Retirement of a Member: Viscount Waverley
The Lord Speaker (Lord McFall of Alcluith)
My Lords, I should like to notify the House of the retirement, with effect from 23 June, of the noble Viscount, Lord Waverley, pursuant to Section 1 of the House of Lords Reform Act 2014. On behalf of the House, I thank the noble Viscount for his service to the House.
Arrangement of Business
Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)
My Lords, there have been many cases in recent weeks of noble Lords, during Oral Questions, referring generally to their interests as set out in the register. I want to highlight to colleagues that this is now the incorrect procedure. Following recent changes to the Code of Conduct, noble Lords must now declare financial interests in a specific way. This applies to all types of business, including Oral Questions.
Simply referring to interests as set out in the register is no longer sufficient. For example, if, hypothetically, I am the chief executive of a housing association and I am asking a question about building new social homes, previously when asking that question, I could have said, “I refer the House to my interests as set out in the register”. Now, I would have to say, “My Lords, I declare an interest as the chief executive of X housing association”.
The House authorities helpfully highlighted these changes again to Members in communications issued this week. This change was agreed by the House in March and came into effect in April. I remind all noble Lords of the importance of observing these new rules.
Music and Dance Scheme
(1 day, 16 hours ago)
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Baroness Keeley
To ask His Majesty’s Government whether they will continue to invest in the Music and Dance Scheme, including in the National Dance Centres for Advanced Training programme, to support dance careers for young people from deprived backgrounds.
The Minister of State, Department for Education (Baroness Smith of Malvern) (Lab)
My Lords, improved access to the arts is important for all young people, which is why the Government are committed to continuing to fund the music and dance scheme, including the centres for advanced training, in the academic year 2025-26. The bursary support will continue for the more than 2,000 students benefiting from it, and at the same rate. It will remain means tested, so that it is targeted towards supporting students from lower-income families.
Baroness Keeley (Lab)
I thank my noble friend the Minister for her reply. I, too, welcome that DfE has confirmed the continued funding for bursaries, at least for 2025-26. However, there is no commitment beyond 2026 and DfE did cut the outreach funding for the schemes earlier this year. Can my noble friend tell me what steps the Government will take to ensure that young people from rural or economically disadvantaged areas continue to have equal access to dance training, given that short-term funding cycles create instability in delivery, and that outreach funding has already been cut?
Baroness Smith of Malvern (Lab)
The Government will launch a new centre for arts and music education to take forward the ambitions, which my noble friend rightly asks of us, for improved and more equitable arts education in state-funded schools, including a focus on dance. The music and dance scheme is a long-standing programme and the department will consider future funding in due course. Tough decisions have had to be made to get our finances back under control, including, as my noble friend identifies, on additional funding that was made available to dance outreach. Nevertheless, all eligible MDS students for dance have continued to receive bursaries.
Baroness Bull (CB)
My Lords, I welcome the Government’s continued support of MDS and the national centres, and the recognition of their vital role in opening up dance careers to diverse talent. However, does the Minister share my concern that too many children will never know whether they have a talent for dance? Despite dance being a statutory part of the national curriculum, one-third of primary schools are reported not to teach it, and its place within PE means that teachers often do not have the confidence or skill set to deliver that teaching. What steps are the Government taking to improve the place of dance teaching within schools, and will they consider a national plan for dance education or a model dance curriculum, akin to those that exist for music?
Baroness Smith of Malvern (Lab)
The noble Baroness is right that dance is part of the national curriculum for PE, which is part of the entitlement for children in all the first three key stages. I recognise her point about ensuring not only that it exists in the curriculum but that it is of high quality as well. I will bear in mind her point about how we can ensure, as we recruit additional teachers into our schools, that we have the specialist teachers with expertise in dance to be able to deliver it.
Lord Blackwell (Con)
My Lords, I declare an interest as a governor of a specialist music school. As the Minister will be aware, the MDS covers music schools as well as dance schemes. Is she aware of the uncertainty and damage caused to parents trying to decide whether they can send their children to these schools, as well as the threat to the viability of these schools, if there is no certainty about future funding? When she talks about a new centre, could she clarify whether this is being considered as an alternative to the MDS? The MDS is vital to the future of many of these very specialist but highly prized schools.
Baroness Smith of Malvern (Lab)
I hope the noble Lord recognises that I recognise the contribution the MDS makes, and particularly the way it enables children who otherwise would not be able to afford this type of education to afford it. As I pointed out, it is longstanding and the Government have made a commitment to it this year, including to the bursaries that are necessary for those young people to benefit from it. We will make further announcements about this in the future. Sadly, given the way that funding decisions and budget planning go, it is not that unusual for there not to be a longer-term commitment to something. But, so far, the Government’s commitment to this has been right and appropriate, given the contribution that it makes.
Lord Addington (LD)
My Lords, will the Government take the opportunity to let us know whether they will at least upgrade the grants they are talking about in future? If you leave them stationary, they will very rapidly become token gestures. Can the Government represent their long-term planning by saying they will upgrade the support they are giving to people on this particular scheme?
Baroness Smith of Malvern (Lab)
The Government have maintained a commitment to providing generous support to help students to access the specialist music and dance education and training that this scheme funds, committing £36 million for this academic year. That means that all families below average relevant income of £45,000 per annum will continue to benefit from additional financial support in the next academic year. The Government were able to upgrade the contribution made through the music and dance scheme bursary, for example to ensure that all families were unaffected financially by the VAT change in January 2025. I think the noble Lord is trying a different way to get me to commit future funding to this scheme, at a point at which, as I have already identified, it is not possible for me to do so.
Baroness Caine of Kentish Town (Lab)
My Lords, now that we hear the good news that the Government have agreed to extend bursary funding for the music and dance scheme, including the National Centres for Advanced Training in Dance programme, will the Minister be able to help facilitate an open dialogue with these providers to ensure that there is a strong voice for dance education in informing decision-making, including going forward, and the new national arts and music centre that my noble friend referred to, enabling providers to shape a programme based on expertise and the rich data they hold?
Baroness Smith of Malvern (Lab)
My noble friend makes an important point. There is an enormous amount of expertise in the schools supported by the music and dance scheme, as there is in other parts of the system. The priority here has to be to bring in as many different organisations and voices as possible, in order to design the national centre for arts and music in a way that delivers the objective of broader and more equitable access to arts education in state-funded schools. That will need lots of voices, lots of contribution, and of course the ambition that the Government have already put into it.
The Earl of Effingham (Con)
My Lords, please allow me to quote the noble Baroness, Lady Longfield, in her role as executive chair of the Centre for Young Lives:
“Creativity and the expressive arts should be part and parcel of every child’s education from primary school”.
Please also allow me to quote the Prime Minister:
“Every young person should have access to music, art, design and drama. That is our mission”.
Perhaps the Minister can help us understand why Ed Sheeran, backed by Elton John, Eric Clapton and hundreds of other artists, wrote to the Prime Minister just three months ago to say:
“The time to act is now. State schools … have seen a … decrease in music provision … How many more venues need to close, how many music programs need to be cut before we realise that we can’t just celebrate success, we have to protect the foundations that make it?”
Baroness Smith of Malvern (Lab)
Well, I do agree with the words of my noble friend Lady Longfield. I am sure that she, like me, is dismayed at, for example, the big fall-off in young people able to take GCSEs in those subjects over the period of time that the noble Lord was in government, and that she is dismayed about, as the noble Baroness said, the numbers of teachers that we are losing in this particular area. This Government have a commitment, not only through the national centre for arts and music education but through our investment in our schools and teachers, and our commitment to a new national curriculum available for all schools, and an entitlement for all children. I only wish the last Government had been as committed.
The Earl of Clancarty (CB)
My Lords, further to the question from my noble friend Lady Bull, how is the overall effectiveness of the music and dance scheme assessed? Clearly it is a great scheme, but is it possible that there are talented students who need support who may still be missing out, and, if so, how might this be assessed and rectified?
Baroness Smith of Malvern (Lab)
The music and dance scheme has a particular function to play in enabling very talented young people who would not otherwise be able to access the really excellent education provided by the schools in this scheme. But it would therefore be right to say that, of course, there will always potentially be other children and young people who could have benefited from this type of education. That is why we need a broader approach, as is manifest through the proposal for the national centre for arts and music education, to ensure that we are widening the opportunities for all young people to get to that position of excellence where they can benefit from the music and dance scheme.
Baby Foods: Nutrition and Marketing
Baroness Hughes of Stretford
To ask His Majesty’s Government what plans they have to improve nutritional and marketing standards for baby foods.
Baroness in Waiting/Government Whip (Baroness Blake of Leeds) (Lab)
My Lords, foods for infants and young children must meet regulations on nutrition, composition and labelling standards. We expect industry to improve nutritional content and labelling of baby foods, including taking voluntary action to align products with dietary guidelines and best practice. This Government are committed to raising the healthiest generation of children, which is why we are investing £57 million in Start for Life services to improve infant health and feeding, and to provide support to parents.
Baroness Hughes of Stretford (Lab)
I thank my noble friend for her Answer. In response to mounting evidence of and concern about the poor nutritional and high sugar content in commercial baby foods, despite their being marketed as a healthy substitute for home-cooked food, the NHS has issued new guidance advising parents not to use these products every day, but only occasionally, if at all. Given that the crucial development in infancy depends on the best possible nutrition, that it is in these early years that lifelong eating habits and tastes can become entrenched, and in view of the escalating crisis in childhood obesity, will the Government now regulate what is sold as baby food and how it is marketed to parents?
Baroness Blake of Leeds (Lab)
I share my noble friend’s views and concerns, and I recognise that the current situation is not good enough. Current regulations set nutritional standards, and we continue to push industry to go further to reduce the sugar content in baby foods. We welcome the recent updates to advice for parents and carers on the Start for Life website—picking up on the particular point that commercial baby foods can be used as part of a baby’s diet but should not be used as the primary source of nutrition for infants—and completely recognise my noble friend’s acknowledgement of how important the first 1,001 days of a baby’s life are for the rest of their lives.
Baroness Walmsley (LD)
My Lords, voluntary action and expectation really have not worked and will not in future. Is the Minister aware of a report published in January evaluating the compliance of UK commercial baby foods with WHO nutritional guidelines? Only 45% adhered to the nutritional standards, less than 60% complied with maximum sugar content requirements and none met the requirements for appropriate nutrient health and marketing claims. The paper concluded that regulatory measures are essential. What do the Government plan to do about it?
Baroness Blake of Leeds (Lab)
I hear the frustration in the noble Baroness’s comments every time she raises this issue, and I would love to have a conversation with her about it. While recognising the frustration, I emphasise that we are challenging industry to improve the nutritional content and labelling of baby foods, including, where it can, taking voluntary action to align products with dietary guidelines and best practice. It is not all doom and gloom, and there is evidence in certain areas of improvement as a result of this. There is a great deal more to do, and going forward we will continue to review the situation and work with the best interests of our children, young people and their families in mind.
Baroness Chisholm of Owlpen (Non-Afl)
We know how important this question is. I have been here 14 years, and we have been jumping up and down like crazy frogs on this question. We know that it is all about the messaging and labelling. We know that pouches should mention that they are dangerous for children’s teeth, because more than five milligrams of sugar is too much. Does the Minister think it a good idea for public health departments to train our social and healthcare workers to give simple, easy advice to parents on how they can make cheap, nutritional food to feed their children?
Baroness Blake of Leeds (Lab)
The noble Baroness raises a very important point. This is why we are investing so much in the Start for Life programme, building on all the evidence and experience from the Sure Start model. That model worked because it brought all the other professionals together under one roof. Parents could go through the door, and nobody knew why they were going through that door; there was no stigma attached to it. The other aspect is peer support: the sharing of experiences with other parents. Weaning children is difficult—trust me, I have been there. Parents need huge support. The pressure from advertising, and externally, is immense. The noble Baroness is right: no one agency can do this. It is a team effort, and we all need to pull together.
Lord Watts (Lab)
My Lords, is this not a question of the private sector yet again failing to introduce the required changes? Over many years, the previous Government failed to do anything about this. Do we not need proper regulation, introduced as quickly as possible?
Baroness Blake of Leeds (Lab)
I have answered the point before. Our focus is on improving the situation; however, we kid ourselves if we think that it will be solved just by forms of regulation. This is a much bigger issue: it is about changing culture. It is about making sure that we take young women—and dads—forward on this journey and that we look at every opportunity we have to improve the performance of the industry, to call it out when it is failing and to ensure that we have the best evidence to take things forward.
Baroness Manzoor (Con)
My Lords, the British Dietetic Association estimates that 34% of women in UK breastfeed. We all know that breastfeeding is best for babies, but compared with Europe, the UK figure is one of the lowest. In Germany, 50% of women do some breastfeeding at six months; in the US, the figure is around 49%. New mothers are discharged from hospital the next day, even if they have had a caesarean section. What are the Government doing to support new mothers to breastfeed their babies? What are they doing to promote breastfeeding, particularly as formula companies have huge marketing budgets?
Baroness Blake of Leeds (Lab)
In my former life, I never dreamed that I would spend so much time talking about breastfeeding in the House of Lords. The noble Baroness raises such an important point, and this is why we are investing in Start for Life. The Start for Life services include £18.5 million to improve infant feeding services and to provide practical support with breastfeeding. Breastfeeding is tough; it is not easy. In days gone by there was enormous support in hospitals for women who had their babies there; that does not exist any more. We want to make sure that it is delivered through the communities, to come up with a network of champions to help women, and to improve the statistics the noble Baroness so ably outlined.
Baroness Butler-Sloss (CB)
Some mothers genuinely cannot breastfeed; I was among them. What are the Government doing to strengthen the rules about sugar and other unfortunate things getting into baby food?
Baroness Blake of Leeds (Lab)
The noble and learned Baroness is right about ensuring that we do not stigmatise women who cannot breastfeed; that is critical. There is criticism of some of the organisations supporting breastfeeding, which have perhaps gone too far. We do take this seriously, looking at the different ages, moving from infant formula onwards, and frankly, the advice from companies is quite misleading. All this needs to be taken into account to get a rounded picture and to ensure that consumers are getting the best information possible.
Baroness Williams of Trafford (Con)
My Lords, I agree with the noble and learned Baroness, Lady Butler- Sloss, that we should not stigmatise women who cannot breastfeed. Nevertheless, baby formula does specify that breast is best. Following on from the supplementary question asked by the noble Baroness, Lady Hughes, what general awareness process are the Government engaging in to inform parents that home-cooked food is better than pre-packaged food because it is not ultra-processed and not expensive, like baby food, but much cheaper, and so they know exactly what goes into it?
Baroness Blake of Leeds (Lab)
The noble Baroness touches on the importance of the family hub model, making sure that it builds on Sure Start, but it is also important that we keep an eye on what is happening. The Competition and Markets Authority’s market study is important, and we are looking at this very closely. We want to work with the devolved Governments to make sure that our UK-wide response is appropriate. That level of consultation takes time; we want to get it right and we want to move forward on this issue.
Social Care
Lord Bradley
To ask His Majesty’s Government what plans they have to improve social care provision over the next two years.
Baroness in Waiting/Government Whip (Baroness Blake of Leeds) (Lab)
My Lords, this year we have boosted funding for social care authorities by up to £3.7 billion and provided £86 million for home adaptations for older and disabled people. Further improvements include the largest ever uplift to the carer’s allowance earnings limit, legislation on the first fair pay agreement for care workers and new standards for care technologies. The noble Baroness, Lady Casey, is chairing an independent commission to make recommendations for a national care service, with the first phase reporting next year.
Lord Bradley (Lab)
I thank my noble friend for that reply and welcome the initiatives that she has outlined. I want to raise further the extraordinary work of unpaid workers in the care system. The Government have confirmed to me that 61% of unpaid carers in receipt of carer’s allowance have no other additional income from paid employment. This is not surprising, since eligibility for the allowance requires 35 hours of caring every week, but the amount received for this work is only £83.30 a week or less than £2.40 an hour. Will the Minister urgently review this woeful level of recompense, well ahead of the review by the noble Baroness, Lady Casey, in 2028? This is for millions of unpaid carers, without whom the social care system may well collapse.
Baroness Blake of Leeds (Lab)
I thank my noble friend for his question and take this opportunity to pay tribute to all those unpaid carers who make such an important contribution to the lives of the most vulnerable in our society. This Government are committed to ensuring that families have the support they need, and we know that many people want to play a role caring for their family and friends. Quite frankly, it is exceptionally difficult at times. We want to ensure that they are better able to look after their own health and well-being, which will enable them to care for others. To support our unpaid carers, in April 2025 the Government increased the carer’s allowance weekly earnings limit from £150 to £196. This is the largest ever increase. I know that the noble Baroness, Lady Casey, through her commission, will be looking at this situation very closely as we move forward.
Baroness Verma (Con)
My Lords, I declare my interest as a director of an adult social care business. It is time—and I hope the review looks at this—to rename carers something other than “carers”, because it distorts the training and level of professionalism that carers provide every day. If we try to rephrase the name “carers”, they may see that there is a career progress model in place for them.
Baroness Blake of Leeds (Lab)
I welcome the comments from the noble Baroness, Lady Casey, that she will look to reach out to all the different organisations, including the voluntary sector and carers themselves. She will hear from across the sector, and I am sure that the noble Baroness, Lady Verma, will make her voice heard as we take this work forward.
Baroness Tyler of Enfield (LD)
My Lords, the recent report of the Health and Social Care Committee found that too much emphasis is being put on the cost of reforming social care and not enough thought being given to the human and financial cost of inaction. It also argued that the Government need to measure the true cost of inaction so that they can present a robust financial case, not least to the Treasury, and one that takes account of the loss of tax receipts as people have to give up work and withdraw from the labour market. Do the Government agree with that analysis?
Baroness Blake of Leeds (Lab)
It will come as no surprise to the noble Baroness that we are looking at the recommendations of the Health and Social Care Select Committee report and will come forward with our responses. It is of course vital to look at the impact of the model that we have now on society, on the people involved and on the economy. The various debates we have had in this House in the time I have been here have picked that up and recognised the valuable contribution that carers make to the economy. We have to start taking the holistic view moving forward. That is why we have the commission: to look at all the different aspects, improve the situation and make progress.
Lord Laming (CB)
Does the Minister agree that the Government will not achieve their ambitions for the National Health Service without also having a well-developed and successful plan of development to make social care services easily accessible, properly trained and well respected? Do the Government have a development plan in mind for social care?
Baroness Blake of Leeds (Lab)
The noble Lord raises such an important point. I am sure he will also be thinking about the vexed issue of hospital discharge and all the issues that are creating such difficulties in the system. I emphasise that adult social care is part of our vision for a neighbourhood health service, shifting care from hospitals to communities, with the NHS working alongside local authorities, social care providers and the voluntary sector. I am sure we are all looking forward to the announcement of the 10-year health plan, looking at how we can move healthcare from hospitals to the community but recognising that all agencies out in the community have a vital part to play to make this story successful.
Baroness Pitkeathley (Lab)
My Lords, the Government have rightly adopted a preventive approach as far as the NHS is concerned. Does my noble friend agree that it would be a good idea to apply this to social care as well? To take, for example, unpaid carers—I can never resist the temptation to remind your Lordships that they save the nation £192 billion a year—if you put in a small amount of support for those unpaid carers at an early point in their caring journey, you can often prevent a crisis arising. It surely makes very sound economic sense to adopt this preventive approach to social care.
Baroness Blake of Leeds (Lab)
The noble Baroness has made the case for us all. As we know, one of the main pillars of changing the health system we have is to move from sickness to prevention. I believe you can transfer that logic and thinking to this area. We have fantastic examples of different neighbourhoods having stepped up to the plate, working to bridge the gap between the health service and local social care providers and working with carers as well. It is critical that we look at the examples of good practice and work out how we can roll them out so that we can make the shift that needs to be made.
Baroness Stedman-Scott (Con)
My Lords, in January the Government announced that they will develop a shared digital platform to allow up-to-date medical information to be shared between the NHS and care staff. How much progress has been made in developing this digital platform?
Baroness Blake of Leeds (Lab)
It will come as no surprise to the noble Baroness that I cannot give her the detail on that question, but I will be very happy to get back to her with an update on where we have got to. Obviously, the whole area of digitalisation is another of the pillars in moving the health service forward. So many people collect data but do not use it. We are very good at harvesting it but not actually analysing it and working out how we can use it to best effect. But it is one of the commitments.
Baroness Winterton of Doncaster (Lab)
My Lords, what discussions are being held with private sector care companies to require them, in exchange for the often considerable amount of money they receive from the public purse, to work with education institutions to provide high-quality training for social care staff in their local area?
Baroness Blake of Leeds (Lab)
My noble friend raises an important point. If we are moving to a neighbourhood health service, we need to engage with local social care providers and make sure that they are part of the mix. This is where the noble Baroness, Lady Casey, is starting. She is bringing everyone together to talk about how to deliver this. We need to make sure that our training institutions are engaged and that everyone who can contribute is around the table to move things forward.
Young People: Sporting Activities
(1 day, 16 hours ago)
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Lord Moynihan
To ask His Majesty’s Government what is the timeline and budget to deliver the Prime Minister’s commitment made at his meeting with the Lionesses football team on 19 June to ensure young people have equal access to high-quality sport and extra-curricular activities.
The Minister of State, Department for Education (Baroness Smith of Malvern) (Lab)
My Lords, we are committed to breaking down barriers to opportunity and supporting more children to access high-quality PE and sport. The new commitment, outlined by the Prime Minister as he wished the Lionesses good luck in their future tournament, is to create links between schools, local clubs and national governing bodies of sport to help deliver this. We are working with the school and sports sectors to design the partnerships. Further details, including funding, will be outlined in due course. Following a commercial process, we expect these partnerships to be in place from autumn 2026.
Lord Moynihan (Con)
The announcement by the Prime Minister that every child across the country will be given equal access to high-quality PE and sport, as the Government have indicated, will be welcomed across all sides of the House. However, in view of the fact that some 3.9 million children—an increase this year to nearly 40% of our schoolchildren—do not meet even the Chief Medical Officer’s basic recommendation for daily physical activity, let alone have access to high-quality PE, and given the Government’s 15% cut to DCMS’s administration budget by 2030 in the spending review and their plan to remove Sport England’s role as a statutory consultee in the planning process, leading to Sport England’s view that this will have a negative impact on physical activity with the loss of yet more school playing fields, does the Minister agree that a clearly costed, additional multi-billion pound budget will be essential to avoid falling massively short of the delivery of the Prime Minister’s laudable aspirations?
Baroness Smith of Malvern (Lab)
Of course it is important that there is a fully funded and costed programme, but when we talk about the facilities that are so important for enabling young people—in fact, all people—to engage in sport, I point the noble Lord to the increased capital investment in schools announced as part of the spending review, part of which can be used for maintaining their facilities, and DCMS’s announcement of an additional £400 million for community sports facilities. It is also important that where we have strong local clubs and national governing bodies—which are, to give them their due, providing lots of opportunities for young people—we also need something to bring those things together to ensure that, however much investment we make in the system, we maximise it for children to be able to benefit. That is the intention of the new partnership.
Lord Addington (LD)
My Lords, when, a good few years ago now, all three major parties looked at sports policy, we all said that there should be a link with clubs. We also all said that there had to be a mix of options available to make sure people find something they will enjoy or stand a chance at. Will the Government commit that they will not create unique monocultures for sport but that people will have options? Some people will be hockey players, some people rugby players, many people will be soccer players, netball players, et cetera. Making sure that everybody has an option is very important, otherwise this will merely repeat some of the failures of the past.
Baroness Smith of Malvern (Lab)
The noble Lord makes an important point: activity is important, but not every young person will want to do the same sport. Although, as we can see with the Lionesses, football has arguably become much more popular for girls, the focus has quite often been on traditional sports. This has meant that girls, for example, have not necessarily found the things that they would like to do to keep active. I can absolutely commit that it will be part of the Government’s intention, both through this partnership and more broadly, to ensure that there is a range of opportunities to enable everybody to find sport and activity that they enjoy, and to keep healthy.
