. Yet what is there to consider with regard to the need for further support, given the body of evidence which overwhelmingly demonstrates the case for it? Surely, we can show our commitment to unpaid carers by writing into the Bill an in-principle provision to cover the introduction of paid leave once a review of the details is completed. This would be wholly in line with the spirit of the Bill and consistent with the Government’s missions—not least their overriding pursuit of economic growth—while demonstrating support for a group at considerable risk of poverty.

The Government have demonstrated their commitment to carers, with action already taken on carer’s allowance, although its loss for thousands of carers as a result of the planned PIP cuts points in the opposite direction. Therefore, it is all the more important to use this Bill to demonstrate our commitment to carers who are desperately trying to juggle their responsibilities in the labour market and to their loved ones and our recognition of the importance of care to our society.

[Baroness Coffey (Con)]

My Lords, I commend the speeches that have been made, particularly on kinship care, but recognise the challenges that carers face. I am sure that the debate on remuneration for carer’s leave will continue. I am contributing on this group because of Amendment 81, from the noble Lord, Lord Brennan of Canton. I would say that it is quite odd for this to have been grouped alongside the other issues, recognising the very serious situation of pregnancy loss. Before the noble Lord spoke, I was not aware that this was relating to an inquiry at the other end. I have only just started reading aspects of that report, so I am not as fully informed as he was in presenting this. However, there are some issues here that I am concerned about.

Thinking through this, only three other countries in the world include parts of pregnancy loss in terms of being formally considered for bereavement leave. That is not a reason not to do it, but it is important to recognise that we would still be quite a considerable outlier. It needs careful consideration. I am not dismissing it in any way, but I am conscious that the Government responded on 25 March and I am slightly disappointed that we have not yet seen an amendment tabled. I appreciate that some of these things take a bit of time, but I had hoped that in Committee we would be able to consider what the Government were going to table in this regard.

As the Government have set out in their response to the committee and as is set out in ACAS guidance, a number of these issues are already covered in terms of pregnancy or maternity-related illness. I heard what the noble Lord, Lord Brennan, said about this becoming a potential HR issue. It is discriminatory for any such illness in any way, including miscarriage, and molar pregnancy and ectopic pregnancy would be covered very straightforwardly by that.

I have a particular concern about proposed subsection (2B)(a)(iv) in his Amendment 81, which widely casts the net of any medical abortion. It is already recognised that any abortion after 24 weeks is automatically covered in bereavement leave. The same is true of stillbirth, which, in the UK, is considered to be the loss of a pregnancy at 24 weeks and above. The two are not causal or directly related—obviously, there is a correlation in the timing. It just so happens that we have our current abortion limits, with certain exceptions, up to 24 weeks. So I am concerned that, in effect, proactive abortions taken up to 24 weeks would be covered in this amendment. I do not know whether that is the intention of the Government in their response, because, as I have said to the House already, I have not yet had the chance to read the entire report from the Women and Equalities Committee.

On proposed subsection (2B)(b), I say that I have had many friends who have, not always successfully, had children through IVF. Thankfully, many people do, but they recognise when they enter into it some of the challenges they definitely will face in trying to have a child by IVF. As it stands, on average, the success rate for a woman below 38 is about 35% for any particular embryo-transfer loss. Once a woman starts to go over the age of 40, that falls—it has gone up from 2012 from an 8% to a 10% success rate in 2022. That careful consideration needs to be thought about by the Government and your Lordships in this House when we decide to extend certain entitlements, while recognising the heartbreak that can happen at certain moments in people’s lives in these particularly sensitive moments. I am conscious that this is a sensitive issue to bring up at this point in the Bill.

I do believe that I would like to understand this in more detail. I will take the time to do some more research myself, but I am very keen to hear from the Government quite where this is stretching. I appreciate they have given a certain kind of wording to the House of Commons Select Committee on this point, but the provision of further details to the Committee here would be very welcome.

[Lord Fox (LD)]

My Lords, I thank all speakers from your Lordships’ House for what has been an excellent debate. It is a genuine pleasure for me to participate, hopefully quite briefly.

The noble Lord, Lord Brennan, gave a moving speech, which was made more moving by the knowledge that Sarah Owen is at the Bar today, and I thank both of them for their contributions, but especially Sarah.

Amendment 81 has our support, not least as a catalyst to try to have the sort of debate we need and the careful consideration that the noble Baroness, Lady Coffey, also alluded to. I hope it can start to move things forward.

We also support Amendment 134, which was so ably explained by the noble Baroness, Lady Grey-Thompson, and supported by the noble Lord, Lord Hogan-Howe. This again is an important issue that we want to have more conversations about following this debate.

My noble friend Lord Palmer gave a very spirited and strong advocacy for kinship care, and that was supported across the House—here is another area where there is an absolutely clear and present need for carers to be officially brought into the carers’ community.