Baroness Gohir (CB)
My Lords, can the Minister say what specific action the Government are taking to close the ethnicity gap with children in sport? Even within different ethnic groups, children access different types of sports. Addressing this gap will help with integration and community cohesion.
Baroness Smith of Malvern (Lab)
The noble Baroness makes a very important point. It partly relates to the extent to which we can provide a whole range of opportunities for people to engage in activity, and the way we use the new partnership arrangements locally to see what sort of provision is available and how we can link schools more easily to that local provision, which may well come from and be promoted by different parts of the community. This must be an approach that ensures everybody has the opportunity to benefit from the obvious advantages that come from being more active and taking part in sport.
Lord Cryer (Lab)
My Lords, for many years now, schoolchildren have been losing access to swimming pools; pool time has been in decline. That is clearly not the fault of the present Government. However, we are where we are. We need to stop that decline and reverse it so that schoolchildren increasingly have access to pools, not just to create the champions of the future but to save lives, because swimming is the one sport that might make a difference between living and dying.
Baroness Smith of Malvern (Lab)
My noble friend is absolutely right. That is why it is a key part of the national curriculum that children should be able to swim before the age of 11. It is why the ongoing commitment to the primary PE and sport premium, which is funded for the next academic year at £320 million, can also be—and has been—used to ensure that there is access to swimming facilities and water safety in the way my noble friend outlined. We also need to ensure that local authorities recognise the importance of swimming pools so that everybody can benefit.
The Lord Bishop of Sheffield
My Lords, I welcome the Government’s investment of £100 million to upgrade sports facilities and improve access to sport for pupils with special educational needs and disabilities. However, noble Lords will be aware of other significant disparities that persist across demographics relating to participation in sport and extracurricular activities. These include disparities relating to race and gender, as well as stubborn socioeconomic and regional inequalities. How do the Government plan to level the playing field regionally to enable the most underrepresented groups to participate more fully in sport?
Baroness Smith of Malvern (Lab)
The right reverend Prelate is right to recognise the importance, and the possibility, of engaging children with special educational needs and disabilities in sport and PE. That is why the Government have approved a grant of £300,000 a year for up to three years to increase and improve opportunities for pupils with SEND by identifying where there is already good practice and sharing it more widely. As I suggested, that needs to be an important element of what happens with the new partnerships to ensure that links are made between partners so that everybody, regardless of their background, can get the benefits that can come from sport and activity.
The Earl of Effingham (Con)
My Lords, according to modelling by the Royal Society for Public Health that came out yesterday, rates of overweight or obese children will rise in 90% of local authority areas in the next decade. Separately, approximately one in five children and young people aged eight to 25 currently experiences a probable mental health disorder. It is a proven fact that sport, physical exercise and good diet help with these issues, so does the Minister agree that the various cross-party amendments to the Children’s Wellbeing and Schools Bill relating to nutritious food and increased physical education should be accepted?
Baroness Smith of Malvern (Lab)
Given that we are about to go on to day eight in Committee on the Bill, I look forward to that discussion and debate. The noble Earl is, of course, right to identify the benefits of sport and activity to ensure young people remain healthy, both physically and mentally. That is why, without waiting for the Bill and the amendments he outlined, we are already making progress to support sports activity in schools. More broadly, through the work of my colleagues in the Department for Culture, Media and Sport, we are ensuring that grass-roots sports facilities are provided as well. I look forward to the debate that the noble Earl mentioned.
The Earl of Devon (CB)
My Lords, I was fortunate enough to sit on the National Plan for Sport and Recreation Committee with the noble Lords, Lord Moynihan and Lord Addington, and a number of other noble Lords. We learned of the remarkable lack of access to secondary school playing fields after school hours, particularly for local school clubs. It seemed to us that that was merely a lack of support for man hours and staffing. What are the Government doing to increase access to the few remaining secondary school playing fields?
Baroness Smith of Malvern (Lab)
Let us be clear: it is not true that there are only a few remaining secondary school playing fields. However, the noble Earl makes a really important point that, where a facility is provided for a school to use during the school day, we should work harder to ensure it is available for communities to use. This is alongside the additional investment the Government are putting in anyway to ensure that there are grass-roots and community sports facilities.
Middle East
(1 day, 16 hours ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
Lord Callanan (Con)
My Lords, events in the Middle East over the past week have brought into sharp focus a truth that we ignore at our peril: that the Islamic Republic of Iran remains one of the most dangerous and destabilising forces in the world today. The United States’ targeted strikes on Iranian nuclear infrastructure were a necessary and vital act in the face of a regime that continues to enrich uranium beyond civilian thresholds, arms proxies across the region and openly calls for the destruction of its neighbour, and our ally, Israel. Yet, amid this defining moment, the response from His Majesty’s Government has been almost non-existent. Over the weekend, in the media and in the Foreign Secretary’s Statement made in the other place yesterday, not once has the Government even had the courage to come out in support of this vital action.
It seems bizarre to us on these Benches that decisive action to neutralise the nuclear threat posed by one of the world’s most dangerous and volatile states is not openly welcomed by the Government. I want to ask the noble Lord for some clarity. Will he now take this opportunity to come out in support of the strikes undertaken by the US on Iran’s nuclear facilities? If not, can he explain why? Could it possibly be a result of the legal advice reportedly issued by the Attorney-General that it could be illegal for Britain to play any role in the Iran campaign except for defending our allies? Does the Minister no longer consider Israel an ally?
My noble friend Lord Wolfson has made clear that the UK has a strong legal ground for supporting this action. There is at least, I am sure the Minister will concede, a legal debate to be had on this question. Why did the Government choose to come down on the side which went against our allies in the US and Israel? I wonder what quite was going through the mind of the noble and learned Lord, Lord Hermer, when he issued this supposed advice. I cannot imagine why anyone witnessing a showdown between democracy and tyranny, between our ally Israel and an unhinged murderous caliphate, would conclude that we better not get involved because we might break the rules.
One shudders to think what might have happened had such advice been followed in 1939 or 1950 or 1990—or in 2022 when our friends in Ukraine were barbarically attacked. Fortunately, in those instances, our willingness to support our allies was not governed by academic hesitation. We must be clear that history will not smile on us for this, however much the Government swaddle themselves in grand talk about international law. For the noble and learned Lord to encourage the UK to stand idly by while Israel faces the real risk of genocidal nuclear attack seems to be a serious misjudgment.
It is deeply regrettable that Ministers have failed to issue a clear and immediate statement of support for our closest ally. The US acted to uphold international security and defend the global non-proliferation regime. That it did and continues to do so without our support is something we should be ashamed of. Let us be clear: Iran is not just a regional threat; it is a global threat. It bankrolls terrorism from Gaza to Beirut, from Baghdad to Sanaa. It plots assassinations on European soil, it disrupts shipping lanes in international waters and it is actively pursuing the technological means to blackmail the world with nuclear force. For the Government to equivocate in the face of such aggressive and dangerous action from Iran is both morally questionable and, in my view, strategically short-sighted. We should have stood shoulder to shoulder with our allies, and the Government failed to do so.
Let me also address this morning’s announcement of a temporary ceasefire. If it holds, it will be welcome because any cessation of violence offers a chance to de-escalate and protect civilian lives. But let us not be naive. Already this morning, Israeli officials have reported that Iran violated the ceasefire. That is a reminder of the challenges we face when dealing with bad actors who have no interest in peace and further underscores the fundamental threat that Iran poses to peace and lives in the region and wider world.
We must also support our allies in ensuring that de-escalation does not mean appeasement. I therefore ask the Minister to explain to the House what steps the Government will take from today to ensure that any remaining nuclear capability that Iran has is dismantled. If the Government remain so intent on pursuing a purely diplomatic solution, how will they change their approach to make sure that any agreement reached with Iran holds firm?
Let us not forget that diplomacy failed to prevent Iran acquiring uranium enriched to 60%. Let us not forget that, already, it appears that Iran has violated the terms of a diplomatic settlement to broker a ceasefire with Israel. The approach the Government have adopted has not been very successful. I hope the Minister will take this opportunity to set out what the Government will do differently in future. It is not enough to say that we are pursuing a diplomatic solution, because that has been unsuccessful.
Finally, I have some questions about our country’s relationship with the US and our allies. As noble Lords will be aware, the Prime Minister is in The Hague today at the NATO summit. I am sure that, in the light of this, the Minister and his colleagues will have asked themselves this question: how did they get it so wrong on the US and Iran? The Government’s fundamental assumption, that there was time for negotiation, was clearly just wrong. It is a fact that the Government were blindsided on a matter of huge geopolitical importance and completely failed to understand what the Americans were thinking. The Prime Minister has been adamant that the President would not intervene in Iran. He went so far as to say he was in “no doubt” about the matter, despite very public indications to the contrary.
We are supposed to have a special relationship with the United States. This seems to be in doubt given how the Prime Minister and the Foreign Secretary have acted in this case. In the light of this, does the Minister still believe that the US and the UK have a special relationship? Does he think that failing to come out in support of the US has damaged this relationship?
The events of recent days have exposed not only the growing threat posed by Iran but the shortcomings in the Government’s response. At a time when clarity and strategic resolve are required, Ministers have offered neither. They have failed to support our closest ally, misjudged the geopolitical landscape and clung to a diplomatic approach that has proved ineffective. The regime in Tehran thrives on hesitation; it exploits weakness, distrusts peace and seeks power through terror and provocation. If we are serious about international security, non-proliferation and our relationships with our allies, our response must be firm, united and credible. The US and Israel acted decisively and justifiably; the question is whether this Government will finally find the courage to stand with them.
Lord Purvis of Tweed (LD)
My Lords, every casualty in the Iran-Israel conflict is one that could have been avoided, but it is worth remembering that, in the same period, almost as many people have been shot in Gaza simply queuing for food, and the crisis in the region continues.
On Iran, the US clearly decided to escalate to de-escalate. It may yet re-escalate, because the whiplash of posts from the President this morning are hard to follow with a degree of reassurance, but I hope that a ceasefire can be operational, even though the most recent updates require us to be somewhere between pessimistic and cautiously optimistic. The Trump Administration seem to think that war plays out like a reality TV show, but this is real violence with real deaths and real-life consequences, not so much for egotistical men in their 80s and near-80s as for the victims, who are primarily civilians—women and children in particular.
The Tehran regime is clearly homicidal, but we may find out that it is probably not suicidal. The US and Netanyahu Governments are clearly tactical, but we will find out that they are probably not strategic. The Minister told the House last Thursday that the US was seeking to de-escalate at the very time it was deciding to escalate. The immediate repercussions are being seen, and we cannot now know for certain what will follow.
Trump and Hegseth said the Iranian nuclear programme was obliterated and ended. Now US officials are giving a more sober view of “damaged” and “delayed”. The IAEA’s information is probably more reliable: that it is likely that there has been significant damage—but this is difficult to verify. Even more difficult to verify is the impact the strikes will have on preventing weaponisation in the medium term. The IAEA warned against military strikes for the very reason that they would likely make it even harder to verify, and I suspect that may be the reality now.
Unquestionably, Iranian options in the next period are more limited than they would have been 10 days ago, but it is rash to think that we know whether Iran will continue to act immediately or play a game of time on a calendar it has operated under for many years. I was in Iraq the last time Iran claimed the US would pay irreparable damage, for the killing of Soleimani outside Baghdad Airport; instead, it signalled and then performed a largely performative display of attacks near Erbil. Full escalation or controlled tit-for-tat is a delicate dance where miscalculation is deadly, but it may well be being played out.
We therefore cannot predict the next 48 hours from Tehran, not to mention the next 48 days; nor for that matter, and with deep regret, can we necessarily predict that from the Trump Administration. We can predict heightened rhetoric taking on increasingly macho and jingoistic terms. From loose talk of regime change, the current Tehran regime will likely become even more repressive, and more secretive and patient in rebuilding its proxy relationships and other interests.
Last week in the Chamber, and just a few moments ago, we heard noble Lords drumming a jingoistic beat. We also heard—more rightly in my view—caution. I would advise the House to listen to the wise words of the noble Lord, Lord Lamont—the noble friend of the noble Lord, Lord Callanan. These Benches agree with the Government’s position of not participating.
As much as I agree that Iran should not have nuclear weapon capability—and I strongly agree that Israel should have the ability to defend itself against unacceptable calls for its destruction—we continue to see too many tacticians and too few strategists. As an Iraqi friend, who, incidentally, detests the theocratic dictatorship in Tehran, told me recently, Netanyahu was a cheerleader for regime change in Baghdad 20 years ago and helped persuade Bush and Blair. He handed it to Iran. He wanted Gaza to be in violent competition with the West Bank to prevent a two-state solution and bolstered Hamas. He successfully lobbied Trump for the US to leave JCPOA, which restarted the weapon capability path of nuclear Iran, and now he has positioned Trump into looking weak if he did not join his tactics on bombing and regime-change rhetoric. At each step of the way, quick tactical wins led to strategic errors.
We of course hope for a ceasefire with Iran, but we fervently hope for respite for the civilians in Gaza and the West Bank too—so I close with regard to the situation there. It is alarming, after all the suffering of the civilians within Gaza, to see the recent reports of Hamas now recruiting. The very circumstances exist now for Hamas to regain strength. This is what we were told would be inconceivable with the war aims of the IDF. Reconstruction preparedness is now even harder, given the policy choices for the Gaza Humanitarian Fund to be a mercenary and profiteering operation to supply food and medicine.
So I ask the Government: what work are they doing with our allies to ensure that food is being supplied, and on the restrictions at the border—not assisted by the Knesset law preventing UNRWA working with third parties to co-ordinate the delivery of food and medicine—to ensure that the people of Gaza no longer have to experience the indignity of queuing in danger areas for food? Will the Government provide clarity on the future funding for both programme and humanitarian assistance for the people of Gaza delivered through UNRWA after July?
The medieval scenes that we see, of people having to queue to receive food and medicine across an apocalyptic backdrop, mean that the current situation must end. The GHF approach has been a deadly failure, and the acute shortage of food, deliberately being withheld at the Gaza border, must end. I hope that, if there is breathing space with Iran and Israel, we can at least focus on getting the aid in, which is desperately needed.
The Parliamentary Under-Secretary of State, Foreign, Commonwealth and Development Office (Lord Collins of Highbury) (Lab)
I thank both noble Lords for their contributions, comments and questions. I say to the noble Lord opposite that I am rather disappointed with his tone because I thought that, in the other place, the shadow Secretary of State made it clear that she was with the Government on putting forward peace and security. The security of this nation is vital. His tone rather underplayed those comments.
I make it clear that we have long had concerns about the Iranian nuclear programme, and we have been very clear that Iran cannot have nuclear weapons. The US has taken action to alleviate that threat. It is important that we now de-escalate the situation, stabilise the region and get all parties around the negotiating table. Although a ceasefire between Iran and Israel is an opportunity to secure much-needed stability, the events this morning clearly show how fragile and volatile the situation is. We strongly urge both sides to do their utmost to hold to the terms of the ceasefire.
On the action, the noble Lord, Lord Purvis, alluded to the assessment. One thing that President Trump has been absolutely clear about is that this action is not the end of the story in dealing with the nuclear threat in Iran. He has made it clear that he wants to negotiate a deal, and that is fundamental for the long-term security of the Middle East.
As I say, we have been very clear about the nuclear programme. It is important that we get all parties back around the negotiating table. We have strongly supported diplomatic efforts to reach a lasting settlement, as President Trump has indicated. This is now the moment of opportunity; we can have a diplomatic outcome, because only a diplomatic outcome will provide a lasting solution to Iran’s nuclear programme. We have made it clear to Iran: negotiate with the US. That is backed up by the E3, and that is what we as a country should do to make our position more secure.
I pay tribute to the Prime Minister and the Foreign Secretary for what they have been trying to do over the past three days. The Foreign Secretary has spoken to the US Secretary of State, Rubio, the Israeli Foreign Minister and the Iranian Foreign Minister to urge de-escalation. He has also spoken to other regional counterparts, including the Egyptian, Lebanese, Saudi, Emirati, Bahraini and Cypriot Foreign Ministers—all strong allies of the United Kingdom. We are absolutely committed to that diplomatic effort. The Prime Minister has spoken to President Trump, Prime Minister Carney, the King of Jordan, the Sultan of Oman and the German president to support de-escalation—all vital allies of this country—and provide security. The Minister for the Middle East met the Iranian ambassador yesterday to stress the need for a return to diplomatic efforts.
We made clear our condemnation of Iran’s attacks on Qatar and Iraq yesterday. Our focus again has been on de-escalation and diplomacy to end this crisis. The Foreign Secretary made it clear that we stand with our allies in solidarity with the US and Qatar, and we have let Qatar know that it will always have our steadfast support. We are aware that Qatar has communicated—it has sent a letter to the UN Secretary-General. It is, of course, up to the UN to respond to that letter.
The United Kingdom did not participate and is not participating in the Israeli and US strikes. We continue to urge restraint. Our priority is stability in the Middle East. The situation remains volatile, and we remain clear that Iran must never be allowed to develop a nuclear weapon. More broadly, we have always supported Israel’s right to self-defence and its right to protect its citizens. The UK has consistently pushed for a ceasefire since the escalations began, and we continue to work with international partners.
The Minister’s efforts over the past two days have been about protecting our citizens and trying to get UK citizens out of harm’s way. That is why we organised the flight from Tel Aviv—and, hopefully, another one took off today. The interests of our country are a priority, but our UK citizens are also a priority.
In relation to the noble Lord’s comments, I am not going to provide a legal commentary right now. As I said last week, all actors must abide by international law. The noble Lord is fully aware of the long-standing convention reflected in the Ministerial Code. It is not routinely disclosed whether the law officers have been asked to provide legal advice, and the content of that advice is not routinely disclosed. The convention provides the fullest guarantee that government business will be conducted at all times in the light of thorough and candid legal advice. However, I repeat: all our efforts are about ensuring the security of this country and peace in the Middle East.
To be very clear, as I have said before in this Chamber, I am a friend of Israel and have always recognised the threats to its security and the tough neighbourhood it lives in. The Government cannot accept what is happening in Gaza or the West Bank, but this must never undermine our support for Israel’s security. We have to be very candid with our ally about the situation in Gaza. We all understand what a frightening time it must be for Israeli citizens, running into bomb shelters. The Foreign Secretary has expressed his personal concern. That is why we are absolutely focused on ensuring that we contain this conflict and avoid escalation.
I am clear about the threat from Iran, but we will not give up on diplomacy or the interests of the people of Gaza. We plead with the Israeli Government to open the borders so that we can get the necessary aid in. We have made it absolutely clear that the hostages, or, sadly, the bodies of the hostages, must be returned immediately. We must see a ceasefire.
We are a very strong ally of the United States and we are working together. President Trump has made it clear that he wants to see a long-term deal on the possession of nuclear weapons in Iran. The United Kingdom and its E3 allies will support him in that effort. I hope the noble Lord opposite will do the same.
Baroness Blackstone (Lab)
My Lords, unlike the extraordinary accusations made by the spokesman for the Conservative Party just now, I congratulate the Government on the carefully thought-out and nuanced position they have taken on the military conflict between the US, Israel and Iran. I thank my noble friend and his senior colleagues for the efforts they are making to try to find a long-term and lasting diplomatic solution to the issue of nuclear weapons in Iran. Turning to what is happening in Gaza, can my noble friend tell the House a little more about what is happening with the replacement of the completely failed Israeli-American system of aid distribution, which I think the Conservative spokesman said he thought was fine? Have steps been taken to replace it with NGOs that are familiar with the best ways of distributing aid in Gaza, so that we do not see any more slaughter of Palestinian civilians desperately trying to get food aid for their starving children?
Lord Collins of Highbury (Lab)
I thank my noble friend for her comments. To be absolutely clear, we are leaving no stone unturned in getting aid into Gaza. We are working with a range of NGOs—everyone possible—but we remain committed to the solution of ensuring that aid is properly distributed through the main agency, UNRWA. We have sought assurances on that and we have taken every opportunity that we have had to put it to the Israeli Government that they should open those routes to aid to ensure that it can get through. We are now in a desperate situation; as the noble Lord, Lord Purvis, said, those seeking aid through the US-Israeli agency are being shot as they approach the distribution points. That cannot be right. We must be able to get proper aid in through the appropriate agencies.
Baroness Browning (Con)
Does the Minister share my concern that the first port of call for the Iranians to be provided with something not immediately available in the world—scientific expertise in nuclear weaponry, to replace the nuclear scientists whom we know have been killed—was Moscow? Is the Minister confident that, against the backdrop of the talks that will necessarily take place, and as we cannot yet identify what has happened to the uranium and given that particular port of call, we will keep our eye on the ball over what Iran will do in future?
Lord Collins of Highbury (Lab)
The noble Baroness is right, and we should be concerned that that was the Iranian Foreign Minister’s first port of call, and we should be aware of what Putin said to him. However, that means it is imperative that we support President Trump, who has made it clear that the only long-term solution to ensuring Iran does not have a nuclear weapons capability is to “do a deal”, as the President puts it. We will absolutely be supporting our ally in achieving that fundamental objective.
The Lord Bishop of Leeds
My Lords, I am grateful for the Statement and the commitments the Government are making, but history teaches us that you cannot bomb an idea or a resentment out of existence. Going back to the comments made by the noble Lord, Lord Purvis, about the difference between strategy and tactics, what scenario planning are the Government doing to address the next three or four generations of terrorists who are being born amid the traumas of the current violence?
Lord Collins of Highbury (Lab)
The right reverend Prelate makes an important point: that our actions should not be only in international diplomacy but should look at our communities at home and how we bring them together. It is also important that we ensure that all our communities are safe, and that is why we are taking every possible action, particularly against malign states who intend to intervene. He is right that we should focus on community building and ensuring that the terrible conditions do not provoke people into taking the kind of horrendous actions we have seen in the past.
Lord Mohammed of Tinsley (LD)
My Lords, I welcome the Statement from the Minister and urge the Government not to follow the drumbeat of escalation and to learn the lessons of Iraq in 2003. On the understandably delayed UN conference initiated by the French and the Saudis, and now that we have this window of opportunity with the ceasefire between Israel and Iran, what actions are the Government taking to bring forward as soon as possible the date for that meeting? It is urgently needed; we cannot take our eye off what is happening in Palestine, particularly in Gaza.
Lord Collins of Highbury (Lab)
The noble Lord is correct and as I said last week, we were extremely disappointed about the postponement of the conference, but it was inevitable because it was not going to be possible for all the participants who needed to attend to be there. Let me reassure the noble Lord that we are working very closely with the French and the Saudis to ensure that the two-state solution conference takes place as soon as possible. The Government will be working very hard to ensure that the conference is a success and that we can look towards the long-term future.
Lord Hain (Lab)
My Lords, I strongly support my noble friend the Minister in his position and observe that the stance taken by the noble Lord, Lord Callanan, is at complete variance with what his Government did in 14 years of power—which was not to start nuking everybody and seeking to attack aggressively, but to pursue the very diplomacy that he seeks to promote now. As a former UK Middle East Minister, I suggest that we need to recognise the two main fault-lines in this region: first, Palestine and Israel, and, secondly, Shia/Sunni, which means Iran and Saudi. What is needed is a regional summit of the Saudis, the Gulf states, Egypt, probably Jordan, certainly Israel and Iran as well, to try to provide a long-term stable plan for the region.
Lord Collins of Highbury (Lab)
I agree with my noble friend and, as I said in response to the earlier question, that is why we have been working with France and the Saudis on the two-state solution. Of course, it looks extremely difficult to apply, but in working hard with allies in the region, I believe that that can be the long-term secure future that can resolve those issues.
I repeat that the Prime Minister, the Foreign Secretary and the Minister for the Middle East, not just in the past few days but all this week, have constantly been in touch with all our Middle East allies—across those divides, if you like—to ensure that we focus on long-term security, stability and de-escalation. That is what we have been focused on. The long-term solution to Iran’s nuclear capabilities is what President Trump said: do a deal and secure the long-term future.
Lord Pickles (Con)
My Lords, I congratulate the Government on their decision to move towards proscribing Palestine Action. I urge them to take the next logical step and proscribe the people who are paying for Palestine Action and for terrorism on our streets in Europe: the IRGC. Can they act quickly, because we need to make our streets safer?
Lord Collins of Highbury (Lab)
I totally agree with the noble Lord that we need to make our streets safer. Iran’s destabilisation of the Middle East, human rights violations and nuclear escalation also include threats to people in the UK. All these actions are absolutely abhorrent, and we will not hesitate to take the most effective measures against the regime and the Islamic Revolutionary Guard Corps. We are working at pace to identify further ways to deal with state threats, including those from the IRGC. On 4 March, we announced that we will place the Iranian state, including its intelligence services and the IRGC, on the enhanced tier of the new foreign influence registration scheme. As the Home Secretary announced to Parliament on Monday 19 May, the review of Jonathan Hall KC delivers a suite of recommendations to tackle state threats, and we are committed to taking them forward, including the creation of a new state threats proscription tool. I hope that the noble Lord will understand that we are focused on dealing with that threat.
Lord Grocott (Lab)
My Lords, I welcome and admire the way my noble friend the Minister has presented the case for the Government today, in his calm and measured way—in stark contrast to the belligerence of the Opposition spokesman. I am glad that my noble friend is in charge of these things and not the Opposition spokesman.
I ask my noble friend to reflect with me—and, I hope, come to the same conclusion—that western intervention in the affairs of the Middle East rarely seems to end happily, whether it is drawing boundaries, supplying arms or changing Governments. Can he assure me that the watchword of this Government—going forward on this series of crises, with new things happening every day—will be one of extreme caution? It is so much easier to get embroiled in a conflict there than it is to get out of one.
Lord Collins of Highbury (Lab)
I appreciate my noble friend’s comments. I reassure the House that I am absolutely committed to working with all sides, including shadow Ministers opposite, to ensure that we put the security of this country first. There is no partisanship here; we want to work together to ensure the security of this country. My noble friend is right that, in a situation that can escalate so quickly, caution is absolutely essential. The key element here is how we work with our allies, not just those across the Atlantic but particularly those in the region. The noble Lord, Lord Ahmad, has not been provoked yet to ask me a question, but he has been absolutely right in his past contributions, particularly as Minister for the Middle East and North Africa, when he focused on building strong alliances with our allies. This Government and I are determined to follow in those footsteps.
Lord Green of Deddington (CB)
My Lords, as the Minister knows better than most of us, this is a very complex situation. The Government have handled it rather well so far; it has been a very complex week and the decisions taken have been very accurate. Nevertheless, I hope that the Government will be extremely careful in relation to Iran; that is where the difficulties will arise and where we could find ourselves, at short notice, in a very difficult situation.
Lord Collins of Highbury (Lab)
I appreciate the comments of the noble Lord. We are determined to actually focus on all those diplomatic tools we have available. We are absolutely focused on that. I also reassure noble Lords that we did not participate in the US or Israeli strikes. We were given due notice, as we would expect as close allies of the US. We have been moving assets to the region to make sure that we are in a position to protect our own interests, personnel, assets and allies. Our first duty is to ensure that our forces and bases in the region are safe and secure. We have been moving assets to the region for that reason.
I agree with the noble Lord. We are cautious and absolutely focused on diplomatic efforts, but we remain committed to protecting our troops and assets.
Lord Hussain (LD)
My Lords, I welcome the Government’s Statement on the de-escalation of the crisis in Iran, but my heart bleeds for the people of Gaza who are being killed—men, women and children—while trying to collect food and water. According to Reuters, 44 people were killed by Israeli strikes in Gaza on Friday while collecting aid. Can the Minister assure the House that British weapons supplied to Israel are not used to kill innocent men, women and children in Gaza?
Lord Collins of Highbury (Lab)
The simple answer to the noble Lord is that I can give him that assurance. We have absolutely complied with those licences. We stopped issuing licences for exports to Israel that could be used in Gaza. We are absolutely complying with what he says.
Baroness Foster of Oxton (Con)
My Lords, for more than 30 years, the leaders of the Arab League and its friends, the EU and Europe as a whole have sat on their hands and looked on as this despotic Islamic Republic of Iran has acquired nuclear capability. Does the Minister support the military action taken by the USA in endeavouring to destroy the imminent danger, not only to Israel but to the rest of the world in general? Would he also agree with me that securing the release of the 50 hostages still held in Gaza might go some way in alleviating this conflict?
Lord Collins of Highbury (Lab)
I agree with the noble Baroness on the last part of her question. We have been very clear that the immediate release of all hostages is vital and we have been absolutely clear on the demand for an immediate ceasefire.
The noble Baroness implies something that is not necessarily the case. The US has taken action to alleviate the threat that Iran poses. As President Trump has repeatedly said, and said this morning, the long-term solution of stopping that threat—stopping Iran having nuclear weapons—is a deal, and I have confidence in President Trump in achieving that.
Lord West of Spithead (Lab)
My Lords, I have to congratulate the Government on the way they have been handling the current situation. I fought in a number of wars, and there is nothing like fighting in a war to make you realise that you do not want one. The actions we are taking I think will help stop that. Historically, bombing campaigns tend to never win a war, and they do not get you in that direction. Looking back historically, I worked at length with the Americans, our very close allies, in stopping Netanyahu attacking the Iranian nuclear facilities—this is going back a few years. The Minister will probably remember that they actually did dress rehearsals at time.
Can I just clarify with my noble friend the Minister that, if we want to have long-term security for Israel, the only way is to stop fighting and negotiate?
Lord Collins of Highbury (Lab)
My noble friend is absolutely right and I pay tribute to him for his service to this country. He is absolutely right that in the long term—I keep repeating this—the US actions have resulted in alleviating the threat. President Trump has made it clear that the long-term solution is a deal, and that is what this Government will be focused on supporting. We have made it clear, and the Prime Minister and the Foreign Secretary have said to Iran, “Negotiate with the US and reach a deal that removes this threat for ever”.
Baroness Bennett of Manor Castle (GP)
My Lords, the noble Lord has spoken about short-term tactical victories versus long-term strategic outcomes. Iran is known to have had 400 kilograms of 60% purity enriched uranium. If it went to 90%, which is relatively easy, it could produce about 10 warheads. The International Atomic Energy Agency and JD Vance have both said they do not know where that uranium now is, and it can be moved in scuba tank-sized objects. A spokesperson for the Carnegie Endowment for International Peace said:
“It’s difficult to overstate what a big deal this is”
and called this a “potential disaster” for nuclear non-proliferation. Do the Government agree with that analysis?
Lord Collins of Highbury (Lab)
We absolutely agree about the threat that this poses. Nobody could have been more concerned to see, prior to the attacks on those nuclear sites, the long truckloads. We do not know where they were going or what was in them, but I think we can all assume that it was not just empty packages that were being taken out. That is why—I am sorry I keep repeating myself—President Trump knows that the actions that he took are not sufficient to remove this threat in the long term. A negotiated deal, with the presence of proper inspection that we have had, is absolutely vital for the future security of the region and the world as a whole.
UK Infrastructure: 10-year Strategy
(1 day, 16 hours ago)
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Baroness Neville-Rolfe (Con)
My Lords, it is widely accepted that one of the problems that besets the UK economy is the low rate of capital investment in both the public and private sectors. It must be a good thing if the Government assess what will be needed in the way of capital investment and attract resources accordingly. I accept that, for many years, policies on all sides have been less than satisfactory, and I am not in a party-political mode today.
I am in favour of having a planned programme over a planned period, such as a five-year timeframe for capital spending. I welcome the new maintenance fund. My experience in business is that it is essential to provide for maintenance in respect of all capital investments. Having said all that, we are some way from having a coherent and detailed programme for future infrastructure, with the incentives that we need for success. Against that background, which is broadly supportive, I have a number of questions for the Minister.
There remain areas of uncertainty around governance, delivery, capacity and funding. It would be helpful if the Minister could explain how and when these vital details will be revealed in future. It is really important to be clear, at a time when we are often reminded by the Government of the fiscal challenges they face, where the money is coming from.
It appears from the strategy that the Government hope that a substantial portion of this investment will come from off-balance-sheet public/private partnerships. Does the Minister recognise that this is an assumption from the Treasury rather than a hard pledge of cash? If sufficient private investment is not secured, does the noble Lord plan to use public money to fill the gap, or will the Treasury consider legislation to compel private funds to invest in government programmes—an approach that will deter investors in the UK?
Incorporating private finance into the new strategy is a welcome ambition, and I am glad to see the readiness to learn from the past. However, we must ask what changes the Treasury will make to how it engages in PPPs, given the failings around HS2, Metronet and Norfolk and Norwich hospital, to make sure we do not encounter these problems again.
Furthermore, the question that my honourable friend Richard Fuller raised in the other place was not properly answered. What proportion of the £725 billion is newly committed, as against previously announced money? As noble Lords will be aware, investment on this scale and across these timeframes must come with assurances of continuity and origin. I hope that the Minister can address these questions in his response.
The focus in the strategy is, rightly, centred on delivery. One important area in the strategy is housing. The Government have signalled their ambitious intention over the next five years to contribute 1.5 million new homes to the national stock. But the strategy actually funds 580,000 homes over 10 years through Homes England, an average of some 50,000 homes a year. Even on the lowest net migration forecast—350,000 a year—this is far below what is required each year just for migration-driven growth in housing demand. This is not the whole housing picture. However, our concern is that this offers so little net gain for current households waiting for a home. We will explore this further during the passage of the planning Bill, but I would welcome any clarification that the Minister can offer today.
Another area is aviation. The strategy and recent government announcements around aviation are welcome, both on infrastructure and on things such as aerospace redesign. However, as a recent debate in this place highlighted, limitations in the Government’s broader strategy around things such as the European geostationary navigation overlay service, EGNOS—known as the GPS on steroids—mean that these changes will have only a limited impact. Airports such as Exeter, Shoreham and Inverness previously relied on EGNOS to avoid costly infrastructure upgrades but will incur greater costs because they are no longer party to this service.
Does the Minister agree that we need to make sure that, alongside the new spending, we are pursuing non-fiscal policies that enable it to be effective? A key area is skills, which barely get a mention in the 10-year strategy. Yet I know from my time as chair of the Built Environment Committee and as a developer at Tesco that skills in construction, planning and environmental and community engagement matter a great deal. We have become increasingly short of the skills we need to build the hospitals, roads, railways, nuclear facilities, housing, prisons and water and flood defences that we need for a successful country and a successful strategy. I know from the Cabinet Office that, despite the very welcome advances in IT and AI, there is just not enough capacity in terms of skills or supply chains to build all we need. Is this something that concerns the Minister, and what plans does he have to solve the problem?
All of this speaks to the wider question of how we make sure that this money is spent intelligently to deliver value for money, and in a way that grows our economy and promotes productivity. A fundamental question is what our projected return on investment for this strategy actually is: £725 billion, albeit over a long period, is a great deal of money, so our net benefit must also be substantial in order to justify it. I hope the Minister can clear that point up for us.
A related question is: what sort of assessments went into choosing the areas to spend on? Transport spending is welcome, but is the Minister directing investment into the forms of transport that local communities benefit from the most, or does he risk further white elephants? How have the choices been made? Ensuring that we spend infrastructure money wisely, strategically and with an eye to the future is essential if we are to see the sorts of improvements in growth that the Chancellor and the whole country want. In doing so, we must target spending, combine it with wider enabling policy changes and ensure that we do not allow reforms to the Green Book and to local investment to lead to funding for white elephants.
We support the ambition behind this strategy. Long-term investment in infrastructure is a vital step if we are to address the real challenges facing our economy, our services and our communities, but this cannot be an exercise in headline figures or lofty announcements. If this plan is to succeed, the Government must show how the money will be secured, how it will be spent wisely and how it will deliver, for each project, tangible long-term benefits across the whole country—not just for now but for a changing economy and for future generations. How this policy fits in with yesterday’s industrial strategy will also be a vital consideration that we will examine carefully.
Baroness Kramer (LD)
My Lords, like my colleagues in the other place I welcome this strategy, which if well managed can significantly improve the UK’s potential for growth. My colleague, the MP Sarah Olney, who responded to this Statement in the other place, focused very much on the absence of a serious discussion of skills in the paper. She did not get a very satisfactory answer. I hope that we will hear something more from the Minister today, because that is the Achilles heel of a great deal of this Statement. However, I am going to focus not on the specific projects or on the issues that were covered in the other place but on some critical aspects of the financing.
As the noble Baroness, Lady Neville-Rolfe, indicated, the strategy proposes an updated version of public/private partnerships. I was recently privileged to chair a round table. Under Chatham House rules, I cannot tell you who was there by name, but there were leading developers, contractors and, basically, the money. To my amazement, and completely in contrast to most public statements, everyone started out by arguing against such a flawed model. Through an hour’s discussion, we identified some conditions under which a PPP could work. I will happily share that report, when it is prepared, with the Minister. The most significant condition was that the public sector has to field an educated buyer team with world-class negotiating skills, with world-class engineering, legal and financial knowledge in support. According to the people we talked to, such teams have not been in evidence.
The second most significant condition was that the projects must be specified in very fine detail, far more so than for a conventional financing and, especially if outcomes-based, allowing only for minimal variances. This condition, which many people will agree is essential for successful PPPs, seriously limits the eligible projects. I would like to hear from the Minister how much of a gap this might mean if these issues are pursued, as I hope they will be.
My second finance issue is specific to London, which will not receive government funding for much new infrastructure, even though it drives the national economy. If that is to be the case, London needs to be able to go directly to the financial markets at scale, to raise money against future value added, to build projects—and without the constraints associated with the current tax increment financing schemes, which are heavily laden with Treasury control. Once refined, this could extend to other parts of the country. I stress the urgency of dealing with this issue. London is the UK’s golden goose.
My last issue is to warn the Government again against abusing the regulated asset base as a mechanism to finance small modular nuclear reactors. In the Conservative era, the estimate that we were given on the Economic Affairs Committee for the then Government’s plans was an £80 increase to annual energy bills for ordinary people—£10 for each of eight SMRs. It was clearly an underestimate then and would be even more so now.
Does the Minister agree that the ordinary bill payer must not be treated as the stuffee—believe it or not, that is the common-parlance term—who must carry the risks and costs while others take both the immediate and future profits?
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
I am very grateful to the noble Baronesses, Lady Neville-Rolfe and Lady Kramer, for their comments and questions, and for their broad support and welcome for this strategy.
The noble Baroness, Lady Neville-Rolfe, began in her non-partisan mode, which I will try to replicate if I can. She talked first about the low rate of investment, and she is absolutely right. When we came into power, we saw the lowest rate of private sector investment as a share of GDP in the G7; we clearly have to turn that around. We saw public sector investment repeatedly cut, which is one of the reasons why we changed the fiscal rules in the way that we did, to incentivise capital investment and try to protect it from being cut to subsidise day-to-day spending. I am very grateful to the noble Baroness for her support for that investment and for the plan that is in front of us.
I am grateful to her for welcoming the maintenance fund. As we speak, there is a £46 billion backlog in the public sector maintenance of our schools, hospitals, prisons and courts. As part of this plan, we are putting £5 billion into the maintenance backlog for the NHS, £3 billion into our schools by 2030, and £600 million into courts and prisons. That is really important, so I am pleased that there is cross-party support for it.
The noble Baroness, Lady Neville-Rolfe, talked about governance and delivery capacity. I completely agree with her on the point about delivering value for money. Obviously, the strategy is not just about giving long-term certainty of investment, in terms of the numbers—she is quite right to say that—but what sits beneath them. The strategy is about trying to do things differently and to make sure that we get the strategic planning behind the investment that we are making.
That is the insight that sits behind the creation of NISTA, the National Infrastructure and Service Transformation Authority. It brings together under one roof infrastructure expertise combined with the policy and strategy insight of the National Infrastructure Commission and the delivery specialism of the Infrastructure and Projects Authority. Every two years, it will do a report into the delivery of this strategy. It will give Ministers real-time advice and expertise on specific projects. I hope that that goes a long way to solving some of the issues that the noble Baroness talked about.
The noble Baroness also talked about where the money is coming from. The announcements, as part of the spending review envelope, were fully funded and fully costed as part of that process and are within the current fiscal envelope. Beyond that, we have said that we will guarantee that investment spending will grow by at least inflation for the period beyond the spending view for a total of 10 years, which gives people certainty about the level of infrastructure investment that we are making.
The noble Baroness, Lady Neville-Rolfe, talked about PPPs, and the noble Baroness, Lady Kramer, also talked extensively about this. I agree with a lot of what she said and respect her great expertise on this matter. She talked about the criteria for success, and lessons clearly need to be learned from our previous experience of PFIs and PPPs. The Government are absolutely committed to that. There are several reports now available to us; the NAO’s lessons learned report, for example, provides vital information on what we can do differently and can do better.
The noble Baroness, Lady Kramer, said that, once you apply those criteria, it severely limits the number of projects for which you can use PPPs. To answer the question from the noble Baroness, Lady Neville-Rolfe, I do not think that this is about huge, widespread use. We clearly want a widespread degree of private sector capital coming in and financing infrastructure, and we want to continue to invest alongside the private sector and the private sector to step up and fund things.
We see a role for PPPs but in a very limited way and where their role will clearly be appropriate. We have said specifically that we will explore the feasibility of using new PPPs—learning lessons and applying the right criteria—for taxpayer-funded projects in very limited circumstances where they could represent value for money. We have given two specific examples where we think they could do that. One good example is Euston—the HS2 station—where we will investigate the use of PPP models for user-funded infrastructure. The other is the Lower Thames Crossing, where, again, we think there is the potential for the criteria that the noble Baroness mentioned to apply. There are a limited number of examples but those are two where there is a clear case to be made.
On housing, I completely agree that 1.5 million new homes is a stretching target. It absolutely remains our commitment and we think we are on course towards achieving it. We put a record amount of funding—the greatest for several generations—into social housing. The noble Baroness is clearly right that the potential occupiers want that housing now, which is why that funding has gone in. She wanted reassurance, and I can say that we firmly believe that we are on course towards that housing target.
Both noble Baronesses talked about skills, and I completely agree. It is good that we are in the spirit of consensus and cross-party thinking here. Obviously, with these commitments, it is absolutely right that we need people to build the things that we want built. Clearly, we can always do more, but we have made a strong start. We have made a record commitment to invest in skills—£1.2 billion of additional investment per year by 2028-29 to support current and future workforce needs.
I know that we are in a cross-party mood, but I have to reflect the fact that the degree of underfunding that we inherited was substantial. We had to put in significant amounts of money—billions of pounds—just to stand still and just to plug the gap that existed between needed provision and the funding that was there. Having to plug that gap limits the extent to which we can move forward.
However, we have provided funding to support over 1.3 million 16 to 19 year-olds to access high-quality training—some 65,000 additional learners per year by 2029. The spending review has delivered £625 million to train up to 60,000 construction workers. In the industrial strategy yesterday, we announced that we will introduce new short courses for priority skills as part of the growth and skills levy, continue to roll out foundation apprenticeships and deliver a targeted package for engineering skills. We have specific packages for engineering and construction, both of which are priority occupations in the infrastructure strategy and the industrial strategy.
How do we choose the investment? We always talk about growth, and I think noble Lords can see that much of this investment is targeted towards the sectors that will, I hope, really drive our growth agenda—transport, energy and housing just to name three.
On the questions about London from the noble Baroness, Lady Kramer, I cannot give any commitments today on the future financing model, but I completely share her support for London and her reflection of it as the golden goose. Future investment in London will be central to driving the economy.
Lord Wigley (PC)
My Lords, I join the cross-party consensus on the issue of skills. The Minister referred to the 16 to 19 year-old skills requirement age group. Does he also accept that, if we are going to successfully get investment into sectors such as the energy sector, which is a key part of the development the Government have in mind, the university sector must also get the resources that are needed? In view of the cutbacks that have taken place in the university sector over recent years, can the Government, in co-ordination with the devolved Governments in Cardiff and Edinburgh, look particularly at this sector in order to get the resources in? We need action now. It will take three to five years before those people come out the other end, and we need them desperately to drive the scheme forward.
Lord Livermore (Lab)
I completely agree with what the noble Lord said about the importance of that sector. He mentioned the example of the energy sector and, as I said, we have, in the industrial strategy, made an investment into engineering skills, which are particularly important in that sector. I hear what he is saying and we will keep driving towards what he wants us to achieve.
Lord Birt (CB)
My Lords, the Minister may recall that I spent six years at No. 10 as Tony Blair’s strategy adviser. I spent a year of my time there, with the team of officials, looking at national transport infrastructure—road and rail. We quickly identified that we have by far the worst road and rail infrastructure of any major country; it was very easy to demonstrate. We went further and looked back—I cannot recall the precise term; I think it was 70 years, although it might have been slightly less—at national investment in infrastructure of all kinds over that period. It was the same story: we spent a smaller proportion of our GDP than any major country. Under both main parties, again and again, on every occasion when the economy went into slight reverse, national investment in infrastructure was cut back. Will it be different this time? Does the Minister know what proportion of GDP over this 10-year period is implied by this plan? If he does not, perhaps he will write to us.
Lord Livermore (Lab)
I can definitely say yes to one of the noble Lord’s questions, which I am pleased to be able to do. He talked about making sure that this investment is not cut back according to the economic weather, as it were. I completely agree with what he said about how previous Governments did that. That is why the fiscal rules are as they are. That creates the space to ensure that capital investment can continue and is not used to patch up day-to-day spending. That is important for us to appreciate.
The noble Lord is absolutely right that there has been too little investment in transport infrastructure in the past. We have talked before in debates such as this about the importance of connectivity to economic growth and the agglomeration effects that you get from joining up cities with each other, and joining up towns to cities. This ensures that people can live close to where they want to work and can travel to work and, on the skills conversation we have just been having, gets skills into the right place. There are huge growth benefits from transport spending. Some of the money that we are putting in—£15.6 billion into the city regions, £2.3 billion for the local transport grant and £2.2 billion of funding for Transport for London—is vital to what we were just saying. On the percentage of GDP, I do not have that number to hand, but I will write to the noble Lord.
Viscount Stansgate (Lab)
My Lords, the Government’s 10-year infrastructure strategy, and the industrial strategy published yesterday, are essential for future growth. If I had to single out one item in the 10-year strategy, it would be to develop our sovereign compute capacity for the future. I am a member of the Science and Technology Committee of your Lordships’ House, which is looking right now at the problems of scaling up science and technology companies. Can my noble friend the Minister assure the House that the National Wealth Fund will be able to provide vital early-stage development support for companies, because we want them to scale up in Britain for the benefit of Britain?
Lord Livermore (Lab)
I am grateful for what my noble friend said. I share his enthusiasm for what we are doing in the innovation landscape, such as putting a record high of £22.6 billion into R&D as part of the spending review. It is exciting that yesterday the industrial strategy talked about allocating £2 billion for AI and £2.8 billion for advanced manufacturing. This is all incredibly important.
What my noble friend said is absolutely part of what the National Wealth Fund is for. My noble friend talked about start-ups and scale-ups. The British Business Bank now has a total financial capacity of £25.6 billion, which will result in a two-thirds increase in support for innovative UK businesses compared with 2025-26, crowding in tens of billions of pounds more in private capital The National Wealth Fund will play that role, but so too will the British Business Bank. That was one of the key announcements in yesterday’s industrial strategy.
Lord Harrington of Watford (Non-Afl)
My Lords, I shall do my best to comply with the spirit of cross-party consensus day. I should first declare from the register that I am chairman of Make UK, which has more than 20,000 member companies in manufacturing and infrastructure. I commend the Government on this 10-year infrastructure plan and yesterday’s industrial strategy because I did a review for the previous Government on foreign direct investment. Lack of consistency of policy was the number one item, and the others were connection to the grid, planning and other delays.