The point on fostering was also well made by my noble friend, as was the point made by the noble Lord, Lord Young, about short-term fostering as something we should seek to bring into that. All these amendments are, in a sense, broadening the scope of carers and where we should be considering. For all of them, I hope the Minister will be able to stand up and say “Let’s have a debate following this particular group. Let’s talk with interested parties to see how some or all of this could start to be moved forward”.

I hope your Lordships will excuse me if I focus on paid carer’s leave. I had the great honour of piloting Wendy Chamberlain’s Private Member’s Bill through your Lordships’ House with, as the noble Lord, Lord Young, pointed out, the strong support of the Conservative Government. During that time, I had a chance to meet a lot of carers and a lot of employers of carers—big companies such as Centrica, which the noble Lord mentioned, and much smaller companies. They all set out the advantages of having a proper, strong relationship with their carers and the starting point, which we established through that Private Member’s Bill, of unpaid carer’s leave.

21:00

This amendment is an opportunity to take the issue where it should be. I am afraid that the noble Lord, Lord Young, and the noble Baroness, Lady Lister, shot my fox with quotes from the then Opposition—the now Government—on the necessity for paid leave.

Unpaid carers are everywhere across our society. Many people, at some point in their life, will become unpaid carers, whether it is for a family member, a friend or a neighbour. Millions of people do it all the time. It takes many forms—it can be day-to-day physical care such as washing, dressing and feeding people who cannot do it for themselves, and other things such as taking people to medical appointments and helping to deal with the mechanics of life.

Huge pressures faced by the NHS, together with record levels of demand for social care services, have meant that unpaid carers have never been more important in the daily lives of so many people in this country. That is why it was important to get that first Bill on the stocks, as is moving it to the next stage.

We know from the 2021 census that over 2 million people in the UK are juggling work with unpaid care, and that every year more than 1.9 million people in paid employment become unpaid carers. Staying in work while providing unpaid care for a relative or someone else can be incredibly challenging. Those pressures often force hundreds of thousands of people out of work or force them to reduce their hours.

That is why we are proud of Amendment 135, and I am delighted with the support we have had across the Committee. This is the Bill that can deliver paid carer’s leave; this is the Bill that should deliver paid carer’s leave. The Committee has made it clear what it thinks the Government should do in response to Amendment 135.

[Lord Hunt of Wirral (Con)]

I agree with the noble Lord, Lord Fox, whose fox has not been shot.

This has been such an interesting, important, fascinating and deeply moving debate. We owe a debt of gratitude to the noble Lord, Lord Palmer of Childs Hill, for very positively introducing the fact that unpaid carers are the backbone of the care system, and for bringing us up to date with the reality of modern families. I think the Committee has spoken with one voice as we await the reply from the Government Front Bench. Have we not united in saying what we want the Government to do? It will be very interesting to hear the response. I hope they will use every moment between now and Report to be more specific about how they wish to respond to the issues that have been thrown up in this debate.

Like the noble Lord, Lord Palmer, I acknowledge the importance of kinship carers—the grandparents, aunts, uncles, siblings and other close family members who step forward when children need a stable and loving environment. These individuals often take on significant responsibilities with little preparation or support, and they always do so with compassion and commitment. The contribution of kinship carers cannot be overstated. As the noble Lord, Lord Watson of Invergowrie, and the right reverend Prelate the Bishop of Newcastle reminded us, they help prevent children entering the care system. They keep families together, and often do so at great personal and financial cost.

I have to acknowledge the contribution of my noble friend Lord Young of Cookham, who had some wonderful specific quotes to share with the Committee. There is an important strategic alliance here, particularly with the noble Baronesses, Lady Pitkeathley and Lady Lister of Burtersett, and it will be important to respond positively to the points that they have made.

I believe there is a genuine case for us to explore how we might better support those who take on these caring responsibilities in such difficult circumstances. While I appreciate that statutory leave may not be straightforward to implement, especially in the current economic climate, there is room, as the noble Lord, Lord Fox, suggested, for a wider conversation about what more might be done. There should therefore be further consultation on this matter—with kinship carers themselves, with businesses and with the wider public—to understand the practicalities and to gather the necessary evidence. If we can find a solution that is proportionate, workable and rooted in the realities faced by both carers and employers then that will deserve our serious consideration. As the noble Baroness, Lady Smith of Llanfaes, has said, there is room here for a modest move forward that would make a significant contribution.

We have to acknowledge the moving speech of the noble Lord, Lord Brennan of Canton, about bereavement leave. He spoke movingly of his Commons colleague Sarah Owen, MP for Luton North, who has blazed a trail of understanding in some areas that previously have not been properly understood, and we need to respond positively to that.

The noble Baroness, Lady Grey-Thompson, talked about serious childhood illness, pay and leave, supported by the noble Lord, Lord Hogan-Howe. That that is another area where we need to explore how we can better tackle these challenges. In all these areas, I am confident that, through continued dialogue, we can work towards a sustainable strategy.

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

My Lords, this has been another wide-ranging debate and I am grateful for the contributions of all noble Lords. As the noble Lord, Lord Hunt, my opposite number, just said, it has been a moving and profound debate that has demonstrated the complexities of the issues in front of us. There is unanimity across the Committee, I am sure, that we should do as much as we can to support carers. We have to ask ourselves how best we do that. We have picked up the baton from the last Government, who passed the Carer’s Leave Act, and we must move forward on that—but I am getting ahead of myself.

I join the noble Lord, Lord Hunt, in paying tribute to the noble Lord, Lord Palmer of Childs Hill, and the noble Baroness, Lady Grey-Thompson, for putting the issue of kinship care in front of us, tabling Amendments 77, 78, 79, 134, 135 and 144. I also thank my noble friend Lord Brennan of Canton for tabling Amendment 81. I will do my best to get through these amendments at a decent pace.

I will begin with kinship care, speaking to Amendments 78 and 79, tabled by the noble Lord, Lord Palmer. I join others in emphasising how greatly I and the Government appreciate kinship carers, who generously step into the breach and offer loving homes for children who cannot live with their parents. I am sure that the whole House shares these sentiments.

I reassure noble Lords that the Government are committed to ensuring that all employed parents and carers receive the support they need to manage both their work and their family lives. As we have heard, Amendment 78 aims to establish a new “kinship care leave” entitlement for employed kinship carers. Amendment 79 then seeks to creates a legal definition of “kinship care” to be used to establish eligibility for kinship care leave.

The right reverend Prelate the Bishop of Newcastle, my noble friend Lord Watson of Invergowrie and, indeed, the noble Lord, Lord Palmer, himself, rightly talked about the amazing work done by kinship carers across the country, supporting children in times of greatest stress and need, in their own households, and in so doing relieving local authorities and the wider care system.

The Government recognise that the current support for working families needs improvement. We have already begun work to improve the system for kinship carers. We are defining kinship care through other legislation that is currently before this House, and later this year we will begin trialling a kinship allowance in several local authorities.

We are pleased to say that, for the first time, through the Government’s Children’s Wellbeing and Schools Bill, we will create a legal definition of kinship care for the purposes of specific duties within that Bill: the requirement to provide information about services to kinship families, and the duty to promote the educational achievement of children in kinship care. This will help to ensure that all local authorities interpret and apply the definition uniformly in relation to the new duty to publish information required, reducing ambiguity and potential disparities in information provided about support by different local authorities. This will, we hope, make life much easier at the sharp end of providing kinship care. It is a vital part of our commitment to keeping families together and supporting children to achieve and thrive.

I am also very pleased to say that the Government have recently announced a £40 million package to trial a new kinship allowance. This is the single biggest investment made by any Government in kinship care to date; indeed, it is the first of its kind. This financial commitment could transform the lives of vulnerable children who can no longer live at home. It would enable children to be raised within their extended families and communities. As we heard from the noble Lord, Lord Palmer, and others, it would minimise disruption to their formative years, allowing them to focus on schooling and building friendships—in short, having a normal life, as we want for all our children.

In addition, qualifying employed kinship carers may already benefit from various workplace rights aimed at supporting employees in managing work alongside caring responsibilities. These include a day one right to time off for dependants, which grants a reasonable amount of unpaid leave to deal with unexpected emergencies involving a child or dependant; the right to request flexible working; and unpaid parental leave, which, through this Bill, we are making a day one right.

Employees may not automatically have parental responsibility as a result of being a kinship carer, but they can acquire parental responsibility through different legal methods such as a special guardianship order. The Government have also committed to a review of the parental leave system to ensure that it best supports all working families. This review will be conducted separately from the Employment Rights Bill, and work is already under way on planning for its delivery.

Amendment 77 would provide foster carers with one week of leave every 12 months. As we have heard, foster carers play a life-changing role in the lives of children who need a safe and supportive environment. At times when young people are facing significant challenges, foster parents offer not only care and security but emotional support and consistency. I pay tribute to all those who step forward to provide the essential service of foster-caring—not least, as we have heard, the noble Lord, Lord Young of Cookham, who has now changed his place but is very much with us in the Chair.

It is important to highlight that a range of workplace rights already exists to help employees who take on the responsibilities of fostering. From their first day on the job, employees have the legal right to take unpaid time off in emergency situations involving their dependents. This enables them to respond swiftly to sudden issues, such as arranging care for a foster child. If a foster carer is looking after a child with a long-term illness or disability, they are entitled to carer’s leave. This provides them with up to a week of unpaid leave in a 12-month period, to manage healthcare needs or attend appointments. Those fostering with the intention of adopting may be eligible for paid adoption leave, provided they meet the necessary criteria. In addition, all employees are entitled to submit a request for flexible working arrangements from day one of their employment. Given that these existing provisions go a long way to help foster carers to balance work and their foster care responsibilities, it does not seem right to add a new entitlement without a proper assessment of the need for it and the impact it might have.

21:15

[Lord Watson of Invergowrie (Lab)]

I appreciate what the Minister has said. If I heard him correctly, he said it would not be appropriate to introduce this leave without undertaking an assessment of how it would be applied. Will such an assessment be undertaken? I think it is important.