I want to ask the Minister about monitoring implementation. For the main industrial strategy, the Government have quite correctly set up an industrial strategy council where each sector—life sciences, advanced manufacturing, et cetera—has groups to monitor the implementation of the industrial strategy. The infrastructure plan is very complex; it includes skills, access to finance and, of course, energy and very large things. What mechanism will be used to independently monitor its implementation?
Lord Livermore (Lab)
I am grateful to the noble Lord for the positive things that he said. I pay tribute to him and to Make UK for the work that they do. Clearly, the skills conversation that we just had is vital in that sector. Make UK always makes the point to me about the vital importance of engineering skills, so I hope that that is welcome.
The noble Lord did indeed do his review into foreign direct investment. I hope he does not think that it was just for the previous Government; we still talk about it now in this Government. A lot of the recommendations that he made in that review are things that we have been trying to take forward in this Government. That is a good example of the cross-party working that we have been discussing today.
The noble Lord is right that the industrial strategy will be taken forward by the industrial strategy council; that will be put on a permanent footing, which I think is important. His question is about the equivalent for this strategy. That is the National Infrastructure and Service Transformation Authority—NISTA—which I was talking about. It will monitor the strategy and help the Government to implement it. It will do two-year refreshes of this strategy to make sure that it is up to date and doing what it needs to do. Crucially, it will provide real-terms advice to Ministers when it comes to individual projects to make sure that we have the expertise that we need at our fingertips to be able to implement them.
Earl Russell (LD)
My Lords, we on these Benches very much welcome this report. Of course, after decades of underinvestment, it is essential to ensure that our country can operate appropriately.
I will ask the Minister about infrastructure and adaption and resilience to climate change. Our climate is changing before our very eyes. In a number of places in this report there are vague promises to do things, not firm commitments. To pick up one example, although we welcome the £7.9 billion of capital for a new 10-year flood investment programme, the report says that the Government will merely “explore” setting a long-term, multiyear target for flood risk management in line with prior recommendations made by the NAO and the NIC. Will the Government go further on these things, recognise the speed at which climate change is happening, and put more effort into ensuring that we have the best policies in place?
Lord Livermore (Lab)
I agree with the noble Earl on the importance of investment in net zero and measures to tackle climate change. From a growth perspective, it is not one or the other for those investments; they go hand in hand.
I do not quite agree with the noble Earl’s view on the vagueness of these commitments. We are putting real money behind real projects: £14.2 billion into nuclear; £9.4 billion into carbon capture and storage; £80 million of investment in ports to support floating offshore wind; and £13.2 billion for the warm homes plan. This is a huge amount of investment into real concrete action to move us forward. We were talking before about getting people on to public transport—for example, in relation to take-up of EVs. Action is going on across the board on the measures that he talked about. I am grateful to him for his support on that.
Lord Dodds of Duncairn (DUP)
I very much welcome the strategy that the Minister relayed to your Lordships’ House. However, I refer him to the decision yesterday in the Northern Ireland High Court, which struck down the Northern Ireland Executive’s major flagship project from the Department for Infrastructure—a £1.7 billion upgrade to the A5 to save lives and improve economic connections throughout Northern Ireland and with the Irish Republic. It was struck down because it was contrary to another part of the Northern Ireland Executive’s overall strategy programme for government. Is this something on which the new NISTA, which sits within the Treasury, could assist the Northern Ireland Executive? They certainly need help from somewhere if they are going to be able to deliver major infrastructure projects in the light of this very serious judgment.
Lord Livermore (Lab)
I am grateful to the noble Lord for the question and for bringing that to my attention—I did not know about that decision. I will very happily go away and look at that. We have tried to engage extensively with the devolved Governments to ensure that there is strong alignment between the strategy and what they are doing. We will continue to do that as we move into implementation, for example through the Council of the Nations and Regions. I am happy to go and talk to my colleague the Chief Secretary about how NISTA can play a role to secure that. We have put substantial amounts of capital investment into Northern Ireland as a result of the spending review. Clearly, we want to make sure that that is spent in the right way and achieves the right objectives, so I will very happily take that back for him.
Baroness Young of Old Scone (Lab)
My Lords, I welcome the Statement from the Minister about a much more joined-up and rational approach to infrastructure. It has been long called for and is very much welcomed. I also welcome NISTA’s commitment to ensuring that infrastructure developers are going to take account of biodiversity protection and delivery. I was delighted when NISTA’s predecessor discovered climate change, and the fact that it has now discovered biodiversity is even more welcome.
I also am very pleased to see that the Government are committed to the land use framework approach to spatial issues. But a fair number of existing infrastructure schemes are already in progress and decisions are being made on a day-by-day basis, and government departments across the piece are now preparing spatial strategies of all sorts. We have housing spatial strategies, transport spatial strategies, energy spatial strategies—everybody has a spatial strategy, but we have not yet got the land use framework in place that gives them join-up and integration. So when do the Government intend to make their hand clear on the land use framework approach? I am concerned, as I said, that by the time it arrives and is then implemented at national, regional and local level, it will be too late for many of the decisions on infrastructure that are currently being made.
Secondly—and more of this anon, tomorrow—in my view, the Planning and Infrastructure Bill does not take a sufficiently clear approach to a land use framework approach. In fact, any concept of land use framework is singularly absent in the Planning and Infrastructure Bill, which seems not to be as joined up as this admirable strategy is. Perhaps the Minister would care to respond on that.
Lord Livermore (Lab)
I am grateful to my noble friend for her support for NISTA and the spatial planning elements of that. I do think that the spatial side of that is really important, as she says, to make sure that infrastructure is not just built in isolation but focuses on building communities and looks across the piece and integrates national, regional and sector-level planning. I do not have any news for her today on the land use framework, and I certainly hear what she says about the Planning Bill. I do not have anything to add today to what is already known, but I will make sure that, when we do, she is one of the first people to know.
Baroness McIntosh of Pickering (Con)
My Lords, I congratulate the Government on bringing forward the 10-year strategy. It has managed to put a smile on the Minister’s face, which is very welcome indeed. In the interests of transparency and clarity, can I ask him what the route for the trans-Pennine route upgrade will be and what consultation there will be? There seemed to be some confusion in an interview last week from the Minister responsible as to what the route would be. It would be very helpful to know. It will be a very welcome upgrade. I regret that it has not taken precedence over HS2 or HS3, but we are where we are. Also, can he comment on the implications of clean energy? To be fully understood, it is going to take 10% of farmland and 10% of fisheries out of production. Have the Government considered what the impact on farming and fisheries is going to be?
Lord Livermore (Lab)
I am grateful to the noble Baroness for the smile; it is always most welcome. On the route of the trans-Pennine route upgrade, she spoke about the importance of transparency. I think the best thing will be to write to her and set it out in full, so that there is no misunderstanding.
In terms of farming, I hope she welcomes the £2.7 billion per year in sustainable farming and nature recovery. I think that is a very substantial investment in the things she spoke about.
Baroness Bennett of Manor Castle (GP)
My Lords, there have been a number of references to NISTA, the National Infrastructure and Service Transformation Authority. The Statement says:
“Based in the Treasury, NISTA brings oversight of infrastructure strategy and delivery together, and integrates assurance, design and delivery assessments”.
The Treasury is not the expert in transport, energy or social housing infrastructure. Many Members of your Lordships’ House often lament the dictatorship of the Treasury over other government decisions. Is this not a further concentration of power within one department in government, when actually we need the people with the expertise and knowledge to have the oversight, not this concentration in the Treasury?
Lord Livermore (Lab)
Well, the noble Baroness might not expect me to agree with her on that; I think the more Treasury, the better, from my point of view. So, no, I disagree with her, but of course NISTA is there to work for the whole Government and not just the Treasury. It has to be based somewhere and it makes sense for it to be based in the Treasury, given the Treasury’s responsibility for the 10-year infrastructure strategy, which it will be overseeing. Of course, NISTA’s expertise will be available to Ministers right across government.
Lord Macpherson of Earl’s Court (CB)
My Lords, I congratulate the Treasury on this plan, which is well thought through. If the economy is going to grow, we have to ensure that public investment grows faster than public consumption. That is reflected in the Government’s plans. But, like my noble friend Lord Birt, I worked for Governments of both main parties who announced investment plans with great fanfares and good intentions, only to jettison them the first time they got into difficulty. That happened in 1976, 1992, 2008 and 2016. The Minister mentioned that fiscal rules this time will see us right but, as he knows, fiscal rules come and go. Can he assure the House, especially the sceptics among us, that, should the Government get into financial difficulties, they will protect investment, even if that means bearing down on public consumption?
Lord Livermore (Lab)
I am grateful to the noble Lord—I was going to say “my noble friend”—for his question. The fiscal rules are non-negotiable, as he will know. We have put them in place for exactly the reasons he described. Too often in the past, public investment has been cut to patch up holes in day-to-day spending. The reason we are setting out this 10-year plan now is to give certainty and stability to the investment horizon, and we will protect that investment going forward.
Lord Brooke of Alverthorpe (Lab)
My Lords, I will briefly go back to a subject I have raised several times with the Minister before—PPPs. I welcome pages 44 and 45 in the report, and I also share the interesting views expressed by the noble Baroness, Lady Kramer and look forward to the report that is coming. I am content to leave the issues with the Treasury. Perhaps the Treasury might expand its vision a little bit wider and, when we come to review the future PPPs, we might think about involving the public in them and not limiting private investment simply to big capital. There is money around among the public. People are prepared to invest. We ought to be more open-minded about it and perhaps look at some of the experiences of the past. There will be money there for us and it will be committed.
Lord Livermore (Lab)
I am grateful to my noble friend for his support for this. I am pleased to give him some good news as part of this, because I know he has spoken extensively about the use of PPPs and is a strong advocate for that. As I said, the Government will explore the feasibility of using new PPP models for taxpayer-funded projects in the limited circumstances I talked about. As NISTA’s work goes forward and develops these new PPPs, it will be through engagement with departments and industry. I hope some of that engagement will include the groups my noble friend referred to.
Employment Rights Bill
Tuesday 24th June 2025
(1 day, 16 hours ago)
Lords ChamberEmployment Rights Bill 2024-26 View all Employment Rights Bill 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 81-XI Eleventh marshalled list for Committee - (20 Jun 2025)
Lord Hunt of Wirral
“Impact on new business entrantsThe Secretary of State must, within 12 months of the day on which this Act is passed and annually thereafter, publish an independent assessment of how this Act affects new business entrants and small start-up enterprises, particularly regarding the impact of increased administrative or financial burdens on market entry and growth.”
Lord Hunt of Wirral (Con)
My Lords, I shall speak to amendments 310, 311, 312 and 319.
If I may start with Amendment 311, I stress that productivity is vital for growth. The Government’s own impact assessment of the Bill is lacking in many areas, but it correctly identifies productivity as a problem in the UK workforce and reveals the fundamental weakness of their approach. They state quite explicitly:
“there is little quantitative evidence about the knock-on impacts on productivity”,
and conclude:
“On balance, we believe the impact on growth could be positive … but the direct impact would be small in magnitude”.
Most tellingly, they admit that
“the impact on average productivity will be small”.
To paraphrase, the Government seemingly admit that productivity will not be significantly improved, if at all, by this legislation. This raises a fundamental question that goes to the heart of economic policy: how does one achieve high levels of productivity?
High productivity emerges through competition—genuine, unfettered competition—where businesses face lower regulatory burdens, can compete effectively for the best workers and possess the freedom and flexibility to innovate, to adapt and to respond to market signals. Productivity growth stems from technological innovation, capital accumulation and, as we have just heard in the questions on the previous Statement, investment in skills and productivity—skills above all. These improvements occur naturally when markets are allowed to function, when competitive pressures incentivise businesses to innovate or perish and when the price mechanism can operate without distortion.
Competition drives productivity by creating what economists call “creative destruction”—the process whereby inefficient firms are displaced by more productive ones. When businesses have to compete for workers, they invest in training, technology and better working conditions. When they have to compete for customers, they innovate and improve efficiency. When they must compete for capital, they demonstrate their productivity gains to investors and offer competitive returns.
So what will this legislation achieve in practice? I regret that it will impose additional regulation, create additional burdens and constrain the very competitive forces that drive productivity improvements. This of course comes on top of the tax rises announced by the Chancellor—measures that undoubtedly constrain business investment and growth. The increase in national insurance contributions is particularly damaging in this context. Higher employer NICs directly squeeze the possibility of productive investment. Investment that would otherwise create jobs in productive areas of the economy will now not take place. Capital that could have been deployed to improve productivity, whether through new technology, training programmes or research and development, will instead have to be diverted to meet higher tax obligations and burdens. This represents a fundamental misunderstanding of how productivity improvements occur. Productivity does not increase through regulatory mandate or government directive; it increases when businesses have the freedom, the incentive and the resources to invest in productivity-enhancing activities.
This brings me to Amendment 319 and what I can only describe as a profound contradiction in government policy. The Government committed just months ago to a 25% cut in the regulatory burden. They reaffirmed this, as we heard, in the published industrial strategy. Yet here we have legislation that introduces what can only be described as a raft of new regulatory burdens. The question that demands an answer is this: how will the Government achieve this 25% reduction in the regulatory burden? How will it be measured? How will the Bill, which manifestly increases regulatory compliance costs, align with that stated target?
I turn to Amendment 310. A truly competitive market must make it simpler, not harder, for new businesses to enter. Yet there is no consideration in the Government’s impact assessment for how this legislation affects barriers to entry. I believe that this represents a profound oversight because, when businesses cannot enter a market because of costs imposed by government regulation, that fundamentally alters the competitive dynamics driving productivity improvements. The economic logic here is straightforward but crucial: when entry barriers are low, existing businesses face constant competitive pressure from potential new entrants. This pressure has to keep them on their toes, forcing them to remain productive, innovative and responsive to consumer needs. They cannot afford to become complacent because they know that more efficient competitors could emerge at any time, hot on their heels and full of competitive energy. But when government policy raises the cost of market entry through complex regulations, compliance burdens or increased operational costs, it can effectively insulate existing businesses from this competitive pressure. The result is predictable: established firms have less incentive to innovate, less pressure to improve productivity and less need to compete aggressively for the best workers.
Turning to Amendment 312, I come to a particularly important point about wage competition. In a competitive market, businesses compete not only for customers but also for workers. When entry barriers are low and competition is fierce, employers must offer competitive wages and working conditions to attract and retain talent. This competitive pressure naturally drives wages upward as businesses bid for the best employees. When regulatory burdens prevent new businesses from entering the market, however, this wage competition diminishes significantly. Existing employers face less pressure to offer competitive wages because workers have fewer alternative employment opportunities. The reduced threat of labour mobility gives established businesses greater power in wage negotiations.
I believe that the costs imposed by this Bill will exacerbate this problem in two distinct ways. First, the direct compliance costs and increase in employer national insurance contributions will pressure businesses to control their wage costs more tightly. Secondly, and perhaps more importantly, these costs will deter new business formation, reducing the competitive pressure that would otherwise drive wages upward. Of course, the Government may want to point to the increase in the minimum wage as evidence of their commitment to higher wages, but that misses the fundamental point about how competitive markets operate in practice. The minimum wage affects only a small proportion of the workforce—those at the very bottom of wage distribution; for the vast majority of workers, wages are determined by market forces and competition between employers for their services.
Baroness Lawlor (Con)
My Lords, I support this group of amendments in the name of the noble Lords, Lord Sharpe of Epsom and Lord Hunt of Wirral, calling for an impact assessment requiring an independent analysis on different measures. I have added my name to three of them. Amendment 310 asks for an impact assessment on business, new entrants and start-ups, while Amendment 311 asks for a productivity impact reporting, and Amendment 319 asks for a new clause on assessing the impact of the regulatory burden on businesses.
Amendment 310 would require an impact assessment on new business entrants and small start-ups, including the impact of administrative and financial costs. Why do we need this? We know from ONS data that the story of business start-ups from 2016-17 to 2023-24 was one of steady increase, from 664,750 new start-ups in 2016-17 to 800,000 in 2022-23. We know from other data, from an analysis for NatWest bank and the Beauhurst Group, that for the last calendar year 846,000 new businesses were registered, bringing the total to a record high of 6.63 million last year. Just under one-third of that, 248,000, in the first quarter was, sadly, a figure not sustained by the end of the year, with a 25% drop in business formation as the year progressed.
Of course, headline figures should be read with caveats entered. Here are just three. Quite a few new companies do not survive their first or indeed their second year. One tech and computer entrepreneur once told me that you would expect in his sector at least one or two failures until you got to a success; it was almost the necessity to fail that brought success. Difficult circumstances, such as an economic slowdown due to exceptional causes or external shocks, may have an impact on new start-ups taking off. Indeed, some companies will simply be reformations of existing organisations and businesses.
These may be the ordinary reasons why we see start-ups not doing so well, but one common obstacle to getting a new business off the ground or making a success of it is the burden of too much of the wrong—and unnecessary—regulation. The Government and the public will need to know the impact of this measure, after a year or at a period to be agreed between the Government and opposition parties, to see whether the decline in new applicants that we saw at the end of 2024 will continue in the first year of operation and, if so, what steps we may need to take to mitigate this. New businesses are our lifeblood. They help replace the stock of zombie businesses which go out of business and rightly fail in the competitive economy to which my noble friend Lord Hunt alluded.
This Bill, as others which the Labour Government have proposed or enacted since 2024, penalises employers and businesses and introduces a device of damaging politicisation and ideologically driven changes to favour certain vested interest groups over the interests of business, the whole UK economy and the people of this country, who depend on a strong, prosperous and competitive economy to find and keep a job to pay their bills and to pay the tax revenue on which their public services depend.
The Bill’s burdens on all will impose a multitude of additional costs—through employee rights without corresponding obligations or duties, and additional duties and costs on employers—uncertainties, as many of the proposals in the Bill will be decided by regulation, and costs to businesses trying to plan. They weigh the law against and involve cost and compliance burdens for an employer or business, as my noble friend has explained, not only in respect of the rights of employees but through procedures that vary from record-keeping and handling equality action plans in Part 2 to the new law on industrial relations, which is in favour of trade unions and changes or repeals measures that have been around since 1992 and, by and large, have brought peace and harmony to the labour market of this country and the prosperity we need.
These burdens will make for grave uncertainty, given the range of powers that will be exercised, as I have mentioned, by a Minister who may reflect the ideological bent of the current Government to direct their powers against business, employers and the UK economy in favour of those who pay for the Labour Party through political funding—we have had many a debate on that in this Chamber. They are to be finalised through consultation and announced later. Surely, it is not too much to temper such militancy by giving the public and the Government of the day an analysis of what the costs of the regulatory burdens will be so that any adverse impact can be measured and mitigated.
Amendment 311 calls for an assessment of the impact of the Act on productivity. My noble friend has said that the Government recognise in their own impact assessment that the productivity gain will be small. UK productivity is already significantly lower than that of our competitors in the G7—the US, Germany and France—but we will discuss international competitiveness later so I will not speak on that now. However, as a result of this Bill, we expect productivity to decline further by sector and by employee. We know that around 70.9% of workers in the UK work in firms with labour productivity below the mean. It is very difficult to envisage that productivity will increase as a result of the regulatory burdens in this Bill.
If growth is the aim of this Government, we need to increase productivity dramatically. This will not be achieved through an ever-shrinking workforce and the contraction of business activity; at my last count, our labour market had lost 115,000 workers since this Government came to power. Nor will it be achieved by burdening business—and, as my noble friend Lord Hunt mentioned, its capacity to invest in new people, plant and technology—by increasing the money needed to pay for the extra compliance and regulatory costs of this Bill, rather than investing in the production of goods and services, and the training of the people who produce.
I support this amendment, as I do the others, so that we shall have a real measure, based on independent, impartial data, that will shed daylight on the impact of the Bill on these three counts and help the people of this country—and the Government—to press for change, should we need it.
Lord Deben (Con)
My Lords, I remind the Committee of my interests in both consultancy and the hospitality industry. I have really come to help the Government on this bit of the Bill, because the problem they have is that very few of those who are working on the Bill run businesses. I have run businesses all my life, except for the time when I was a Minister, and, as I read the Bill, I am very concerned that it has been written by people who have not run businesses. They do not understand the damage that they do to employment and new business. I hope every Minister will admit that to themselves, whether or not they have run businesses and met these problems. Have the civil servants who advise them, or the political advisers from their parties, run businesses and seen these problems for themselves? If the answer is “Not much”, “Not many” or “Not overall”, surely they ought to see whether they have got it right.
Frankly, I do not think they have got it right, but I am very happy to be proved wrong. I do not think they have got it right because I know what has happened in the businesses with which I am associated. I know that we are employing less, because that is the only way we can pay the increased demands on employers. I know that the balances that we have to make now are not to the advantage of staff recruitment. Above all, I know that if I were starting a new business, the temptation not to do so would be very much greater because of the complications that the Bill, and previous actions of the Government, place on us.
That puts me in a position in which I do not think the Bill is, in large measure, a good one. But I am prepared to be proved wrong if, by clear investigation, we look at the results of what happens and take account of it. The problem is that if this Government are going to carry out effectively many of the policies with which I agree—more than I agree with some of the policies on this side of the House—they must prove to the public that they listen and are prepared to look at the facts.
I came to this debate to plead with the Government not to say, “Oh well, this is what we are told by people and we think it is a good idea. It fits in with our obligations and our attitudes”. Instead, they might say, “We will argue in both the House of Lords and the House of Commons, and at the end of it we will see whether we were right. We will see whether the Opposition were right or we were. If we show we are right, we have a really good position to say to the public, ‘There you are, we said we were right and we have been proved right’”. They might say now that they are not even going to find out whether they are right, not going to measure it and not going to accept these amendments.
The noble Baroness, Lady Lawlor, and I disagree on most things. Both of us, though, think that it would be a good idea to check to see where we are. I do not understand why representatives of the trade unions are not getting up and saying to the Government, “Look, we think we’re right and we think you’re right, so check it and independently show that it is right”. Instead of that, the Government are admitting, frankly, either that they do not know or that they fear they would be proved wrong. I want a Government who are brave enough to say, “We’ll actually put it to the test. We’ll actually accept these amendments and we’ll find out who’s right. If we’re wrong, we’ll change it. If we’re right, we’ll crow like mad over those people who told us we were wrong”.
Baroness Verma (Con)
My Lords, I agree with almost everything that my noble friend said. When I was growing up, my father, who was in business, suffered the three-day week, and I understand the impact it had on his business and many like his. I also understand that productivity needs to be improved and increased. We need to look at what is happening across the world to be competitive enough.
I know that the Minister, the noble Lord, Lord Leong, has a business and understands business. If he were sitting on this side of the Chamber, I suspect that he would be arguing in the same vein as we are. It would be right and proper not to shirk away from proper impact assessments and proper comparative assessments of what is happening across the world, because we all want a competitive country where we are leading at the helm. Denying and disagreeing just for the sake of denying and disagreeing does not do this debate any good.
Baroness Fox of Buckley (Non-Afl)
My Lords, unusually, I completely agree with the remarks of the noble Lord, Lord Deben; he and I are both surprised by that. That is not because I am a business owner—that has never been my shtick—but because I am worried about the unintended consequences of the Bill. I too simply want an opportunity to check—and if I am wrong, that is fine.
This group of amendments is very important because it will give the Government a chance to think again, to assess and to reflect. It does not have to be a U-turn; it can straightforwardly be something that is accepted at this point in the Bill that would then mean that those of us who are nervous about the Bill’s consequences can be proved right or wrong.
I am particularly concerned about the impact the Bill will have on productivity, and Amendment 311 is therefore key. I am concerned that the Bill is not doing what it says on the tin and will have a diametrically negative impact on workers’ rights, jobs and wages. I am interested in Amendment 312, which simply asks for real wage impact reporting.
Of course, the big amendment that would cover all the things that have been argued for so far is Amendment 319, which calls for an impact assessment of the regulatory burden of the Bill on businesses. In the past, people who have complained about overregulation have been considered to be on the right of politics—the idea is that those people are so irresponsible that they do not want any regulations and are prepared to take risks. I have never understood it like that at all.