[Lord Katz (Lab)]

I am very happy to write to my noble friend with more details. We will cover some of the issues on carer’s leave in the round later in my speech, but I thank him for his intervention.

[Lord Fox (LD)]

With all due respect, this Bill is full of situations in which the consultation for its implementation is yet to be completed. Having adopted a principle in primary legislation, one more consultation would hardly stain the integrity of this Bill. If the Government wanted to, they could very well take on kinship care and fill in the details later—that is what they are doing with the rest of the Bill.

[Lord Katz (Lab)]

We may be talking at cross purposes. I am very happy to write with more details of the way that we plan to take foster care forward.

On paid carer’s leave, Amendment 135 would introduce a statutory entitlement for unpaid carers to receive their usual wage while taking carer’s leave. As drafted, the responsibility for covering these costs would lie with the employer. At Second Reading, and this evening, the noble Lords, Lord Palmer and Lord Young of Cookham, spoke powerfully on the vital role played by unpaid carers. I pay tribute to my noble friend Lady Pitkeathley for all the work she has done on fighting for carers, and to the noble Baroness, Lady Smith of Llanfaes, for speaking about her direct experience of caring. As my noble friend Lady Lister remarked, it is this sort of lived experience that brings so much to our House’s considerations of these matters.

I emphasise that the Government are committed to supporting those who combine work with care. However, there are not insignificant concerns with the amendment, which has not been changed since it was first brought forward in the other place. It does not give due consideration to the potentially significant costs it may place on businesses—particularly small businesses. It would create a situation of differential treatment between those taking leave to care for a family member or loved one under the Carer’s Leave Act and those taking other forms of leave, such as maternity and paternity leave. Those taking carer’s leave would be paid their normal wage, while other forms of leave are paid at a statutory rate, meaning that unpaid carers would be treated more favourably.

Although the Government do not support this amendment for these reasons, I assure noble Lords that His Majesty’s Government is fully committed to ensuring that unpaid carers can combine work with their caring responsibilities. We are reviewing the Carer’s Leave Act, which was introduced in April 2024 and gave employed carers a new right to time off work. We have heard tonight, as the noble Lord, Lord Fox, expressed, the depths of feeling and concern that this is done properly. We have had the baton of the Carer’s Leave Act passed over; we want to make sure that we get this right, hence the review that we are undertaking.

[Baroness Lister of Burtersett (Lab)]

I quite take my noble friend’s point, but we were not saying how it should be paid; we were asking for an acknowledgement of the principle that it should be paid and leaving it up to the Government to then review the details of how it should be paid. It would be good to have at least an acknowledgement that that is where the Government are heading.

[Lord Katz (Lab)]

I fear I may disappoint my noble friend slightly, but it is important that, if we are going to review these things, we review them in the round, and that I do not pre-empt that review at the Dispatch Box tonight. We are considering whether further support is needed, including potential options for paid leave, while being mindful of potential impacts on businesses.

It would be worth spending a little more time discussing the review, as several noble Lords have now asked about it. The review is under way and officials in the Department for Business and Trade have already spoken to over 70 employers, third sector organisations and charities, such as Carers UK, in the course of undertaking the report. We have held events across the UK, in Wales, England and Scotland, and this engagement will continue as the review progresses, alongside both qualitative and quantitative research.

I will answer a couple of direct questions on the review. To answer the noble Baroness, Lady Coffey, we will be considering international examples. To answer the noble Lord, Lord Young of Cookham, we will be taking into account the immigration White Paper, which he so keenly observed has just been published. The review will assess the impact of unpaid carer’s leave, introduced last year, while considering whether further support is needed, including potential options for paid leave, while being mindful of any potential impacts on businesses.

To respond again to my noble friend Lady Lister, we do not want to pre-empt the outcome of the review. We must allow it to run its course, to ensure that we make a considered, evidence-based decision about what further support would most benefit unpaid carers.

As time is running on, I will speak to Amendment 134. I begin by thanking the noble Baroness, Lady Grey-Thompson, and the noble Lord, Lord Hogan-Howe, for bringing attention to this issue. I pay particular tribute to the work done by the charity It’s Never You, which worked with the noble Baroness on this amendment. I join her in paying tribute to Ceri and Frances Menai-Davis, who have so bravely and tirelessly campaigned in memory of their son, Hugh. I am so pleased that they could join us in the Committee to understand how seriously the whole House takes the issue they have raised—it gives us the opportunity to thank them again for their hard work on the issue.

This amendment would extend provisions on neonatal care leave and pay to the parents of all children up to the age of 16 who are seriously ill for an extended period of time, entitling parents to paid time off work at the rate of statutory neonatal care pay. As I have said, this is a very important issue, and I wholly acknowledge how incredibly difficult childhood illness can be for parents. Equally, I recognise the vital role played by parents and other family members who provide care in such circumstances. The importance of being able to spend time by the bedside of a loved one who is unwell cannot be overstated.

To respond directly to the noble Baroness, Lady Grey-Thompson, the Government are reviewing the existing entitlement to carer’s leave, as I have already mentioned, and considering whether further changes may be helpful in supporting those who provide care to loved ones alongside work. For instance, employers are able to offer enhanced parental leave beyond the four-week limit in a year, and we encourage employers to consider doing this in unusual circumstances, such as a child becoming seriously ill. It is important that parents of disabled children are supported to return to or remain in work, if this is what they choose to do. Parents of disabled or seriously ill children may be protected from employment discrimination, by association with a disabled person, under the Equality Act 2010. These may well be more appropriate avenues through which to consider the issue.

While I am afraid that the Government cannot support the amendment at the present time, I understand that officials in the Department for Business and Trade have extended an invitation to the It’s Never You campaign to further discuss its proposals as part of the ongoing review of carer’s leave. I hope that noble Lords take that as a promissory note of how seriously we take the issue. I certainly hope that the Menai-Davises will be able to contribute their valuable perspective on this ongoing piece of work.

Amendment 144, on carers and equality action plans, would require employers to consider caring as a matter related to gender equality within any equality action plans, with reference to Clause 31 of the Bill. I thank the noble Lord, Lord Palmer, for drawing attention to the disproportionate impact that is felt by women when it comes to providing unpaid care, and particularly women in the workplace. This is undoubtedly a very important issue.

The provision in the Bill is designed to emphasise gender equality issues, but this amendment risks inadvertently strengthening existing assumptions about who provides care within our homes, families and society. The clause as it stands can already accommodate consideration of the needs of carers. We want to ensure that a variety of actions can be taken to support employees in a range of circumstances, so we fully expect action plans to consider those with caring responsibilities. Action plans are a vital step in supporting employers to make progress on closing the gender pay gap. Acknowledging the needs of those who provide unpaid care will no doubt play an important role in this, given that it is a significant contributing factor to the gap.

Finally, I will speak to Amendment 81, tabled by my noble friend Lord Brennan of Canton. I think the whole House was moved by his words on the issue. He calls himself a vessel, but he was certainly no empty vessel—if he will excuse my rather poor pun for this time of night. The amendment would extend the scope of bereavement leave to include pregnancy loss before 24 weeks. It would apply to those who experience miscarriage, ectopic pregnancy, a molar pregnancy, a medical termination or an unsuccessful attempt at IVF due to embryo-transfer loss.

The loss of a baby at any stage is incredibly sad and difficult. As my noble friend Lord Brennan said, it is not a disease or an illness. The Government acknowledge that there is a clear gap in support for those who suffer a pregnancy loss before 24 weeks and that there is a need for time to grieve and recover, which, as many noble Lords from around the Committee recognised, was so helpfully highlighted by the work of the Women and Equalities Committee. It would be most remiss of me now not to join my noble friend Lord Brennan and indeed other noble Lords in paying tribute to the work of the committee, and in particular of my friend and comrade Sarah Owen, who has so movingly told of her own experience and has thought about the wider piece around this important and sensitive issue. We appreciate the way in which the committee has brought this issue forward.

We fully accept the principle of bereavement leave for pregnancy loss, as raised in the amendment, and we look forward to further discussions with my noble friend and other noble Lords as the Bill continues in this House. As my noble friend Lord Brennan said, this can help bring a more compassionate and humane face to the workplace as people deal with events that, frankly, at this current point in time, carry far too much stigma, secrecy and basic misconception of the facts.

[Lord Brennan of Canton (Lab)]

Can my noble friend the Minister confirm that the meaning of his words is that it is the intention of the Government to bring forward amendments that he is about to get to on Report in this regard?

[Lord Katz (Lab)]

It will not come as a surprise to my noble friend that we cannot accept the amendment in front of us today. However, I am very happy to work with him to ensure that your Lordships’ House can consider this most important issue again on Report. So I respectfully ask him not to move this amendment and ask that the noble Lord withdraws his amendment.

[Lord Palmer of Childs Hill (LD)]

I feel humbled by this debate. It started off for me with the noble Lord, Lord Watson of Invergowrie, and the right reverend Prelate and it went on in the same vein, right across the House: the feeling that there was this Bill, the Employment Rights Bill, and that we recognise that within employment rights there are carers who have been ignored and need to be paid for what they are doing, for people and for the system that they underwrite.

The Government have not really replied in positive enough terms on this, but we will come back to this on Report with specific amendments. By that time, I hope that Government Ministers will go back to their colleagues in the other place and say that across the House, from all parts of this House, there was a feeling that unpaid carers need to be recognised in the Employment Rights Bill, and that kinship carers, who have not been recognised before, need to be recognised. We hope the Government have heard this and we look forward to a positive response by Report. I beg leave to withdraw my amendment.

Amendment 77 withdrawn.

Amendments 78 to 80 not moved.

Clause 18: Bereavement leave

Amendment 81 not moved.

Clause 18 agreed.