I was therefore delighted to find that I agreed with the Government and the Prime Minister, Keir Starmer, when he made some tub-thumping speeches about the problems of
“the regulators, the blockers and bureaucrats”
stopping investment and growth. He called them an “alliance of naysayers”, which I thought was good, because I have always been worried about this. I am not from the Tory fold, but that goes along with what I thought. I was genuinely excited that the Labour Government were embracing this way of understanding what can get in the way of economic development and growth, which is necessary for workers to have jobs, wages and rights under an industrial policy that we are hearing about today—all the infrastructure things.
Last December, the Prime Minister infamously blamed Britain’s sluggish growth on
“people in Whitehall … comfortable in the tepid bath of managed decline”.
As we have been going through the Bill, I have felt like I am in the tepid bath of managed decline at the heart of Whitehall and Westminster. Therefore, I urge the government representatives here to remember their own Prime Minister’s words when deciding how they should approach the Bill, rather than just being partisan.
Between 2015 and 2023, the Conservative Government set themselves the target of a £19 billion reduction in business costs through deregulation. Instead, the Regulatory Policy Committee watchdog calculated that even exempting most Covid regulation, the regulatory burden increased by £18.4 billion in that period. I am saying this because people keep declaring that they are going to tear up the regulations getting in the way of growth, industrial capacity and so on, and then, the next minute, unintentionally, regulations grow. The Bill is so jam-packed with regulations that workers’ rights do not stand a chance of breathing.
One of the fears I have about the Bill, which I have raised in a number of amendments and which I hope Amendment 319 will address, is that it is a recipe for huge amounts of lawfare. Day one rights and protection from unfair dismissal both sound progressive and admirable, but the Government’s own analysis predicts a 15% rise in employment tribunal claims. There are already huge backlogs of between 18 months to two years, even before the Bill is enacted, so there is a real threat of a litigious clogging up of the system. Of course it is important that employees are treated fairly. As I have argued throughout consideration of the Bill, I am not frightened of trade union and workers’ rights at all, but I am concerned about this growth, encouragement and incentivisation of the use of lawfare.
I have just read a fascinating report, which I will send to the Ministers, entitled The Equality Act isn’t Working: Equalities, Legislation and the Breakdown of Informal Civility in the Workplace, produced by the anti-racist, colourblind organisation Don’t Divide Us, which assesses the unintended consequences of the Equality Act. Nobody thought this would happen, but it has led to a real fractiousness in the workplace: people are suing each other, all sorts of things are going wrong, and, in many ways, it has clogged up the system. The last thing we need is the Bill adding to that burden, leading to lawfare and people taking matters even further by suing each other.
Either an impact assessment is going to show that some of the concerns raised are overhyped, or in some instances ideological or raised by nay-sayers; or the Government can take the opportunity to say, “We never intended the legislation to do this, but we have seen that in some areas, it needs to be tweaked to make sure that it is not over-regulatory, damaging workers’ rights and wages and so on, in which case we are prepared to be honest and hold our hands up”. That is the very least legislators should do when they introduce a law that is going to bring huge change the whole business and workplace arena.
Lord Swire (Con)
My Lords, as somebody who does business from time to time and tries to encourage business, not least through my deputy chairmanship of the Commonwealth Enterprise and Investment Council, which is trying to grow business right across the Commonwealth, it strikes me that the Bill comes at an unfortunate time. Of course, we should always look at regulation, and there will always be an argument about what is over-regulation and what is under-regulation. But at a time when so many jobs are threatened by AI, we should surely be looking at a low regulatory framework. I urge the Government to take this into consideration during any impact assessment.
The Minister knows about business. He is a businessman and has a successful business, and I too suspect that he identifies with many of the points we are raising, although he cannot say it. But it strikes me that, just at a time when people are very fearful about their future and the uncertainty of having a job at all, let alone when they get older, so they can raise a family, have a mortgage and so forth, we should be looking at ways to encourage businesses to employ more people. The noble Lord, Lord Deben, said that he saw every good reason not to employ more people. That is really bad news. If businesses are now saying it is simply not worth the candle, that will contribute to the unemployment that will surely follow as many of these jobs are replaced by AI anyway. So I urge the Government to look at that.
Equally, at a time when many countries around the world, not least in Asia, are spending much more money, time and effort on advanced mathematics and the other things you need nowadays for coding and so forth, we in this country seem to be lowering the standards, particularly in mathematics—dumbing down at a time when we should be raising up. So by all means, let us properly protect our workers, but let us not overregulate to the extent that we do not have any workers to look after or to regulate.
Lord Palmer of Childs Hill (LD)
My Lords, I will address Amendments 310, 311, 312 and 319, which collectively seek greater transparency on the economic consequences of this legislation.
Although I am afraid that I take no firm view on the amendments themselves, which were explained in great detail by the noble Lord, Lord Hunt, and spoken to by other noble Lords, who expressed reservations—obviously, there are reservations—I welcome the principle that they reflect: that we must remain vigilant as to how new laws affect businesses, wages and productivity. No one else has said this, but I appreciate that the Government are already undertaking much of this work, and I would welcome an update from the Minister on how that work is progressing and informing policy development.
Amendment 310 raises a valuable and timely question about how new and small businesses might fare under the Bill. As the noble Lord knows, and as I know from a working lifetime as a chartered accountant, these enterprises often lack the resources, legal support and regulatory expertise of larger firms. It is only right that we ask whether the framework we are putting in place enables them to enter the market, grow and succeed on fair terms.
If the Government are serious about delivering long-term economic growth, they must pay close attention to the conditions facing new business entrants and small start-ups. These businesses, as I hope the noble Lord will agree, are not only a vital source of innovation and competition but key to job creation, skills development and regional regeneration. The barriers they face—and there are increasing barriers—whether through opaque processes or disproportionate compliance costs, can limit their contribution to the economy. By reducing unnecessary administrative burdens and ensuring a fair and accessible regulatory environment, we can help unlock their potential.
Growth will not come from productivity targets or ministerial ambition alone; it will depend on everyday decisions, as the noble Lord, Lord Deben, mentioned, made by entrepreneurs and small business owners around the country. We should support them accordingly. As mentioned previously, I do not readily back these amendments themselves—I do not think I agree with them—but I hope the Government will take careful note of the arguments they raise, particularly the point made in Amendment 310 about the effect on new and small businesses, which deserves further attention and consideration.
There are going to be economic consequences of this part of the Bill, and the Government should tell us how they view the impact of those. Noble Lords have spoken about increased costs. We all know—anyone who has been involved with business knows—that there will obviously be increased costs. Laws that we have put in over the years have added to those costs, but most businesses have managed to increase efficiency to try and mitigate them and make more profits. You have to adjust to what is happening in the world.
These amendments, and this part of the Bill, are about impact assessments and regulatory burdens. Are we putting too many burdens on people, or are those regulatory burdens helpful to the economics of this country? We must do things which increase productivity, and that is part of what the amendments are about. The noble Lord, Lord Deben, said that he had run businesses, and many of us in this Chamber have run businesses or advised them. I hope that he is going to be proved wrong—he asked to be proved wrong. I await the Government’s answer to the comments that he made in this debate.
Lord in Waiting/Government Whip (Lord Leong) (Lab)
My Lords, I am grateful to every noble Lord for their contribution, and I have listened intently to each and every one of them. I thank noble Lords for their kind words about my previous business career.
We return to the important issue of impact assessments. I appreciate the continued efforts of the noble Lords, Lord Sharpe and Lord Hunt of Wirral, here. It will be no surprise to your Lordships’ House, given the number of separate debates—I think there have been about eight now—we have had on this topic, that the Government view these amendments as unnecessary. Let me recap. We have already published 27 impact assessments, available on GOV.UK, which have been updated where needed as policy has been added to the Bill during passage.
Academics at Warwick University, Oxford University, MIT and UCL all find a positive relationship between job satisfaction and productivity in their research. For example, Simon Deakin, professor of law at the University of Cambridge, said:
“The consensus on the economic impacts of labour laws is that, far from being harmful to growth, they contribute positively to productivity. Labour laws also help ensure that growth is more inclusive and that gains are distributed more widely across society”.
All this evidence is laid out in our impact assessment, which was developed in consultation with external experts. Business supports the view that this will be good for productivity. In a survey undertaken by the Institute of Public Policy, seven in 10 employers said that strengthened employment rights will boost productivity, compared to just 7% who disagreed, and six in 10 employers thought stronger employment rights would have a positive impact on business profitability, while fewer than two in 10 disagreed.
We have worked hand in hand with businesses, trade unions and civil society to understand the impacts of this Bill—
Baroness Fox of Buckley (Non-Afl)
There is no doubt that people who are happy at work are likely to contribute positively to the workplace. Nobody, I think, is arguing against that and wants miserable workers with no rights. However, what we are trying to explore is not whether people will have job satisfaction but whether they will have jobs. It is about the unintended consequences of the Bill that might mean that people are not employed; or, indeed, that new jobs are not created because productivity will not go up; or that it becomes too risky to employ, for example, young workers, and so on.
With all due respect to Warwick University’s academics—I went there and I know some of the people who wrote that research, and I am sure that they are happy in their workplace—the truth is that if some piece of legislation ended up unintentionally closing down Warwick University, they would not be happy and productivity would not go up. That is what we are concerned with. It is not a theoretical academic argument about how being happy at work makes you work harder—I know that. But if there is no work, then you are not going to be happy, you are not going to do any work and productivity will go down.
Lord Leong (Lab)
I thank the noble Baroness for that contribution. If she can be a bit patient, I have some more positive news for her.
We have worked hand in hand with businesses and trade unions, as I said earlier, to understand the impacts of the Bill on industry and will produce further analysis as required under the Better Regulation Framework. It is worth noting that more doors are opening than closing. In the first quarter of 2025, the UK saw 90,000 businesses created, up 2.8% on last year, while business closures fell by 4.4%. This Government are backing British businesses and British workers, and our Modern Industrial Strategy, published yesterday, is making that real. To give one example, we have boosted the British Business Bank’s capacity to £25.6 billion, unlocking billions for innovative firms, especially SMEs. For the first time, the British Business Bank will be able to take equity in fast-growing tech companies. This has never happened before. That is helping crowd in tens of billions of pounds more in private capital, fuelling growth, creating jobs and driving long-term prosperity. I hope that gives comfort to the noble Lord, Lord Deben.
Lord Deben (Con)
I am very pleased with all the research that was done before the Bill and all the research that has been done with it. The only question is: when the Bill goes through, why do not we do the research to make sure that we were right? I cannot understand why we draw the line the moment the Bill is passed, except in the generalities of better regulation. Will the Minister, whose business knowledge is considerable, please accept that businesspeople normally measure by results? Why cannot we measure the results?
Lord Leong (Lab)
I thank the noble Lord. I ask him to bear with me—patience here. We are already seeing the results. Just this morning, Amazon announced a £40 billion investment. This means that it has resounding confidence in the UK Government.
Baroness Verma (Con)
We are talking about small and medium-sized businesses too, and they are not all going to be tech companies; they are not all going to be Amazons. They are small or medium-sized companies that keep most cities and towns going.
Lord Leong (Lab)
I thank the noble Baroness for that. I, together with my ministerial colleagues, speak to businesses every day, whether they are tech companies, other businesses or whatever. Yesterday, I had a conversation with Small Business Britain, and we talked about this Bill and most of its members have confidence in this Government. We talk to all businesses.
I come back to Amazon: basically, what it means is £40 billion. It is creating 4,000 new jobs across the UK, which is a major boost to our tech and logistics sector. The latest Lloyds Business Barometer survey shows that business confidence is at a nine-month high, with a rise in hiring expectations among businesses. This is proof that our plan for change is working. Britain is open for business, and the world is taking notice. There is simply nothing more I can add to the noble Lord’s argument. This analysis—and we will continue to do impact assessments—will be done, and I therefore ask the noble Lord to withdraw Amendment 310.
Baroness Lawlor (Con)
My Lords, before the Minister sits down, may I just clarify whether he said that 90,000 jobs were created in the first quarter of 2025, or was it 290,000? I missed the exact figure. It is my understanding that, in the first quarter of last year, with which the comparison has been made by the Minister, there were 248,000 new entrants. The Minister spoke of new jobs, but our impact assessment is on new entrants to the market and there were 248,000 in the first quarter of last year. If the 90,000 refers to new jobs as opposed to new entrants into the workforce, that is a different comparison.
Lord Leong (Lab)
I thank the noble Baroness for giving me the opportunity to say this again. In the first quarter of 2025, the UK saw 90,000 businesses created. Business creation was up by 2.8% over last year, while business closures fell by 4.4%.
Lord Hunt of Wirral (Con)
My Lords, this has been such an important debate. We have been throwing statistics around the Chamber as if they had just been invented. The very latest statistic that I have in front of me, published in Business Matters, is that:
“Britain has recorded its highest number of company closures for two decades, with the final quarter of 2024 seeing 198,046 businesses struck off the official register”.
That is hot from the press. We have really been debating—
Lord Leong (Lab)
My Lords, I must challenge the noble Lord. There are many reasons for business closures. Companies get struck off for all kinds of reasons. Unless we drill deep down into what that figure is comprised of and whether the reasons are insolvency or companies being dormant, it will be difficult just throwing figures around.
Lord Hunt of Wirral (Con)
Is that not exactly why we need to measure the impact? That is what this debate has been all about. The Minister has done my job for me, but he has not accepted any of the amendments.
I thank my noble friend Lady Lawlor very much indeed, not only for the facts and figures that she gave us but for how she stressed that there has been, is perceived to be and is taking place an increase in the regulatory burden. Looking ahead, there are more compliance costs to come. Why does the Minister not accept that there is a need for an independent impartial measure? That is what these amendments seek. My noble friend Lord Deben, with all his unrivalled experience in building up businesses, is arguing that we need to check, to look ahead and to ensure that we can measure the impact of this legislation. Who is going to be right? The Government are saying, “Trust us, we’re right, we know what’s best, this will increase growth”. Yet their own impact assessment says that it will not.
Therefore, when you analyse all the facts and statistics that are coming forward, surely there is a very strong argument that we need an independent impact assessment. I agree with my noble friend Lady Verma that, if our roles were reversed and the Minister, with all his experience, was sitting on this side of the House, these are the amendments that he would be pressing for, because he knows how important it is to measure the impact of legislation and regulation. The noble Baroness, Lady Fox of Buckley, spoke of measuring what is happening now against what the Prime Minister promised in cutting the amount of regulatory burden and reversing the managed decline. It was good that she reminded us of those key words. Yet, as she said, this legislation is jam-packed with regulation. Her warning that this legislation is a recipe for lawfare is a warning to us all.
I agree with my noble friend Lord Swire that there is a need for a low regulatory framework at a time when our competitors are embracing artificial intelligence and all the new techniques while we are increasing the regulatory burden. I do not think that the noble Lord, Lord Palmer, got the answer that he was looking for from the Minister. Although he may not agree specifically with each individual amendment, he does believe that there is a clear message here that we must take on board.
Lord Monks (Lab)
I was just sitting here looking at the noble Lord, a member of Mrs Thatcher’s Cabinet, with another one over there, the noble Lord, Lord Deben. When they passed a major piece of legislation, were there were any cases where you went to Mrs Thatcher and said, “Can we have an independent assessment of whether we have done the right thing?” I cannot remember anybody ever doing that, but perhaps the noble Lord can tell me otherwise.
Lord Deben (Con)
Can the noble Lord, Lord Monks, mention any occasion on which the Official Opposition of the time demanded it?
Lord Hunt of Wirral (Con)
My noble friend is quite right. I was going to make a rejoinder by demonstrating that, with Margaret Thatcher assessing, when you proposed a piece of legislation, you had to make sure that you had done your homework and carried out every possible impact assessment, as you would be closely cross-examined on each and every piece of legislation. I worry that this Bill has been rushed through in the first 100 days and no one has carried out the sort of test that Margaret Thatcher would have imposed. Therefore, I am so grateful to the noble Lord, Lord Monks, for reminding us of that criterion, which we ought to bear in mind.
Lord Watson of Wyre Forest (Lab)
The noble Lord has lured me into asking a question about impact assessments and the historic impact of the Thatcher Government. Which impact assessment said that there was a legislative decision made incorrectly during that period?
Lord Hunt of Wirral (Con)
We were subject to parliamentary scrutiny each and every day of the 18 years that we were in power. It was good that this accountability to Parliament was treasured by those in Parliament. However, I worry, certainly so far as secondary legislation. The noble Lord served with me on the Secondary Legislation Scrutiny Committee and joined with me in saying, “Please let us make sure that every piece of legislation that we pass has a proper impact assessment”. Perhaps we learn from history that it is vitally important to have that impact assessment always ready there to prove, as my noble friend Lord Deben put it, whether we have got it right or wrong.
I worry that this Government have not done their homework. The fact that they resist these amendments suggests that the cut in regulatory burdens is not going to be pursued with any real determination. That 25% target is destined to remain a headline-grabbing announcement that quietly disappears when submerged under the reality of real-life policy choices. I hope that the Government reconsider, because these issues will come up over the next few years of this Government. For now, I beg leave to withdraw the amendment.
Lord Sharpe of Epsom
“Social mobility impact reportingWithin 12 months of the day on which this Act is passed, the Secretary of State must publish an independent assessment of its impact on social mobility.”
Lord Sharpe of Epsom (Con)
My Lords, in some ways, we are continuing a theme with Amendment 313 in my name. The Government have talked about supporting those on the fringes of the labour market; this is a goal that I hope we all share. We know that different individuals face different work challenges, whether due to educational background, employment history, health circumstances or socioeconomic factors. The question before us is whether this legislation achieves that laudable objective or whether it inadvertently makes it harder for precisely those individuals whom the Government claim they want to help.
I start with the day-one right concerning unfair dismissal, and I pose a fundamental question: why would any employer take on what might be considered a high-risk hire? Why would they take a chance on a young person seeking their first opportunity? Why would they hire a student who did not attend a top-tier university? Why would they consider a person from a lower socioeconomic background, who may lack conventional credentials but definitely possesses untapped potential? When employers face immediate legal liability for dismissal decisions, they naturally become more risk averse in their hiring practices. They gravitate towards candidates with proven track records, established credentials and minimal perceived risk. This is not callousness; it is rational economic behaviour in response to the regulatory environment.
The Government’s refusal to include a meaningful probationary period at this stage compounds the problem significantly. I have little doubt that, fairly soon, the Government will be arguing that they intend to consult and to continue with a light-touch probationary regime, which, it is suggested, could last for up to nine months. That is all well and good, but what does it mean in practice? What does the phrase “light-touch” mean and how will it be defined? Who are they going to be consulting, and on what? What are the Government thinking about this? It needs to be in primary legislation. Make no mistake: this uncertainty is affecting business decision-making now.
It looks as if the Government fundamentally fail to understand that employment relationships involve mutual discovery. In the short term, virtually all jobs represent a cost to business. Employers hire workers not because they are immediately profitable but because they are confident that, over time, these workers will develop skills, reach their peak performance and productivity, and ultimately become a net benefit to the company or employing organisation. This process of development and mutual learning requires flexibility. It requires the ability for both parties to recognise when a match is not working and to part ways without excessive legal complexity. By removing this flexibility from day one, the legislation creates a powerful incentive to hire only the safest and the most predictable candidates—precisely the opposite of supporting those on the fringe of the labour market.
The same perverse logic applies to the day-one right to sick pay. Consider the position of someone who has been absent from the workforce for an extended period. There are businesses that will make a point of hiring such individuals, recognising their potential and being willing to provide them with opportunities. But now the cost calculation has fundamentally changed. An employer considering such a hire must now factor in the immediate liability for sick pay from day one, combined with an inability to part ways if the employment relationship proves unsuccessful. The rational response is fairly obvious: avoid the risk entirely.
This is not theoretical speculation; it is how labour markets function when faced with regulatory constraints. No amount of academic opinion can state otherwise. I urge the Government to review the impact on social mobility, so that they can adapt the legislation to avoid the unintended consequences I have highlighted. Like my noble friend Lord Deben on the last group, I would like to be proved wrong on this. If I am, I invite the Government to gloat to their hearts’ content about that, but I think we need the evidence. I beg to move.
Lord Jackson of Peterborough (Con)
My Lords, I support my noble friend’s excellent amendment, as we reach the end of Committee. Before I get into the substance of that, I will offer some praise. Noble Lords know that, last week, I took issue with the Government Front Bench about the potential lack of response to letters from individual noble Lords who had raised specific points during Committee. The noble Baroness, Lady Jones, who is no longer in her place, took some issue with that, resiled from my analysis and said that it was not the case. However, over the last few days, I have received a plethora of epistles from the Government in my email. As Private Eye may have said in the past, are those two occasions by any chance related? That was my praise; I thank the Government for coming forward with those letters and we will hold them to account when we reach Report. I am grateful for small mercies, nevertheless.
I commend to the Government the excellent report of the Social Mobility Commission, State of the Nation Report 2024: Local to National, Mapping Opportunities for All. I probably say this at every juncture, but my noble friend’s amendment is helpful, because there is a cross-party consensus that we should all be working to help young people in particular into work, innovative employment, and skills and training. As we all know, and as has been found by apolitical third parties such as the charity the Sutton Trust, which focuses on improving social mobility, there are disparities across the country. There are sectoral and geographic disparities, and disparities in people’s backgrounds, race, ethnicity, age et cetera. As far as is practicable, we should be designing legislation that tackles issues around improving life chances, training and skills, and innovation.
More fundamentally, we need to be designing legislation that tackles endemic, entrenched inequalities, and that is what this amendment is about. My noble friend Lord Sharpe of Epsom is absolutely right that this is about opportunity cost. Many employers, given the chance, will try to help young people by giving them a chance to improve their life chances and skills, and by paying for their exams and training, et cetera—via apprenticeships, for instance. But the legislative regime will be such that they are encouraged not to employ that person, because they may have a disability, may be late to the employment market or may not be socialised—they may not understand the protocols of going to work each day, of being on time and of being dressed smartly, which are very basic things that we take for granted. That risk aversity, employers not wanting to employ those people, will have a negative effect as the corollary of this Bill.
Ministers have a chance at least to engage with this amendment and, when we come to Report, I hope to accept it; it would make a real difference to the lives of people who find it tough to enter and stay in the employment market. I encourage Ministers to look at the report to which I referred, and at the work that has been done to support the Bill and its laudable objectives. My noble friend offers this amendment in good faith in order genuinely to improve the Bill. On that basis, I hope that the Minister will look on it favourably and incorporate its ideas into the finished Bill.
Baroness Lawlor (Con)
My Lords, I could not support this amendment more; I heartily support it. A social mobility impact assessment is vital.
I want to illustrate this with a few brief words on the retail sector. My noble friends have referred to the many reasons why people are excluded from employment in the retail sector, such as a lack of social mobility. When this Bill was coming forward last year, the British Retail Consortium expressed great concern and doubt about its ability to offer jobs. The BRC indicated that 61% of those consulted said that the Bill would reduce flexibility in job offers, 10% were unsure and 23% said that it would have no effect.
Baroness Fox of Buckley (Non-Afl)
My Lords, in a previous life, I used to work in further education with many young people who were non-traditionally successful. In more current times, I have worked on matters relating to prison reform and I am very interested in former prisoners gaining employment. In all the instances of working with young people who did not have traditional qualifications or were trying to get into work, or with former prisoners, you were in a situation where you were talking to local employers and asking them to take a punt—a risk—on people. You would say, “Look, the worst that can happen is that you try this person out, it doesn’t work out and no one’s lost anything, but actually I’ve got every faith they will be brilliant”, and so on and so forth. You had to say, “Take a risk”, and I am afraid that in all the responses from employers they are saying, whether we like it or not, that the Bill—if enacted as it is presently constituted —will mean they become risk averse and will not take risks on a former prisoner or a young person who is a bit of a scally. So it is key to assess social mobility.