21:30

Amendment 82

Moved by

[Lord Hogan-Howe]

82: After Clause 18, insert the following new Clause—
“Special constables: right to time off for public duties(1) The Employment Rights Act 1996 is amended is follows. (2) In section 50 (Right to time off for public duties), after subsection (1) insert—“(1A) An employer shall permit an employee who is a special constable, appointed in accordance with section 27 of the Police Act 1996, section 9 of the Police and Fire Reform (Scotland) Act 2012 or section 25 of the Railways and Transport Safety Act 2003, to take time off during the employee’s working hours for the purpose of performing their duties.(1B) In section (1A), “duties” means any activity under the direction of a chief officer of police.””Member's explanatory statement
This new clause gives employees who are special constables the right to time off to carry out their police duties.

[Lord Hogan-Howe (CB)]

My Lords, my amendment is supported by the noble Lords, Lord Paddick and Lord Evans, for which I am grateful. The amendment seeks to add special constables to the group of people in the criminal justice system who have the right to time off to fulfil their duties.

In 2018, Section 50 of the Employment Act was amended to include lay observers in prisons and members of immigration visiting committees for immigration centres and short-term holding facilities among those, such as magistrates and JPs, who have the right to take time off from their employment. Of course, each of those groups of volunteers is essential to the effective functioning of the criminal justice system, and so are special constables, who have existed since being created by the Special Constables Act 1831, although today’s version was really created by the Police Act 1964.

Special constables are special by name and special by nature, in my view. They are unpaid volunteers who have all the powers of a regular constable and take all the risks that their colleagues take, too, of being stabbed, assaulted and people abusing or spitting at them. They are paid expenses, but of course this covers only their outgoings and they make no profit. They deal with issues such as suicides, terrible road traffic collisions and many other things that regular officers have to deal with, but these are volunteers. After being trained, they are usually expected to be on duty for at least four hours a month. Most do very much more than that; some work every weekend. During breaks in employment, they often work almost full-time hours. Some work at this for over 20 years.

Special constables were designed to be a contingency for war, backfilling the police officers who would be expected to join the Armed Forces. Given many of the uncertainties in the world at the moment, it is not unrealistic to expect that we may call on them in the foreseeable future.

Special constables are a visible representation of community policing, giving of themselves without payment to stop crime and keep order. For me, they have always been a way to have the community in the police station, holding their regular colleagues to account and not captured by the prevalent police culture of the time—almost a pre-body-worn video system before that was even thought about. Some 25% of them go on to become regular officers, so it is not a bad recruiting route and not a bad way for them to test whether they would like to be a police officer or whether police officers think that they are going to be suitable full-time colleagues in future.

At present, the numbers of special constables are dropping quite dramatically. In September 2023, there were 6,330 in England and Wales, but by September the following year there were only 5,818. That is just one-third of the figure it was 10 years ago.

In this context, on the grounds of equity with other volunteers in the criminal justice system, surely we need to enhance the volunteer offer to encourage recruitment, retention and diversity. The Government have said that they want strategically to boost neighbourhood policing, with around 13,000 more officers and PCSOs in the coming years. Surely that priority alone demands that special constables—the most visible of community-based policing—have a priority in recruitment. This amendment would assist in that process.

No doubt the Government may say that this should not be approached in a piecemeal way and that they will make announcements when they say more about neighbourhood policing. Many of those announcements have been made, and this opportunity has been missed, I would say.

Some may say that this is a burden on small businesses, but I do not accept that. The Section 50 right for volunteers has a reasonableness clause in it, so a business of three people may struggle to give any time off, whereas a business employing 10,000 people may have far more flexibility. For example, it is not reasonable for an employee to consistently take time off when the business is particularly busy and needs them.

To be fair, those people come back to work better trained, confident and rounded individuals. As I said earlier, they have had a few new experiences of life—some good and some not so good. The Government may say that, if we do that for this group of volunteers, we may have to do it for others, and we may need to consider that as a whole. I do not accept that either; this reform is long overdue and is supported by the National Police Chiefs’ Council and the specials’ own representative body, the Association of Special Constabulary Officers.

There is a huge gap in recruitment and retention, and that problem is now and the time to deal with it is now. This is a great opportunity to assist what is a special group of people whom we probably have all taken for granted for too long. The Government have an opportunity in this Bill to do something to help, and which will cost nothing.

[Lord Paddick (Non-Afl)]

My Lords, I rise to support Amendment 82 in the name of my friend and former colleague, the noble Lord Hogan-Howe, which I have signed. I declare an interest as a paid non-executive adviser to the Metropolitan Police Service. I apologise that I was unable to speak at Second Reading, but I intend to focus in a disciplined way on the amendment, unlike some colleagues.

In London, the Metropolitan Police, the UK’s largest police force, has, in recent years, been unable to recruit police officers to the level it has been funded for, and is now unable to recruit full-time regular police officers because of budget constraints. The Labour Government’s community policing guarantee, to recruit 13,000 more neighbourhood police and Police Community Support Officers, appears to be challenging, given that the Metropolitan Police accounts for about 19% of all UK police officers and about 25% of the UK police budget.

One low-cost way to recruit more community police officers is to take a no-cost-to-the-taxpayer measure to encourage members of the public to become special constables, such as that proposed in the noble Lord’s amendment. As of March 2023, the contribution of special constables was saving an estimated £85 million to £90 million a year in policing delivery, according to government statistics.

The Minister may well say, as Ministers are prone to do—for example, on the issue of humanist weddings—that while they agree in principle with the amendment it needs to be part of a holistic approach to volunteering generally; that the Government will consider this and bring forward such legislation in due course, if necessary; but that they do not want to create an uneven playing field. However, if they intend to meet the 13,000 uplift in community police officers, they need to create an uneven playing field, providing more of an incentive for the public to volunteer to be special constables than to be any other sort of volunteer.

In any event, the playing field is already uneven, as the noble Lord, Lord Hogan-Howe, has just said, in that in 2018 the Government—albeit a different Government—amended Section 50 of the Employment Rights Act 1996 to include four groups of volunteers in another part of the criminal justice system, such as independent prison monitors. The reason was to attract applicants in full-time employment, who tend to be younger, and thereby improve the diversity of these volunteers, who tended to be skewed in favour of older age groups.

Not only do the police need fit, younger people to volunteer to be special constables but, particularly in London, they need local volunteers who know and reflect the diversity of the communities in which they will serve. The proportion of special constables from minority backgrounds currently serving is higher than it is among regular full-time police officers, and with the added incentive that this amendment would provide, we have the prospect of recruiting more ideal volunteers, who know and reflect their local communities, as special constables.

Were these not good enough reasons to support this amendment, given the current issues around police culture—highlighted by the noble Baroness, Lady Casey of Blackstock, in her report on the cultural issues facing the Metropolitan Police—recruiting more officers from minority backgrounds, working part-time and hence less influenced by existing negative aspects of police culture, would assist in changing those undesirable aspects of police culture and increase public trust and confidence. Not only would the public see more police officers who look like them; they may recognise them as members of their local community.

The special constabulary has also proved to be a fertile recruiting ground for the full-time regular force, as the noble Lord, Lord Hogan-Howe, has just said, providing an opportunity for those from minority backgrounds in particular to try out policing before making a full-time commitment to it. Recruiting more volunteer special constables could also lead to improving the diversity and local representation among the full-time regular police force.

As with the changes made in 2018 to the 1996 Act, there are compelling reasons to extend Section 50 of the current Employment Rights Act to special constables, and I enthusiastically support this amendment.

[Lord Fox (LD)]

My Lords, we could hardly have expected two more expert speakers to propose this amendment. This is another case where society is getting something on the cheap and, even though it is a different argument from the one about unpaid carers, it is another way where, in fact, we are not recognising the value that society is getting from these people who work as special police officers.

I really want to hear what the Government say on this and I hope it is not the sort of answer that my friend, the noble Lord, Lord Paddick, suggested it might be but is something rather more constructive that can come forward the next time this Bill comes up.

[Lord Sharpe of Epsom (Con)]

My Lords, I would very much like to thank the noble Lord, Lord Hogan-Howe, for his important amendment in this group and for the valuable context he gave in his opening remarks, and the noble Lord, Lord Paddick, for speaking so eloquently to it as well.

They are both right. Special constables play a vital role in our communities and, as they pointed out, they serve alongside other police officers, offering their time and their skills to protect the public and contribute to the safety and well-being of society at large. As the noble Lord, Lord Fox, has just pointed out, society benefits from their work.

It is often overlooked, though. For many, being a special constable is something they do alongside other regular employment. These individuals are already balancing their professional lives with the demands of policing and, as has been pointed out, that can be both challenging and rewarding.

I could bore on for hours about how valuable special constables were when I was policing in Hong Kong—but I will not. I welcome this amendment and believe it represents a small but significant way to better support those who give their time to serve our communities by ensuring that special constables can fulfil their duties without facing conflicts with their employment obligations. We would be sending a strong message of support for public service generally, as well, of course, as for special constables. So we are very minded to support this amendment.

[Lord Katz (Lab)]

My Lords, this has been an interesting debate—some might say “esoteric”, but not me— and indeed, thankfully, a slightly shorter one. I thank the noble Lord, Lord Hogan-Howe, for tabling Amendment 82, co-signed by the noble Lords, Lord Paddick and Lord Evans of Rainow. I am also grateful to the noble Lords, Lord Hogan-Howe and Lord Paddick, for meeting me, the Minister and the noble Lord, Lord Leong, earlier today to discuss this amendment. It was really helpful to have the opportunity to, as we heard from both noble Lords this evening, hear the background context to the work of special constables, how they are regarded within the force and how they are integrated within the forces in which they serve.

Amendment 82 would give employees who are special constables a statutory right to time off from work to carry out their voluntary police duties. This Government recognise, as I think we all do across the House, and really value the important role that special constables play in our communities, and we are committed to ensuring that they are supported to navigate those responsibilities that they carry out as special constables alongside their working life.