In addition to that group of people, one of the key ways in which work contributes to social mobility is often through young entrepreneurs or young people who, again, might not be conventionally the kind of people who will pass the Civil Service exam, will not necessarily fit in as an ideal employee and might be slightly eccentric or risk-takers, but who will set up their own micro-business. We know that they are the kind of people who might well be successful, although sometimes they might not be.
Throughout the passage of the Bill, there have been a lot of amendments tabled about micro-businesses—not SMEs, as they are traditionally still quite large businesses whereas micro-businesses have around 20 staff, or even two, three or four. If you talk to young entrepreneurs—the sort of young men who drop out of college but set up semiconductor manufacturing organisations, like some people I know, a builders’ business or a small hairdressers’ business—they realise that many parts of the Bill, which I have opposed throughout, will affect them. They do not have huge HR departments, they are not lawyers and they do not know what they are going to do, but they will be held liable for swathes of regulatory rules mandated by the Bill about the way they run their micro-businesses.
Those people are part of the great success of social mobility. They start out and make a success of it, but now it might not be worth it. They are not always poor and impoverished people. It can be young people making good through small businesses.
If it is the case that this is scaremongering about the worst fears or people just being paranoid, fair enough. But this Labour Government, of all Governments, should want to assess whether the Bill inadvertently, not intentionally, damages social mobility via employment. I therefore urge the Minister to accept this harmless but important amendment.
Baroness Cash (Con)
My Lords, I support the amendment tabled by the noble Lord, Lord Sharpe, and the comments made by the noble Baroness, Lady Fox, who covered quite a few of the points I planned to make. I want to speak specifically about young people.
Speaking very recently in front of a committee, Employment Minister Alison McGovern said that
“the situation for young people is a big worry for me at the moment”
and that:
“A lot of our young people—nearly 1 million—are effectively on the scrap heap”.
Those are not words I would have chosen myself; they are her words to a cross-party committee.
We have heard a lot of statistics during today’s debates. I will just add a few more. There are 1 million people not in education, employment or training, which includes a lot of young people. In addition, we have massive numbers of people receiving sickness benefits. All these young people will be a risk for employers.
The Minister is quite right that there has been an uptick in new businesses starting, but there is a serious downturn in the number of jobs created; unemployment is rising year on year, month on month since this Government took power; and the tax rises in the Autumn Budget are beginning to really kick in. We have seen that in the written submissions by numerous business organisations to the Government, other groups and Peers in this Chamber, begging—pleading—with us all to make their case about the significant costs they are already facing due to the national insurance rises. We can see it in real time. This amendment is a request to monitor the situation and come back with an impact assessment on perhaps the most vulnerable people in our society.
To show that these young people really want to succeed and want to have an opportunity, I will read the Committee a couple more numbers that the Minister is probably already well aware of. Some 60% of young people under the age of 30 would love to start a business, 9% of them have done so and 18% more of them would like to do so this year. These are the most vulnerable young people in our society. They are our future, as our demographics are getting older, and we are going to become more and more reliant on the economy that they generate. I have said it before, and I will say it again and again in this Chamber: Governments do not create growth; businesses create growth. We are now looking to these young people to start businesses and take risks on employing others. I urge the Government to, at the very least, come back having monitored that there is no impact on them and no further impact on the loss of employment that could ensue.
Lord Leong (Lab)
My Lords, I am grateful to all noble Lords who have spoken. I refer to the point made by the noble Lord, Lord Jackson, about letters. I assure him that it is no coincidence that when we make a commitment and say that we will write, we write. I make sure that my officials write to everyone to whom I have promised a letter within 10 working days. If the noble Lord has not received letters from us, I welcome the challenge of being put on the spot to ask why the letters are not there.
I have a couple of points. I am a firm believer in social mobility. When I exited my business, some 20 years ago, I was very much involved in a social enterprise that went into state schools to ensure that state pupils were able to get out of their shell, be better and make something out of their lives. I am a firm believer in social mobility, and this Government take social mobility seriously. We do not just talk about it; we action it.
To support our commitment to ensuring that everyone, no matter their background, can thrive, we will commence Section 1 of the Equality Act 2010 in England:
“Public sector duty regarding socio-economic inequalities”.
As an example, the socioeconomic duty will require specific public bodies to actively consider how their strategic decisions might help to reduce the inequalities of outcomes associated with socioeconomic disadvantage. We are also now taking forward work to make sure that commencement of the duty in England is as effective as possible in driving efforts across the country to break down barriers to opportunity and making sure that there is no glass ceiling on people’s ambition.
I refer to the point made by the noble Lord, Lord Sharpe. We debated unfair dismissal and probation periods on day five of Committee, which was 21 May. We debated sick pay on days two and three of Committee, which were 8 and 13 May. We have debated some of these points at length.
I refer to the point made by the noble Baroness, Lady Cash, about some of the 1 million young people who are not in employment, training or education. We recognise that, and we are doing something about it. Since the general election, 500,000 more people are in work. At same time, we are improving access to NHS appointments; some 3 million people have been seen by medics in NHS appointments.
Baroness Cash (Con)
I would like some clarity regarding the employment numbers, because unemployment has been rising and is higher. We know from a number of City firms that graduates are struggling to get jobs, even in supermarkets. We have 33% fewer jobs for graduates. I just want the Minister to clarify the increase that he referred to and where that is coming from.
Lord Leong (Lab)
I thank the noble Baroness for that remark. I will get officials to write, setting out the detailed analysis of where this unemployment is and where new jobs are being created. I want to make absolutely sure that we get this right. We have already improved the NHS waiting list, and something like 3 million people have already accessed their appointments.
On the point about the impact assessment, which I will not labour, this analysis, as I have set up in many preceding groups, will be done. That includes social mobility. There is no point me standing here and repeating what I have just said. All this will be done. I therefore ask the noble Lord, Lord Sharpe, to withdraw Amendment 313.
Lord Sharpe of Epsom (Con)
I thank the Minister for his answer. I am also grateful to my noble friends Lord Jackson, Lady Lawlor and Lady Cash for their supportive comments and to the noble Baroness, Lady Fox, who raised some very interesting points.
I gently suggest to the noble Lord, Lord Leong, that we are not just talking about it either; we are proposing to do something about it. We want to protect social mobility, which is why we have tabled this amendment. He sounded disappointed that we have to keep returning to this debate—so are we, but we do not feel that we are getting meaningful answers on the subject of the consultation, which we have brought up on numerous occasions. Until we get those meaningful answers, we will continue to return to this debate.
The Government may not deem a comprehensive impact assessment necessary for these provisions, but they have not given a satisfactory response to the serious concerns raised about social mobility and opportunity creation. In our opinion, this represents a failure to engage with the economic realities of how the employment market functions, and the Minister knows this as well as I do.
We must judge policies by their results, not their intentions. Results are not dependent on the nobility of our intentions but on the incentives that policies create in the real world. This Bill creates the wrong kinds of incentives. It incentivises employers to become more risk-averse, not more inclusive. It incentivises the hiring of safe, conventional candidates over those who might bring fresh perspectives but lack traditional credentials. It incentivises the protection of those already in employment at the expense of those seeking to enter it. In the words of the noble Baroness, Lady Fox, it disincentivises taking a punt.
Do not just take my word for it, take those of the Institute of Chartered Accountants in England and Wales. Its most recent survey stated:
“Members say that, at a time when the government needs business to drive growth by taking risks, the Bill, along with these other pressures, will make businesses more risk averse. ‘We worry businesses will start playing it too safe, choosing a “safe pair of hands” over bold, innovative talent that could drive real change’”.
These are not the incentives of a modern, dynamic economy that seeks to maximise opportunity and social mobility. They are the incentives of a system that entrenches existing advantages and fundamentally will make it harder for those without them to break through. We think that is a tragedy. This legislation will be judged a failure because of the standards its proponents have set for it. When employment opportunities for young people decline, social mobility stagnates and those on the fringes of the labour market find doors closing rather than opening, we will see the true measure of these policies, and that will be regrettable. I beg leave to withdraw the amendment.
Lord Palmer of Childs Hill
“Guidance for small businesses(1) The Secretary of State must publish a document containing statutory guidance for businesses with fewer than 50 employees on their employment and legal obligations under this Act.(2) The document must include, in particular— (a) an overview of the relevant legal duties placed on employers under this Act, (b) a practical framework outlining how such businesses can meet those duties, and(c) guidance on best practice suitable to businesses of this size.”Member’s explanatory statement
This amendment requires the Secretary of State to publish statutory guidance for small businesses in adhering to the employment and legal requirements of this Act.
Lord Palmer of Childs Hill (LD)
My Lords, in speaking to this group of amendments I note the sorry absence of my noble friend Lord Fox, whose contributions on these matters have always been thoughtful and constructive. Unfortunately, the Committee has me instead. I will focus in particular on Amendments 317 and 329, both tabled by my noble friend Lord Fox, which aim to provide much-needed clarity and certainty to small businesses as they seek to understand and comply with the provisions of the Bill.
Amendment 317 would require the Secretary of State to publish statutory guidance to support small businesses in meeting the employment and legal obligations introduced by this legislation. This is a modest and reasonable ask that would have a significant practical benefit. For many small businesses, compliance is a question not of good will but capacity. Unlike larger firms, they do not have in-house legal departments or external consultants on retainer. They need clear, accessible, authoritative guidance that they can rely on from day one. This amendment is not about watering down the law, nor is it about shielding firms from responsibility. It is about enabling small businesses to do the right thing without having to second-guess the detail or bear disproportionate cost in trying to interpret it.
Amendment 329 would build on that principle by making the commencement of the Act contingent on the publication and parliamentary approval of such guidance. It is important to say that we on these Benches understand the mandate that the Government won at the last election, and we have no intention of delaying the Bill beyond our duty to scrutinise it. However, this amendment reflects a deep concern about the real-world impact that the legislation may have on small businesses if clarity is not in place from the outset.
It is not necessarily about the measures in the Bill itself but about how they are communicated and implemented. Without clear guidance, there is a risk that well-intentioned businesses will fall foul of the law through no fault of their own. These amendments offer the Government a constructive route to avoid that outcome. I hope that Ministers will engage with them in that spirit. We are just trying to make it so that businesses, like the Minister, would know what they have to do. They need it to be set out. I hope that the Government will feel this is a possibility that they will consider before Report. I beg to move.
Lord Carter of Haslemere (CB)
My Lords, I will speak to Amendment 326 in this group. I begin by saying again how gracious it was of the Minister to meet me to discuss my amendments in advance a couple of weeks or so ago. My Amendment 326 is on the same theme of the need for impact assessments before provisions are brought into force. It provides that:
“Regulations which would amend primary legislation may not be laid … unless an assessment of the impact … has been laid before Parliament and three months has elapsed”
from that date.
Delegated powers that can amend primary legislation are, of course, known as Henry VIII powers. This derives from the Statute of Proclamations in 1539 when Henry VIII persuaded the Commons to include a provision in a Bill that would permit him to issue decrees having the same effect as an Act of Parliament and thereby bypass the normal parliamentary process.
Henry VIII powers can be draconian and raise real questions as regards compliance with the rule of law. This is not just my view. In his much-lauded Bingham lecture on 14 October 2024, entitled “The Rule of Law in an Age of Populism”, the noble and learned Lord, Lord Hermer, the Attorney-General, was obviously right when he said that excessive reliance on delegated powers, including Henry VIII clauses
“upsets the proper balance between Parliament and the Executive. This not only strikes at the rule of law ... but also at the cardinal principles of accessibility and legal certainty”—
issues that
“raise real questions about how we are governed”.
These are wise words indeed and very welcome, but I find it difficult to reconcile them with our Bill. As the noble Lord, Lord Hunt, pointed out at Second Reading, there are around 163 delegated powers in our Bill and 12 Henry VIII powers. As he powerfully put it:
“Ministers are, in effect, asking Parliament today to empower them to do whatever they decide to do, whenever they decide to do it”.—[Official Report, 27/3/25; col. 1845.]
The Delegated Powers and Regulatory Reform Committee, in its report of 24 April, described various Henry VIII powers in the Bill as, “overly broad”, “inadequately justified”, and an
“inappropriate use of the … affirmative process”.
As it said, Henry VIII powers are subject to far less scrutiny than primary legislation.
And this is the heart of the problem. Much of the legislation needed is yet to come, but it will not be capable of being scrutinised as it should be because of the reliance on Henry VIII clauses. It is a symptom of a rushed agenda but also, more worryingly, of a growing acceptance that Henry VIII powers are okay. They are becoming the default option.
The Select Committee on the Constitution, in its report, points out that Clause 24, “Dismissal during pregnancy”, and Clause 25, “Dismissal following period of statutory family leave”, both
“contain and extend Henry VIII powers that … act as placeholders while the Government consults further on the specifics of the measures to be implemented”.
This can mean only that
“substantive policy decisions have not yet been taken”
on those issues. But it also means a lack of certainty about how the provisions will operate in practice, which the Select Committee-considered to be “particularly concerning”, given that the provisions enable primary legislation to be modified.
In addition, Schedule 7 contains a list of extensive legislative powers in connection with labour market enforcement, under Part 5, which are passing to the Secretary of State. Paragraph 35 confers on the Secretary of State a Henry VIII power to add by regulations any enactment which affects the rights of employees, trade unions and the duties of employers.
These extensive enforcement powers in Part 5 also need to be considered alongside Clauses 151 and 153. These clauses contain a power to make any consequential provision, which may amend, repeal, revoke or otherwise modify
“any provision made by or under primary legislation passed before, or in the same session as … this Act ... and may make different provision for different purposes or … areas”
or
“contain supplementary, incidental, consequential, transitional or saving provision”.
The Government may respond that the power to make consequential provision is confined to what is purely consequential. That is true, but what is purely consequential turns on the scope of the provisions they are said to be in consequence of. Combining these consequential powers with the wide powers in Part 5, for example, would seem to give the Secretary of State the power to confer on his enforcement officers even wider powers when entering offices to search and seize documents, if they are in some way connected with the operation. I think even Henry VIII would have been impressed. His 1539 Statute of Proclamations allowed him to amend legislation by decree, but even he was not permitted to prejudice
“any person’s offices, liberties, goods”
or “chattels”.
Then there is the power to make provision for different purposes or different areas. What is the need for that power? When I was in government as a lawyer, parliamentary counsel would probe closely as to why we needed this power, and we would have to justify it. My amendment is therefore designed to bring some transparency and due diligence to the use of these Henry VIII powers before they are laid and debated. It would simply provide that, before such regulations could be laid, there would need to be an impact assessment laid before Parliament for three months to enable a bit more parliamentary scrutiny. This would give time for reflection and, if the Government decided to proceed with laying the regulations, it would serve to enhance the level of parliamentary debates on the regulations that subsequently take place under the affirmative procedure.
I give the last word to the great Lord Judge, who spoke strongly against such clauses when he was Lord Chief Justice of England and Wales. He said:
“You can be sure that when these Henry VIII clauses are introduced they will always be said to be necessary. William Pitt warned us how to treat such a plea with disdain. ‘Necessity is the justification for every infringement of human liberty’”.
Lord Hunt of Wirral (Con)
My Lords, I thank the noble Lords, Lord Palmer of Childs Hill and Lord Carter of Haslemere, for their amendments in this group. As the noble Lord, Lord Palmer, commented, it gives us the chance to send further good wishes to the noble Lord, Lord Fox, for a speedy recovery. We look forward to seeing him back in this Chamber to discuss this vital Bill.
Dealing with Amendment 317 first, the Government have already acknowledged that the vast majority of the costs associated with this legislation will fall on smaller businesses, but it is not just the obvious headline of which we must be mindful. As the noble Lord, Lord Palmer, pointed out, there are significant hidden costs too. These include the need to hire legal professionals, expand human resource capacity, and navigate increasingly complex compliance requirements, which many smaller firms simply cannot afford. That is why statutory guidance specifically tailored for small businesses—those with fewer than 50 employees—is not just helpful; I agree with the noble Lord, Lord Palmer, that it is essential. These businesses are the backbone of our economy. They do not have in-house counsel, nor the luxury of large HR departments, yet they are bound by the same obligations under this Bill as any large corporation.
Lord Leong (Lab)
I am grateful to all noble Lords who have spoken. I thank the noble Lords, Lord Carter of Haslemere and Lord Fox, for Amendments 317, 326 and 329, and the noble Lord, Lord Palmer, for moving the amendment in the name of the noble Lord, Lord Fox.
Amendment 317 in the name of the noble Lord, Lord Fox, is on guidance for small businesses. Ensuring that businesses are supported to implement these reforms is fundamental to the successful delivery of the plan to make work pay. We have committed to providing guidance to ensure that all stakeholders have the information required to make necessary adjustments. We are engaging closely with employers of all types from a range of sectors to understand how the Government can best support them in their preparations.
Support may look different for different sectors, sizes of company, regions and so on. We want to make sure that we properly consider the needs of different employers and respond in the most effective way. This could include a variety of tailored guidance and support. The amendment risks preventing the Government taking the type of tailored approach that we hope will be most effective. Our forthcoming implementation road map will set out our plans for consultation and implementation of the Bill’s measures.
Our Employment Rights Bill delivers the most significant upgrade in employment rights in a generation, creating a modern, fairer labour market. We will continue to consult and engage to make sure we get delivery right. We will produce guidance, provide support, allow time to prepare, and ensure the enforcement landscape works. I make it clear that I agree with the noble Lord that it is in everyone’s interest that small businesses are properly supported to implement the Bill, and the Government are committed to doing so.
Amendment 329 from the noble Lord, Lord Fox, would make commencement of all the Bill’s measures contingent on the approval and publication of statutory guidance. This would unnecessarily delay commencement of measures that can be delivered more quickly. We are committed to supporting small businesses and will ensure that timely and targeted guidance is delivered where relevant.
I turn to Amendment 326 from the noble Lord, Lord Carter. I have read the entire Bingham lecture from my noble and learned friend the Attorney-General. Nowhere in his speech did he say that statutory instruments should not be used. As most noble Lords know, employment legislation uses true statutory instruments because they save parliamentary time, as mentioned in the Attorney-General’s speech, so that we can get more of this on the statute book.
I reassure the noble Lord that the Government have sought to limit the use of the Henry VIII powers within the Bill and believe our approach to their use is proportionate. I can also reassure the Committee that the Government already have robust plans in place to assess and review the impacts of this Bill. The noble Lord’s amendment would add unnecessary bureaucracy to this and other necessary powers in the Bill. It would also, in effect, duplicate work that the Government are already committed to undertaking.
Take, for example, the power in Clause 132(6). This allows the Secretary of State to update, expand or otherwise modify the list of bodies specified in Schedule 9 to the Bill with which information may be shared by the fair work agency. It is a Henry VIII power, subject to the affirmative procedure. The Government believe this is an entirely appropriate use of such power and the DPRRC also raised no concerns.
Specifically on the power in Clause 151, I reassure the noble Lord that, where possible, amendments to other pieces primary legislation that are required as a result of the Bill’s provisions have been made in the Bill itself. This includes amendments in Schedule 1 that are consequential on the provisions regarding zero hours in Clauses 1 to 5; those in paragraphs 5 to 19 of Schedule 3 that are consequential on the changes regarding unfair dismissal; and the provisions in Schedule 10 that are consequential on the provisions in Part 5. However, it is possible that further provisions will be identified that require consequential amendments. Allowing these to be made by regulations will mean they can be made without delay and with appropriate levels of parliamentary scrutiny. The power is constrained as it will allow amendments only where they are consequential on the provisions already made in this Bill.
Supporting employers to understand the requirements of the Bill is key to achieving the objectives of the plan to make work pay. I hope noble Lords are assured of the Government’s firm commitment to effectively and appropriately support stakeholders in preparing for employment rights reform.
This will be my last time speaking in Committee on this Bill, so—
Lord Hunt of Wirral (Con)
If this is the last time the Minister is going to speak, I should point out that he started off by telling us about the road map, which his noble friend promised we would see shortly. In his closing remarks, would he like to tell us when we will see it? Will it be tomorrow, or next week? We would like to see it as soon as possible; indeed, we would love it if he could publish it now, before he finishes his closing speech.
Lord Leong (Lab)
It is tempting, but I can assure the noble Lord that it will be published very, very, very soon. How is that?
Like I said, this is the last time I will speak in this Committee. I want to take the opportunity to express my gratitude to all noble Lords for their extensive engagement and the robust way in which we have debated this stage of the Bill’s passage. I pay particular tribute to the noble Lords, Lord Sharpe, Lord Hunt and Lord Fox, and to the noble Lords, Lord Goddard and Lord Palmer, for standing in so ably for him. Like the noble Lord, Lord Hunt, I wish the noble Lord, Lord Fox, well in his recovery and look forward to welcoming him back.
Let me be clear: this Government welcome scrutiny—that is the purpose of this House—but scrutiny must be grounded in the present and focus on the issues at hand, not lost in the echoes of decades-old political arguments. Some contributions, regretfully, seem to have been more intent on reviving grievances from the 1970s than addressing the needs of today’s Britain.
This Bill delivers on a clear manifesto promise. It is part of our plan for change, built not on rhetoric but on the practical need to provide security for working people and long-term renewal for the country. This is where our focus lies—not on refighting the past but on fixing the future. We continue to welcome serious challenge, and we expect debates to be robust, but we also expect them to be proportionate, honest and forward-looking.
As we approach the end of Committee this evening, we on this side look forward to constructive and collaborative meetings and engagement with all noble Lords ahead of Report. With that said, I respectfully ask the noble Lord to withdraw Amendment 317.
Lord Palmer of Childs Hill (LD)
On behalf of my noble friend Lord Fox, I thank the noble Lord, Lord Hunt, for his support, which was so eloquently put. I also thank the Minister for his detailed reply.
When the Minister started speaking, I thought he would use his valedictory remarks to say that he was actually going to agree with something. There was great promise that he would agree to the amendments—these reasonable amendments—as all they would do is give guidance to small businesses to show them what the legislation is. Then, I lost: he will step down without going out on a positive note, which is very sad. His argument was that all the amendment would do is delay things. Sometimes, delay is good. Delay can be good if you get it right. Too often things are done precipitately, and delay is the better alternative.
What is the answer from the Minister? We shall have more statutory instruments. I have dealt with statutory instruments in the 15 years I have been in this House. Quite honestly, we discuss them, but we never vote. There has been no vote that I can remember, and statutory instruments are a means for the Government to tell us what they are going to do, and we have to nod in agreement.
Where do small businesses stand in all this, without any real guidance? They are left in a morass. The Minister has gone off in a cloud of glory, but I still do not have an answer as to whether anything will be implemented. Sadly, I beg leave to withdraw the amendment of my noble friend Lord Fox.
Lord Clement-Jones
“Rights of dependent contractorsAfter section 230 of the Employment Rights Act 1996 (Employees, workers etc), insert—“230A Rights of dependent contractors(1) A dependent contractor is an individual who—(a) is engaged to perform work or services personally for an employer or contractor of services;(b) primarily or substantially relies on a single employer or contractor of services for their income;(c) is not classified as an employee under a contract of employment, nor as an independent contractor operating a fully autonomous business;(d) is subject to a degree of control by the employer or contractor of services regarding the manner, timing, or conditions under which the work is performed.(2) A dependent contractor, as defined in subsection (1), must be entitled to the following rights statutorily accorded to employees— (a) payment at or above the National Minimum Wage for all tasks performed;(b) paid annual leave and shall be subject to the record-keeping duties as outlined for employees in this Act;(c) statutory sick pay;(d) family leave entitlements including parental leave, and bereavement leave;(e) protection from unlawful deductions from pay and protection against discrimination under applicable equality legislation;(f) the right to request fixed hours after a qualifying period of continuous service with the same employer or contractor of services;(g) the right to and on terms to be defined in regulations, mirroring the rights afforded to zero-hour workers and those on similar contracts.(3) Dependent contractors, as defined in subsection (1), are not entitled to—(a) statutory redundancy pay;(b) minimum notice periods for termination unless otherwise specified in their contract.(4) The Secretary of State may by regulations make further provision in respect of the rights and obligations of dependent contractors, including defining qualifying periods for certain rights.””Member's explanatory statement
This amendment aims to define dependent contractor status by reference to existing employee rights particularly those related to flexible working arrangements and family leave.
Lord Clement-Jones (LD)
My Lords, I will see my noble friend Lord Fox tomorrow and I will tell him what he has been missing. I think the noble Lord, Lord Leong, is already making history by using the phrase “very, very soon”—or was it “very, very, very soon”? In my experience, I do not think I have heard that, so it is probably arriving tomorrow morning.
Amendment 318 seeks to introduce specific provisions for dependent contractors. It proposes the insertion of a new section into the Employment Rights Act 1996, by way of a new clause after Clause 150. It is intended to address a significant gap in our current employment law by recognising essential rights and extending them to a growing segment of our workforce. This is a serious and rather surprising omission from the Bill; certainly, it is a gap my party promised to fill in its manifesto last year. I feel an obligation to put this amendment forward today.
The Minister spoke about employment rights in a modern labour market. I do not believe we can secure proper employment rights in a modern labour market without addressing the issue of the dependent contractor. We know that the nature of work has changed and is changing. More and more individuals are engaged to perform work or services personally, relying primarily on a single employer or contractor for their income, yet they fall outside the traditional definitions of employee and fully autonomous independent contractor.
These dependent contractors are often subject to a degree of control over how, when and where they work, leaving them in a precarious position, without adequate employment protections. No doubt this Committee will be familiar with many of those who work in the gig economy—delivery workers, contracted drivers, piece-rate workers, home workers and even consultants who work almost exclusively for a single client. Granted, some Uber drivers and Hermes couriers went to court and managed to establish that they are in fact workers and not independent contractors, but more needs to be done. We need explicit statements about the status of such workers and explicit rights set out in this Bill.
The amendment seeks to rectify the situation by defining dependent contractor status clearly within the Employment Rights Act. Crucially, it proposes to extend several key employment rights to these individuals, treating some of the measures in the Bill as applicable to them. Specifically, this amendment would ensure that dependent contractors are entitled to the rights set out in proposed new subsection (2) of my amendment. This includes payment at or above the national minimum wage for all work performed; the right to payment for cancelled, moved and curtailed shifts, which mirrors the vital protections the Bill introduces for zero-hours workers; statutory sick pay from day one of sickness, aligning with the Bill’s improvements to SSP; day one rights to paternity and parental leave, and the new right to bereavement leave.
The amendment also includes a statutory right to disconnect from work-related communications outside of normal working hours, and protection from detriment for exercising this right, as the Bill establishes for other workers. It also includes protection from unlawful deductions from pay, and against discrimination. It further includes an entitlement to guaranteed hours if regular and predictable hours are worked for a defined period, moving beyond just the right to request and aligning with the new provisions for qualifying zero-hours workers.
It is also important to note that this amendment respects the distinct nature of dependent contractor relationships. It acknowledges that, unless specified otherwise in their contracts or by future regulations, dependent contractors would not automatically be entitled to statutory redundancy pay or general minimum notice periods for termination, so there would continue to be a distinction between employment and dependent contractor status.
Furthermore, the amendment would empower the Secretary of State to issue further regulations to define key terms and the specifics of these rights, ensuring flexibility and the ability to adapt to evolving working practices. It would also mandate the issue of guidance, including an online tool to aid in determining dependent contractor status in disputed cases. By accepting the amendment, we would have the opportunity to bring fairness and greater security to a significant and growing portion of our workforce. We could ensure that individuals who are deeply reliant on a single employer received fundamental employment rights reflecting the modern realities of the work. I very much hope that the Government will support this vital addition to the Bill. I beg to move.
Lord Sharpe of Epsom (Con)
My Lords, I thank the noble Lord, Lord Clement-Jones, for his amendment. As we consider this legislation, it is timely to reflect on how it would interact with one of the most significant shifts in our labour market in recent decades: the rise of the gig economy. This sector has delivered considerable benefits, including increased flexibility, new income opportunities and innovative business models. It has allowed many individuals to engage with work on terms that suit their circumstances, whether as a primary or supplementary source of income.
However, with any new form of work comes a degree of legal complexity. Our current employment framework was designed largely in a different era—one where work tended to take place in fixed locations, during fixed hours and under traditional contracts. The gig economy challenges many of those assumptions. For businesses, this complexity can lead to inconsistencies in regulation, administrative uncertainty and litigation risk; for individuals, it can mean uncertainty about rights and entitlements, and for policymakers, it raises the broader issues of whether and how the legal definitions of employment need to evolve to reflect modern working practices.
The Bill, while not focused exclusively on the gig economy, touches on matters such as workplace rights, regulation and the role of secondary legislation that will inevitably affect it. We should therefore consider whether the legislation provides sufficient clarity for businesses operating flexible models, whether it supports fair and predictable frameworks for all parties, and how future regulations will ensure that any changes to employment classifications or entitlements are based on clear, evidence-led analysis.
The question before us is not so much whether the gig economy is good or bad—it is part of the modern labour market, and it will obviously continue to grow and remain so. The more pressing question is whether the labour market is equipped to keep up with that evolution, and whether the Bill provides the right foundation for doing so. In that context, thoughtful and measured discussion about emerging work patterns such as dependent contracting, platform work, freelancing —which we discussed the other day—and other hybrid models are not only appropriate but very necessary. I look forward to further discussions with the noble Lord, Lord Clement-Jones, and others, on this subject.
Before I sit down, I thank the noble Lord, Lord Leong, for the great courtesy with which he has always conducted himself in his discussions and deliberations with our side. I enjoyed his valedictory remarks. I felt that he was perhaps slightly irked by the fact that we have had some relatively lengthy debates—perhaps because he did not agree with the premises of some of them. I would say very gently that that is the point of Committee; we are not supposed to agree, we are supposed to probe. As a former Home Office Minister, I have to say that these debates are not long; they are brief. These debates are like Usain Bolt; ours were like Mo Farah.
The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)
My Lords, I thank the noble Lord, Lord Clement-Jones, for tabling Amendment 318. He raises an important issue. As we have been discussing, the changing nature of work and the gig economy are a real challenge for us, and we recognise the complexity and shortcomings of the UK’s current employment status framework.
I can reassure the noble Lord that the Government have committed to consulting on a simpler framework for employment status, and this remains our intention. We have been clear that, as a result of the complexity, some of the reforms in the plan to make work pay will take longer to undertake and implement. We want to get the potential changes to the framework right, and we will consult on the fundamental aspects of employment law before taking action. I think that in part echoes the comments of the noble Lord, Lord Sharpe, who recognised the complexity and the need to think it through before we get it right. We are determined to follow this through and take action.
I am sympathetic towards the noble Lord’s aims to extend the protection of employment law. The self-employed make a huge contribution to the UK economy. As the noble Lord, Lord Sharpe, said, while many enjoy being their own boss and the flexibility that self-employment brings, others can find themselves highly dependent on one particular client with little choice, which can bring them challenges and problems.
I appreciate that the noble Lord is seeking to address this with his amendment by introducing a new employment status of “dependent contractor” and extending employment protections to those individuals. However, the amendment would further complicate what is already a highly complex area—one where, as I am sure the noble Lord knows, there have been several high-profile Supreme Court judgments in recent years. We want to avoid introducing an additional employment status before we have had the opportunity to reflect and consult further.
In addition, I can assure the noble Lord that the Government are committed to supporting and championing the self-employed. We have already announced a package of measures to help the self-employed thrive in good-quality self-employment, including measures to tackle late payments to small businesses and the self-employed. I urge the noble Lord to listen to our reflections and our determination to look at the whole issues around the gig economy, and to give us a little bit of space to do that. For this reason, I ask him to withdraw Amendment 318.
Lord Clement-Jones (LD)
Can the Minister say what the status is of the consultations she mentioned? She offered very reassuring words and said there was a consultation on employment status. Is that under way? Would that mean the idea is to eventually have an Employment Rights (No.2) Bill, which we would all look forward to debating? What is the exact status of what the Minister is reassuring us on?
Baroness Jones of Whitchurch (Lab)
This has come up several times in the debates we have had on the different aspects of employment status. We have said that we need to do further work on the employment status elements of the plan to make work pay. I do not think it is intended to come back and put that in this legislation. The consultation has not started yet, but there will be a thorough consultation. We are going to carry out a detailed piece of work on this, and we will come back with further proposals on how we are going to address it in due course. I hope that answers the noble Lord, even if not completely.
Lord Clement-Jones (LD)
My Lords, that ministerial “in due course” is not quite as good as “very, very, very soon”. I sense an awful lot of goodwill coming from the Minister, but this is a really important part of the economy. I appreciate the thoughtful comments from the noble Lord, Lord Sharpe. I did not expect a resounding endorsement of my amendment, but what he said about the evolution of employment rights and the need to make sure that our employment law is equipped to keep up with the way the modern economy is evolving is really important.
The Minister clearly recognises that we need to move forward in this area, but it is the pace and the fact that so many people—an increasing number—are now part of the gig economy. We see them passing every day: they do deliveries and are couriers—every form of the gig economy—and they have very few rights unless they have litigated, like Uber drivers or Hermes couriers, to establish them.
“Maximum pay ratio(1) A worker must be remunerated by their employer at a rate which is not less than one tenth of the remuneration made by the employer to the highest-paid employee.(2) The remuneration referred to in subsection (1) includes—(a) salary or hourly pay;(b) bonuses;(c) employer pension contributions;(d) shares, options, or other entitlements;(e) benefits in kind.(3) If a worker receives remuneration which is less than the entitlement referred to in subsection (1), the worker is taken to be entitled under their contract to be paid, as additional remuneration in respect of the period concerned, the difference between their entitlement and the remuneration actually received.”Member’s explanatory statement
This amendment would implement a maximum ratio of 10:1 between the highest- and lowest-paid employees in an organisation.
Baroness Bennett of Manor Castle (GP)
My Lords, my Amendment 320 sits in glorious lone splendour in this group. I am not responsible for degrouping it; that was the way it was arranged. Noble Lords will see that this is a proposed new clause to introduce a maximum pay ratio. I thank the Public Bill Office for assisting me with the drafting.
The noble Lord, Lord Sharpe, took us into celebrity land with Usain Bolt and Mo Farah. I am going further into that space with a forthcoming event from this week: the wedding of Jeff Bezos and Lauren Sánchez in Venice. I am relying here on the interesting reporting in the Guardian from Zoe Williams, who has been spending time with the campaign group No Space for Bezos and finding that in Venice there is considerable resistance to a billionaire taking over a city and totally disrupting the life of that city for three days. Williams quotes one of the local campaigners:
“We really wanted to problematise the ridiculous and obscene wealth that allows a man to rent a city for three days”.
Williams reflects in the article that
“when wealth itself is seen to be acting in its own interests, and it has accumulated to the degree that its impact scars every poorer life with which it comes into contact”,
we have a problem.
This amendment sets out Green Party policy—yes, this is long-time Green Party policy—but I am really aiming to assist the Government constructively here, and to assist the Committee as well as perhaps our national debate, by demonstrating that it is possible to lay down bridges to cross the deep fissures in our society. They are not just in Venice and they do not just involve Amazon—although I note that the Government have been applauding an expansion of Amazon here in the UK. We might think about how many of the small businesses we have just been talking about might go out of business as a result of that. I posit that it is essential to start to bridge these chasms, to tackle the poisonous inequality that so affects our political landscape.
Bringing the context closer to home, noble Lords may perhaps have expected me to cite research out only a week ago from the High Pay Centre, which analysed five years of mandatory pay ratio disclosures across the FTSE 350. This was a previous modest legislative attempt, hoping that shining a light on the level of inequality might have some impact in reducing that inequality. The study clearly showed that the attempt to do that has failed. The figures have basically bobbled around since 2019, and the current ratio of median CEO pay to the median UK employee was 52:1. That has been at a similar level ever since the ratio started to be recorded. I note that it is even worse for the FTSE 100, where the median CEO to median employee pay ratio was 78:1. Those are the middle figures but, if we take the widest measures, we go to the security and catering group Mitie, where 575:1 is the ratio not to the lowest-paid employee but to the median employee. At Tesco it is 431:1. This situation is doing huge damage to our society, and I put it to the Government that they surely have to tackle it.
A 10:1 ratio is Green Party policy. I know from the discussions that the Minister kindly had with me before this debate that she will not leap up and support my amendment, but I hope she may be able to provide some response, at least to acknowledge that we have a problem. The pay differentials also react to the low-pay environment in which those essential to the success of a business are not getting the respect, as well as the pay, that they deserve. Meanwhile, a few at the top are incentivised to chase short-term profits and share price valuation at long-term cost to society but also to the businesses that they head.
The impact on communities is evident in towns and cities, where the vast bulk of workers are now trapped on or very near the minimum wage, while money is shovelled away to faraway company headquarters. Companies defend these sums as reflecting performance, but all too often, as we have seen with the water companies, that is far from the case. Why is it that every worker does not benefit if a company is doing well, as they have all contributed?
I finally note that, yes, this is also an environmental measure. To take just one element of the CEO lifestyle, the wealthiest people in the UK burn through more energy in flying alone than the poorest use in every aspect of their life. Environmentally, as well as socially and politically, we cannot afford a society split between a few have-yachts and the majority have-nots.
Lord Hunt of Wirral (Con)
My Lords, I rise to speak to this amendment and, frankly, to express a degree of disbelief that such a proposal should have been made. With due respect to the noble Baroness, I do not believe that this amendment is a serious contribution to the debate on fair pay or responsible corporate governance. It is a piece of performative and ideological showmanship—a throwback to a worldview that sees profit as a vice, wealth as inherently suspect and enterprise as something to be managed, limited or downright punished. The idea that government should impose a legal maximum pay ratio—a flat arbitrary ceiling of 10:1 between the highest-paid and lowest-paid employees in every organisation—is not just unworkable but, I believe, economically illiterate.
First, this proposal would be a gift to bureaucracy and a curse to business. Every company, from high street shops to high-growth tech firms, would have to monitor and police every single form of pay—salary, shares, bonuses, pensions and benefits in kind—just to ensure that they do not cross an artificial line. Do we really want our job creators to spend their time calculating compliance spreadsheets instead of investing, innovating and employing? Secondly, it would actively disincentivise growth and ambition. High-performing individuals—those who drive investment, lead exports and create jobs—would simply leave and take their talent elsewhere.
The noble Baroness mentioned Amazon. I join the Government in welcoming the further investment that Amazon is making. As a matter of record, Amazon employs circa 75,000 people in the UK. No one is on zero hours, and the minimum annual starting salary is between £28,000 and £30,000 a year. It provides flexible working opportunities from day one, including term-time contracts, which allow parents, grandparents or carers guaranteed leave during school holidays. It offers paid parental and bereavement leave. Amazon also offers guaranteed hours from day one, and employees have the choice of full-time or part-time contracts. It is important to put the record straight. Since 2010, Amazon has invested more than £64,000 million in the UK, and £12,000 million in the last 12 months, and supports a network of around 100,000 UK-based small and medium-sized businesses. I welcome the opportunity that the noble Baroness has given me to put the record straight.
To go back to the noble Baroness’s amendment, it would mean that employers would be forced to avoid hiring lower-paid staff altogether, just to protect the ratio. What would be the result? There would be fewer jobs, less opportunity and more outsourcing—the very opposite of what a fair and inclusive economy should look like, hitting the least well-off, the most vulnerable and those at the margins of the labour market.
My third point is that this is not fairness; it is levelling down. It is virtually saying, “Don’t succeed too much, don’t reward excellence, don’t grow too big or too fast or be too profitable”. That is not fairness—it is anti-growth, anti-aspiration and anti-business. I must tell the noble Baroness that this amendment looks like it would be more appropriate in a Maoist economic manifesto, delivered to his revolutionary cadres, rather than a serious proposal for modern employment legislation. What this amendment reveals is not a serious attempt to solve a policy problem but a mindset that is suspicious of success, dismissive of wealth creation and entirely detached from economic reality. Against that background, I look forward to hearing the Minister’s response, which I hope will agree with mine, that this is an amendment that should not be accepted.
Lord in Waiting/Government Whip (Lord Katz) (Lab)
My Lords, let accord break out across the Table. I thank the noble Baroness, Lady Bennett of Manor Castle, for tabling Amendment 320. I do not share the disbelief of the noble Lord, Lord Hunt of Wirral, in hearing it, but only because I probably have more than the passing acquaintance with bits of the Green Party manifesto that he perhaps does—and that is the only reason for it.
It is right that companies should be sensitive to wider workforce pay when setting pay for those in the boardroom and other senior leadership positions. Company law and wider regulation already address that point. First, the Companies Act requires that UK listed companies must disclose and explain each year the ratio of their CEO’s pay to that of the company’s lower-paid and average-paid employees. Secondly, under the UK Corporate Governance Code, listed companies are asked to review workforce remuneration when setting directors’ pay and engage with employees to explain how executive pay aligns with wider company pay policy. Taken together, these measures provide important transparency and accountability in how UK listed companies deal with pay and incentives across the whole employee base.
Baroness Bennett of Manor Castle (GP)
My Lords, this has been a short but very clarifying debate on the political divisions in our society. I will be fairly brief in responding, but there are some points that I must pick up.
The response of the noble Lord, Lord Hunt, really sounded like something from a debate out of the 20th century. I started with the story of what will happen in the coming days in Venice because we are in the 21st century, where raging pay inequality is a huge political issue. If you are not prepared to acknowledge that that is an issue that is significantly shaping our politics, you really are not in the 21st century.
To pick up some specific points the noble Lord made, he said that the amendment would force people to monitor and police. However, as the Minister rightly said, all this monitoring and reporting already happens in FTSE 100 and FTSE 350 companies. It is the law already, so there is no extra paperwork to be done here at all.
The noble Lord, Lord Hunt, said that the amendment would disincentivise ambition, but ambition exists right across the board in companies. We have millions of cleaners, caterers and new apprentices out there who have huge ambition. Their ambition and the contribution they make absolutely need to be recognised.
I have to pick up the Amazon point. The noble Lord, Lord Hunt, missed a couple of things out about Amazon, which I describe as the great parasite. How many jobs has Amazon destroyed? How many ambulances get called to Amazon warehouses, where workers are worked beyond human flesh and blood in trying to keep up with robots? That is the reality of Amazon.
Finally, I come to the point the Minister raised about economic competitiveness and the best business talents. Yes, we need the best talents, but we need them across the board. One person as the leader of the company is a small part of that company. On the idea that this is a pyramid—the noble Lord, Lord Hunt, said these are the people who create jobs—I am sorry, but it is the whole of our society that creates jobs. You can put one of these CEOs on a desert island and they will not make a penny. The infrastructure, the workers and the customers—that is where the wealth comes from, and if we do not have a functioning society then we do not have successful businesses.
However, I am aware of the time and that there are some people in the Chamber who are undoubtedly waiting for next business, so I shall restrain myself from going on further. I shall look to come back with perhaps a more moderate amendment, but I will seek to hear from the Government what they plan to do about pay inequality, because I am afraid that I did not hear in the Minister’s response any answer to what they plan to do about that raging problem. I beg leave to withdraw the amendment.
“Review of safe homeward transport for workers(1) Within six months of the day on which this Act is passed, the Secretary of State must publish a review of whether workers should be entitled to access to safe homeward transport.(2) The review under subsection (1) must include—(a) an analysis of transport options generally available to workers who finish work after 11pm;(b) an analysis of the costs, in absolute terms and as a percentage of pay, to such workers of taking the available transport options;(c) best practice examples of employers who provide homeward transport for workers;(d) proposals to ensure that workers can travel home safely after 11pm without excessive cost.”Member's explanatory statement
This amendment would require the Government to review the safety and affordability of workers travelling home after 11pm, and make recommendations. It includes reviewing best practice, such as City firms who pay for homeward transport for workers late at night.
Baroness Bennett of Manor Castle (GP)
My Lords, this amendment would require the Government to review the safety and affordability of workers travelling home after 11 pm and to make recommendations, including reviewing best practice. I note that some City firms already pay for workers to travel home.
This is based on work being done by the Scottish Trades Union Congress and the “Safe Home” worker-led initiative launched in 2018 by the Better Than Zero campaign and supported by Unite the Union and the Bakers, Food and Allied Workers Union. It was launched following a women in leadership course in which workers from the hospitality, fast food and retail sectors shared their frightening experiences of getting home after a late shift. They included sexual assault, verbal harassment, violence and stalking.
Large numbers of workers in these sectors are not able to get home safely. Your Lordships’ House is very well aware of how limited late-night public transport can be—perhaps more than we would like to be. We currently have nearly 9 million night-time workers, of whom 15% are in low-paid roles, compared to 10% of employees as a whole. When you take into account restaurants, pubs and entertainment activities, that rises to 38%. Low-paid workers, many of them female, finish work at 11 pm, midnight or 1 am. How do they get home? This is a modest and constructive amendment which seeks to say that, if you are working hours during which society does not provide the transport to get you home safely, your employer has the responsibility to do so. I beg to move.
Lord Sharpe of Epsom (Con)
My Lords, I thank the noble Baroness, Lady Bennett, for bringing forward this amendment requiring a review of safe homeward transport for workers. I also welcome her back from her brief visit to the Maoist utopia on her last amendment. The safety and well-being of workers, particularly those finishing their shifts late in the evening, is a matter of significant importance. Many sectors operate outside traditional working hours, and the challenges faced by employees in securing safe and affordable transportation home after 11 pm are real and varied.
Understanding these issues is crucial, especially for vulnerable groups, including women and girls, for whom late-night travel can present heightened risks. It is also important to recognise that safe transport arrangements can contribute positively to worker morale and retention and may even play a role in reducing crime or accidents. The review has the potential to shed valuable light on current practices and challenges and provide a basis for informed discussion about how best to support workers who face late-night journeys home. I look forward to the Minister’s response.
Lord Katz (Lab)
My Lords, I thank the noble Baroness, Lady Bennett of Manor Castle, for tabling Amendment 321. We recognise the concern underpinning the amendment and agree that workers finishing late at night should be able to travel home safely and affordably. We are aware that for some workers, particularly those in hospitality, healthcare and security, late shifts can pose challenges when public transport options are limited. We also acknowledge and welcome that some employers, including firms in the City of London, have taken proactive steps to support their staff with safe transport home.
While we do not believe that it is appropriate to legislate for a review at this time, I hope I can reassure your Lordships’ House that we are committed to supporting workers’ well-being and safety. That commitment is evident throughout the Bill. For example, as we discussed on the second day of Committee in early May—another opportunity for a history lesson, it seems so long ago—the Bill strengthens the right to request flexible working from day one of employment. This flexible working provision empowers workers and employers to agree working patterns that better suit individual circumstances, including, where appropriate and reasonable, avoiding late finishes. We are also taking steps to improve enforcement of existing rights and to ensure that employers meet their obligations to provide safe working conditions.
Although it is not the subject of this legislation, the Government are also committed to reviving, rejuvenating and investing in public transport, not least through the Bus Services (No. 2) Bill, the creation of GBR, improvements to rail services and the huge amounts being invested across the country, particularly in the north, in new transport projects, all of which will provide a greater level of options and service for not just people working late but those who want to enjoy the night-time economy and to use public transport more generally.
While we cannot support this amendment, we share the underlying concern and will continue to work to ensure that all workers are protected and supported. I therefore ask the noble Baroness, Lady Bennett, to withdraw her Amendment 321.
Baroness Bennett of Manor Castle (GP)
My Lords, I thank those who have participated in this brief debate. I am glad that the noble Lord, Lord Sharpe of Epsom, and I can agree that there is an issue here and I thank the Minister for his response. I do not think that offering flexible working will really work with a pub or restaurant—that option will not be available. On public transport, for the workers affected, overwhelmingly we are talking not about grand infrastructure projects but local buses, which have been massively decimated over the last decade. None the less, the point has been made and I beg leave to withdraw the amendment.