Special constables, along with the full range of police volunteers, bring valuable and diverse skills, which complement the roles that full-time officers and staff play in delivering the best possible service to the public in protecting our streets and making sure that our communities are safe.

21:45

The noble Lords are right to raise the issue. The entitlement to time off for public duties has existed for almost half a century, and it may well be time to consider whether updates are needed to reflect changes in our public services. Indeed, alongside special constables, there are other roles—such as on-call firefighters, St John Ambulance volunteers, RNLI voluntary lifeguards and police support volunteers—who have structured training and a formal public service responsibility and are not currently recognised under law. Noble Lords might agree that it would be slightly, if unintendedly, invidious to create a false division between the role of special constables and those other roles that exist in society. I think many people out in the streets would say, “Actually, they all do really good jobs”. We are all really grateful for the opportunity that they take to serve the public and protect and safeguard us in different ways.

However, I am acutely conscious that the changes to this entitlement may have broader implications for employers at a time when key regulatory reforms are under way through the Employment Rights Bill. At this stage, no assessment has been provided as to the number of people who might take up the leave entitlement. Introducing this entitlement without considering the impact on businesses and the potential number of employees who might need to take leave could lead to unforeseen and unmitigated challenges. Unfortunately, the amendment does not adequately evaluate these factors to ensure that any changes are sustainable and do not place undue burdens on employers.

The noble Lords, Lord Hogan-Howe and Lord Paddick, were rightly concerned about the number of special constables and how we can best increase it. Indeed, the Government recognise that there was a fall in the number of special constables over recent years under the previous Government. However, the evidence suggests that a range of factors could be contributing to the recent fall in applications for special constables—in short, it could be demand side and supply side. It is not clear at this stage whether this amendment would contribute to reversing the fall in numbers or, as I have said, what impact it would have on businesses.

However, to reassure the noble Lords, the Government are advancing a range of initiatives aimed at strengthening the special constabulary, in particular bolstering neighbourhood policing through improving diversity, as we have heard, embedding community policing in the communities—because so many of the special constables live in the communities that they help police—and creating pathways for long-term recruitment into formal police forces. As we have heard from the noble Lord, Lord Hogan-Howe, one in four special constables goes on to be full-time police men and women. We are introducing a neighbourhood policing guarantee, which will deploy thousands of additional police officers, police community support officers and special constables to our streets. This initiative aims to restore patrols in town centres across the country—and, indeed, our cities—thus enhancing community safety and security.

In addition, the employer supported policing scheme, led by the National Police Chiefs’ Council, has seen numerous organisations across various sectors commit to supporting their employees in serving as special constables. This initiative recognises the valuable opportunities that volunteering with the police provides for individuals to develop new skills and contribute to their local communities. The Home Office is collaborating with the NPCC to enhance the recruitment and retention of special constables. This effort includes the creation of a refreshed national citizens in policing strategy and the establishment of a national special constabulary working group.

In short, I hope that noble Lords will see from that quick canter through what the Government as a whole are doing that, although the Employment Rights Bill might not provide the satisfaction that the noble Lords, Lord Hogan-Howe and Lord Paddick, wish to see, it is certainly not the case that nothing is happening on the special constable front. In the light of this, and with the assurances that I have given the noble Lords, I hope that the noble Lord, Lord Hogan-Howe, feels able to withdraw his amendment.

[Lord Hogan-Howe (CB)]

My Lords, I thank the noble Lord, Lord Katz, and his colleagues for providing the meeting earlier for me and the noble Lord, Lord Paddick, and for the time they took, on a long Bill with many amendments, to spend some time with us. We both appreciated it.

The Minister just said—he realised that I possibly might not agree—that it was invidious to draw distinctions between volunteers, but that is what happened with the employment Act in 2018, which distinguished between prison visitors and immigration. I see no reason why it cannot happen again, in principle. It does not seem to be a real problem.

The Minister said that it is hard to establish how many people might use this right. However, we know that it is no more than about 5,000 people—there are so few of them—in a workforce of about 26 million, so it is not going to cause a massive disruption to employers and employees.

On the voluntary arrangement with the NPCC whereby employers voluntarily give time off, the Minister will know that a survey established that about two-thirds of those who tried to use that scheme were unable to access it because their employers denied them that opportunity. That probably means that this right is particularly needed at the moment.

Finally, although I was not aware of the Hong Kong example—which I guess has a little of the British tradition—there are not many, if any, places in the world where a police officer can be a volunteer and take all the risks and have all the powers. It is a unique thing in the UK. If you talk to officers from Australia or America, they say, “Let’s get this right: they pay them nothing and they take people on and try to arrest them?” They cannot believe it. It is a rare thing we have, and it would be a shame to lose it, but we are in the process of losing it. All that said, of course I am prepared, at this stage, to withdraw my amendment.

Amendment 82 withdrawn.

House resumed.

House adjourned at 9.51 pm.