Music Education: State Schools
Baroness Keeley
To ask His Majesty’s Government what steps they are taking to improve the quality and quantity of music education in state schools.
Baroness Keeley (Lab)
My Lords, I am co-chair of the Classical Music APPG, which I have chaired for more than 10 years. I have worked with the noble Lord, Lord Berkeley of Knighton, who has been my co-chair, as well as the noble Lord, Lord Aberdare, the noble Earl, Lord Clancarty, the noble Baroness, Lady Fleet, and other noble Lords.
During the last six years, there has been a strong message coming to us of a growing crisis in music education in state schools. I will start with a review of the issues in that crisis, inherited by this Government last July. However, first, I welcome the fact that my noble friend Lady Debbonaire will make her maiden speech in this debate. It was a pleasure to work with her in the shadow team in 2023 and 2024 when she was shadow Culture Secretary and I was shadow Minister for Music. It was also a pleasure to hear her play the cello in the string quartet, the Statutory Instruments.
At the heart of the crisis in music education in our state schools are issues affecting quantity and quality. The ones I want to highlight are the shortage of specialist music teachers and the problems of teacher confidence and expertise, lack of curriculum time for music, and declining uptake and inequalities in access to music at both GCSE and A-level. These issues have been explored in debates, and in reports to Parliament and to all-party parliamentary groups.
In the 2019 report Music Education: State of the Nation by the Independent Society of Musicians, we heard that the policy of the former Government around accountability measures, such as the English baccalaureate, has had significant negative impacts on music education in schools in England. We also heard that curriculum time for music, which is statutory for key stages 1-3, had reduced, along with opportunities for children to pursue music to GCSE and A-Level.
The report posed serious questions to be addressed regarding the music education workforce becoming demoralised because of the increasing marginalisation of music in our schools. It called on the Government to review and reform the EBacc and Progress 8 accountability measures or, at the very least, to add a sixth pillar to the EBacc for creative subjects, including music. The 2019 report of the Commons CMS Select Committee on the social impact of participation in culture and sport also recommended that the Government add arts subjects to the EBacc. More recently, in your Lordships’ House, the 2024 report of the Education for 11-16 Year Olds Committee recommended that the Government should:
“Abandon the EBacc school performance measures and review the other measures in the 11–16 phase”.
A 2022 survey of music teachers by the Independent Society of Musicians found significant variability in music provision, particularly in primary schools. It also found that the key stage 3 music curriculum had been progressively narrowed, mostly in academies, by placing music on a carousel or rota system, where it was offered for only part of the year, in rotation with other subjects.
The Cultural Learning Alliance’s Report Card 2024 highlighted that access to music education opportunities now varies greatly across the country, with 42% of schools no longer entering any pupils for music GCSE, and young people’s take-up of musical instruments and ensemble playing varying greatly by socioeconomic background.
I think we can say that all of this means that far too many young people are missing out on the benefits, experiences and opportunities that music education can bring. The curriculum and assessment review could play an important role in improving the quantity of music education in our state schools, because two of the issues that need to be resolved are the pressures on schools created by the accountability measures for the EBacc and Progress 8, and the lack of curriculum time for music.
Over recent years, Dr Adam Whittaker, of the Royal Birmingham Conservatoire, and Dr Anthony Anderson, of Birmingham City University, have worked on the issue of the significant disparities in access to advanced-level music qualifications across the country. I am grateful to Dr Whittaker and Dr Anderson for making several suggestions to improve the quality and quantity of music education in state schools.
The first recommendation is to ensure a sustained and universal music curriculum throughout a young person’s life. We are nowhere near this, particularly at secondary level, in many state schools, where report after report has shown that music education and opportunities are not being sustained.
I want to mention here the excellent work done up and down the country by orchestras, opera companies, churches, cathedrals and music projects working with schools and in the community. To mention just a few, the London Philharmonic Orchestra has the Music Makers and BrightSparks programmes for schools; the Royal Ballet and Opera’s learning programme reaches 100,000 pupils per year; Opera Holland Park has just held two performances of the opera “Itch” for local schools; and the National Schools Singing Programme has worked with over 36,000 children and young people. These enrichment activities are very important, but we must make sure that music at school is present as part of the curriculum for every young person.
The next key recommendation is for government to support the availability and uptake of formal music qualifications. A-level music has been a long-standing feature of the musical training of many musicians. However, last year there were five local authorities without a single level 3 music entry, including A-levels: Barnsley, Hartlepool, Knowsley, South Tyneside, and Barking and Dagenham. By comparison, in Hertfordshire there were 378 level 3 music entries, and in Essex there were 321. These inequalities start at GCSE, with Blackpool and Middlesbrough having just 35 and 53 entries for GCSE music, compared with over 1,400 in Hertfordshire. Low levels of entry in those areas highlight that music qualifications are not available to all young people in all local authorities. This matters because a child cannot choose a subject that local schools do not offer, unless they can afford to travel out of the area to go to another school—and they should not have to do that to get a music education.
National statistics confirm that there has been a marked reduction in the amount of time teachers are spending teaching music, despite substantial growth of the pupil cohort in secondary schools. Since 2011, the total number of teaching hours for music in secondary schools has fallen by over 6%. Most concerning is the decline in hours taught in examination school years, with school hours for key stage 4 declining by 9%. The largest fall in taught hours for music was for key stage 5, with a catastrophic fall of 40% since 2011. This reduction in hours shows that qualifications such as A-level music are being restricted, or just not offered, in school key stage 5 options in some areas. It may mean that, even where such qualifications are offered, they are not given the same proportion of teaching time that they were in 2011-12, baking in potential disadvantage for those who wish to pursue a musical pathway to higher levels of achievement.
State schools need to be supported by government to offer music qualifications right through to the end of key stage 5, even when only small numbers take up those options. A small subject supplement could be transformative. For example, Dr Whittaker and Dr Anderson estimate that a national 50% subsidy on all school-based level 3 music qualifications could be delivered for less than £750,000. If a scheme were targeted to address the disparities I mentioned, it could be delivered at an even lower level of funding. Support like this from government could help protect the progression routes for pupils into advanced music education.
The next key recommendation is to address the music teacher recruitment crisis and to invest in high-quality, reflective continuing professional development—CPD—for music teachers. There is a continuing and significant shortfall in the recruitment of music teachers, with an almost 60% shortfall against DfE’s recruitment target last year. While there are over 400 fewer secondary music teachers in total than there were in 2011, there are almost 1,200 fewer teachers at key stage 5—that workforce has declined by 35%. That loss of expertise may prove very difficult to recover, as not all music teachers are able to teach immediately at key stage 5, especially during their first year after qualifying.
The Ofsted subject report on music education, published in 2023, highlighted considerable differences in how well teachers teach music. The Ofsted report found that in some secondary schools leaders assume that because their music teachers are specialists, they do not require further subject-specific training, but this can result in significant gaps in their subject knowledge not being addressed. Access to CPD is critical for music teachers but it is problematic, because music teachers are often the only teacher in the department, so difficulties covering their absence mean that they are less likely to be released for CPD.
Dr Anderson and Dr Whittaker feel that bridging the gap between trainee music teachers and early career teachers in music, by investing in that reflective CPD, is one focus that could make a real difference. On costings, they say that, for less than £5 million a year, each secondary school music teacher could be released for one day for CPD, which could improve the musical lives of 3.2 million pupils, at a cost of only £1.56 per child.
We have only a very short time for our debate. I hope I have opened up some issues which need to be addressed. I look forward to hearing from my noble friend the Minister about government action to improve music education in state schools.
Baroness Fleet (Con)
My Lords, it is an honour to follow the noble Baroness, Lady Keeley, and I pay tribute to her for securing this debate. I declare my interest as chair and co-founder of the London Music Fund, and former chair of the model music curriculum and the national plan for music education. I am very much looking forward to the noble Baroness, Lady Debbonaire, making her maiden speech.
No Government in the last 25 years have done enough to support and promote music education. What do they not understand? Music brings young people together. It enriches lives. It helps emotional and social development. Music helps reading, listening, concentration and memory. And all this filters through to help with grades and exams. Music changes lives.
The previous Government made a start and published the national plan for music education in 2022, which was delivered by teachers working with music hubs across the country with guaranteed funding—it was never enough but a start. What did the Labour Government do? They pulled the plug on the national plan. Since then, there has been nothing but uncertainty and anxiety. Has funding been secured? No. Have music hubs been supported? No. Have specialist teachers been reassured? No. Have hubs been exempted from additional NI contributions? No. What are the plans to reduce the administrative burden on hubs?
Astonishingly, despite strong headwinds, many schools—not enough, but many—deliver outstanding music education. That is thanks only to the dogged determination of music leaders and teachers. We heard today that the brilliant music and dance scheme is secure for a year—but then what? As for the proposed national centre for arts and music, there is confusion and dismay. Will it be a new bureaucracy or just an information centre? There is no budget and no brief, just delay.
Schools can only build music departments with at least three years of funding, to allow everyone to plan properly. With the support of an ambitious trust, music could be delivered in every school. We await the Professor Becky Francis curriculum review. However, as of today, all those in music and the arts feel utterly let down by this Government.
Lord Shipley (LD)
My Lords, I thank the noble Baroness, Lady Keeley, for the opportunity to hold this debate, and I very much look forward to hearing the maiden speech of the noble Baroness, Lady Debbonaire.
First, I acknowledge the important work of the 43 music hubs as well as organisations that partner with state schools, such as the Church of England. I also acknowledge the excellent work of the many cultural organisations that promote young people’s participation in music, such as The Glasshouse, Gateshead—close to where I live—which makes an outstanding contribution.
Nevertheless, the evidence is clear: music is part of the national curriculum only to key stage 3. We need more secondary schools to teach music at GCSE level, because 42% of secondary schools did not have any GCSE entries in music in 2024. Worryingly, the vacancy rate for music teachers increased sixfold between 2010 and 2023, and teacher recruitment in music over the same period dropped by half. The result is that there are fewer students studying music at secondary level. In addition, over the last two years we have seen a drop of one-third in vocational qualifications in music achieved at level 2.
As the noble Baroness, Lady Keeley, reminded us, in 2019 the House of Commons Culture, Media and Sport Committee found that the introduction of the English baccalaureate—EBacc—had resulted in fewer students studying music at secondary level, because only GCSEs in English, maths, the sciences, one humanity and one language are measured for the proportion of students reaching grade 5. As the Select Committee said:
“We remain deeply concerned about the gap between the government’s reassuring rhetoric and the evidence presented to us of the decline in music provision in state schools, for which the Ebacc is blamed and which affects students from less advantaged socio-economic backgrounds disproportionately”.
What can the Government do about that situation? I hope that the Minister will tell us what plans they have to reverse the trend.
Lord Berkeley of Knighton (CB)
My Lords, I congratulate the noble Baroness, Lady Keeley, on securing this vital debate, and I am delighted to precede the maiden speech of the noble Baroness, Lady Debbonaire. When she was in the other place, the musical world was thrilled to have a former orchestral player in such an important position. I still enjoy seeing the cello case come down the Corridor, with the noble Baroness in close attendance. I am sure that she appreciates, all too significantly, the power of taking music into schools.
Yesterday, I recorded a conversation with the Children’s Commissioner, Dame Rachel de Souza, who said that her success in turning around failing schools was hugely due to music. What do we need to achieve that? We need an inspiring and passionate teacher and the opportunity to experience and perform music. Rachel mentioned the visit of a singer who left the children agog with wonder as she rose through the stratosphere with the famous aria from Puccini’s “La rondine”. As we heard, orchestral and operatic visits to schools are absolutely vital.
In light of the Oral Question yesterday from the noble Lord, Lord Brennan, about aid to live music, I have a suggestion for the Government: subsidise more visits to schools; up the number of peripatetic teachers; make sure that the hubs understand the policies and rationale behind the decisions; and do not tie them up in red tape and make them endlessly fill in forms about compliance.
I hope that Becky Francis will put creativity back in schools. I would like to see music back on the curriculum —that would make such a statement. Most importantly, more vital still, let us give children who are not advantaged the ability to listen to and make music. Surely that would be a natural step for a Labour Government, in relation to which the noble Baroness, Lady Debbonaire, is such a distinguished party member.
Baroness Debbonaire (Lab) (Maiden Speech)
My Lords, I am grateful to follow the noble Lord, Lord Berkeley. It has been a pleasure actually seeing him in real life, as opposed to just hearing him on Radio 3, which is still a great pleasure.
I rise for my first speech in your Lordships’ House. I am grateful to all noble Lords for the warm welcome I have received, and I am particularly grateful to my noble friend Lady Keeley—we really were a great team. I declare my interest as a member of the Musicians’ Union; the noble Lord, Lord Berkeley, has outed me as a cellist already.
Music and, more broadly, arts and culture are everywhere and everything: the tune we sing in the shower; the stories we read to children; the poems that I have tattooed—there really is something for everyone. Just saying that is not enough; we need to make a political case for the arts. The arts give us ways to dream and to imagine a better world. They are good for our economy, for our lives and for our planet. They give good economic return on investment for exports, tourism and jobs. The social return is enormous.
This is an ecosystem. The commercial and the non-commercial, the different art forms and the enormous range of skills—they all interact to sustain the whole. But much of this sector is threatened, as other noble Lords have referred to, and we risk losing our global reputation for excellence. I benefited from outstanding musical education, and I want every child to have that chance.
This ecosystem means that the person who started out at the National Theatre becomes a writer on “Succession”. It is why film soundtracks are recorded in the UK—because our musicians really are the best. A TV costume designer visits a museum to capture exactly how a suit of armour moves. A game’s creator was inspired by their art teacher. The ecosystem is essential, not optional.
When we do this right, music and the arts give enjoyment for everyone—and for people from all backgrounds to earn a good living. Opera, for example, as my noble friend will know, employs so many working-class people, from the chorus to the technicians. It truly is a way to make your way in the arts. When we do it wrong, opportunities become exclusive, and we allow talent to go undeveloped. When museums are honest about the stories behind their objects, they make better museums. When the performing arts are at their best, they tell better stories and have more excellent performers.
Fighting for the whole ecosystem, and for everyone to enjoy it, will always be necessary, and I will use my skills, my knowledge, my experience and my time in this place to make that political case while I am here. Thank you.
Viscount Stansgate (Lab)
My Lords, what an honour, privilege and pleasure to follow my noble friend Lady Debbonaire and congratulate her on her maiden speech. I do not think that I have ever been present for a maiden speech that has had to be made in more compressed circumstances as this, but even so, she spoke with great passion about a subject about which she knows a great deal and feels even more.
I congratulate my noble friend Lady Keeley on securing the debate. The fact that so many Members wanted to take part, and that we have such a short time, shows the Government Front Bench that, the next time this happens, we must have more time now.
I have only a minute or two, and I want to devote it all to praising my noble friend and what she brings to the House. She brings her musical talent. She brings her patronage of the arts. She brings her extensive experience over many years with women’s refuges; she was the national officer of the Women’s Aid Federation of England. She has authored books and papers about domestic violence and was the national research manager for the anti-domestic violence organisation Respect. She brings all this enormous and valuable experience to this House.
Of course, she brought that in equal measure to the other House. She was first elected a decade ago to represent the city of Bristol, which, I hope the House will understand, I have a lifelong family affection for. Five years later, she was already shadow Leader of the House, playing a busy part in the important parliamentary debates in the 2017 to 2019 parliamentary Session, before being appointed as shadow Secretary of State for DCMS. In that role, she did, if I may say so, an enormous amount to prepare for the Government who were elected in June last year.
I need hardly add, but I am proud to do so, that my noble friend is a cellist. She has performed professionally. Indeed, she still does, because she is a member—as Members may know—of the parliamentary string quartet, which has performed at both ends of the Palace of Westminster. I recommend it strongly when noble Lords get the chance. They are known as the Statutory Instruments because they used to rehearse in my noble friend’s office in the House of Commons, where piles and boxes of statutory instruments were used in lieu of music stands. I should perhaps declare an interest because my daughter, Emily, is the first violinist in the parliamentary string quartet.
I endorse everything my noble friend said in her maiden speech about the importance of music, and everything I have heard so far. When I look back on my own experience, my state secondary school had a fantastic music department: we learned to play instruments, and we had a choir and an entire orchestra. I do not think you can start music at too young an age. Both my children started at the age of five or just before; they do not know a life without music. I endorse everything that the noble Baroness, Lady Fleet, said about the importance of music to people’s lives. It is absolutely crucial. Both my children went on to study at the Royal College of Music. While there, they played in youth orchestras and toured over Europe, which is exactly why I am so strongly in favour of any moves to help improve the relationship for creative artists touring in Europe.
There is more I could say—my time is up—but we must not allow music to become the preserve of the private sector. I end by saying that I hope my noble friend enjoys a long and distinguished career in the House, and that the next time we hear from her there will be much more time to hear her opinions, judgment and passion. I hope the whole House will at least agree with that. Many congratulations to my noble friend.
Lord Aberdare (CB)
My Lords, until recently, I chaired a charity aimed at inspiring young people with a love of classical music. We developed teaching resources for schools based on Berlioz’s “Symphonie Fantastique”, branded as Fantastique! for Schools. Schools that used them were delighted with them, but scaling up proved challenging.
How can we do more with the resources and dedication already out there from teachers, hubs, musicians, orchestras, opera companies, choirs, venues, charities, grant-givers and, of course, parents? We need a better awareness of what is actually available. Perhaps a central hub run by the proposed new national centre for arts and music education could signpost resources and guidance for schools.
We should also actively share good practice and success stories. Recent events hosted by the Opera APPG in the Jubilee Room have showcased some inspiring examples: a class of 20 violinists from an east London primary school; a school choir which sang in ENO’s “La Bohème”; and a class of ocarina players reading music at sight. Examples such as these show how music fosters discipline, behaviour and learning, and could motivate other schools.
We should encourage more partnerships and less fragmentation, but none of this will work without enough trained music teachers, including part-time, non-specialist and peripatetic music teachers. The Government should focus on recruiting, training and retaining them, and ensuring they have time in the curriculum and the support they need to turn the national plan for music education from fantasy into reality.
I have enough time to congratulate the noble Baroness, Lady Debbonaire, on her magnificent speech in such a short time. I have now overrun.
Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)
I respectfully say to noble Lords that we need to keep to the two-minute limit so that we have time for the Minister to respond.
Lord Black of Brentwood (Con)
My Lords, I declare my interest as chairman of the Royal College of Music, of which the noble Baroness, Lady Debbonaire, is a distinguished alumna. We have had countless debates on this subject over the years. Each time another comes along I feel a growing sense of frustration—indeed anger—because, for all the fine words, we never seem to make progress. It did not make me popular with my colleagues at the time, but I was very critical of the previous Government for their failure to act to secure better music education in state schools.
As music should be a bipartisan issue, I hoped that, with the change in Government, we would finally see some progress. But it is a year on from the election and still nothing has changed: no progress on post-Brexit visa issues, the curriculum, funding, or the long-term financial sustainability of the hubs and the music and dance scheme, both of which are forced to exist from hand to mouth.
Because this inaction has been going on for so long, there is now a real danger of terminal damage to the entire music ecosystem, which depends totally on the ability of talented young musicians to be able to progress from their earliest years to the start of their careers. It is a complex and intensive pipeline which depends on music and singing in primary schools, the easy availability of peripatetic teaching, professional music teachers, entry to a conservatoire or university with dedicated but intensive one-to-one teaching, and then career opportunities. It cannot be left to chance. It needs understanding from government and a co-ordinated, strategic approach.
At the moment, we do not have that, as government is not joined up, with policy spread across at least four departments. No one is in charge and there is no coherent, functioning national plan. That must change and quickly. We need someone to take overall responsibility. We need to establish long-term commitments to and sustainable funding of the hubs and the MDS. We need action on the curriculum and we need to make music an attractive profession for young people to enter, which means sorting out touring visas and ensuring we have a proper copyright regime in place to tackle the threat of AI. I hope that next time we have a debate there will be meaningful progress on all these issues.
The Earl of Clancarty (CB)
My Lords, I congratulate the noble Baroness, Lady Keeley, on her comprehensive introduction and the noble Baroness, Lady Debbonaire, on her passionate maiden speech.
In Keir Starmer’s Guildhall speech in March last year, he said that
“from day one, Labour will reform the school accountability framework, to make sure arts count”.
Day one is long gone, but the accountability measures, which have nothing to do with the curriculum per se, are still with us. We should remember that both the EBacc and Progress 8 were introduced to prioritise academic subjects and therefore lessen the importance of arts subjects. Removing them is an essential prerequisite for improving not just music education in our schools but arts education more generally. Music needs to be fully brought back into our schools and the resources and funding should be made available to do so, as they should be for all art subjects.
On the pipeline, the sectoral plan published yesterday was a plan for the more commercialised end of the creative industries. It was not a plan for the arts. Depressingly, the cuts to DCMS funding announced in the spending review appear to confirm this. I understand the Government’s wish to capitalise on the areas which are already highly commercial—it is what the previous Government did—but that combination of local authority and DCMS funding allowed both necessary and innovative work in music, including classical music, dance, theatre and the visual arts to flourish, while feeding into the commercial end of the ecosystem. This requires, and has always required, government investment, which nevertheless gets repaid many times over both artistically and financially, as the recent Arts Council England report Leading the Crowd demonstrates. We urgently need that plan—a plan for the arts—because without it even a good music education will be worth far less.
Baroness Ramsey of Wall Heath (Lab)
My Lords, as the Government’s important curriculum and assessment review continues, this is a timely debate. I am very grateful to my noble friend Lady Keeley for securing it and for the opportunity to contribute alongside so many noble colleagues. I particularly enjoyed listening to my noble friend Lady Debbonaire’s wonderful maiden speech, not least as I know full well her commitment to this cause.
Children have a right to know about the best music that has been written, from Bach to Bernstein to Beyoncé. Although 99% of adults will not earn their living as a musician, they will all listen to music, attend concerts or gigs and enjoy the stimulation of a beautiful song or symphony. Learning to compose and perform is every bit a blend of skill and intuition as learning to read books, a new language or the beauty of mathematics. My husband, a proud owner of both a master’s degree in mathematics and a piano, asked me to add that last bit.
The discipline of understanding a chord sequence sitting below a melody that makes you want to whistle or hum in the street is not just entertaining but an academic discipline in its own right. Music education is not about a top-set culture; every child can engage in music at whatever level makes most sense for them. Some children who find much of school difficult only attend because of their music teacher. They attend because, in a music lesson or extracurricular club, they can succeed and therefore feel that they belong in school. Many schools have deployed their pupil premium funding to provide music lessons for this very reason: so that disadvantaged children can feel successful. Precisely for this reason, their reading, writing and maths improve too.
With the curriculum review that a number of noble colleagues have mentioned coming to its final conclusions, now is the time to ensure that music education plays the fullest possible part in all children’s schooling.
Baroness Wheatcroft (CB)
My Lords, I give my congratulations to the noble Baroness, Lady Keeley, on securing this valuable debate, and to the noble Baroness, Lady Debbonaire, on her fascinating maiden speech.
So far, we have all sung from the same hymn sheet: we want more and better music education in state schools. The last Government shared that aim, but their national plan managed to be simultaneously inadequate and yet wildly ambitious. I am sure this Government embrace the same aims, but they are not getting anywhere close.
We know that music is fundamental to improving the education attainment of all children. The provision of instruments is crucial. It makes an enormous difference in deprived schools for children to have an instrument of their own, to play in an orchestra, to be part of a team. It takes them out of gangs and into positive teams. The provision of instruments was promised—there was going to be £25 million for instruments and equipment—but the guidance on accessing that money was almost impossible, and I doubt that any of it has been handed over so far.
One can only sympathise with teachers who try to eke out what they have in the storeroom—a few triangles and the odd recorder. We know that those orchestras that can survive make a huge difference. We must thank Andrew Lloyd Webber and the wonderful work of the Music in Secondary Schools Trust, and we need some more help for them.
However, given that money is tight, I want to make a special plea for the importance of music in maths—we all know the importance of maths in society today. New research shows that the early indications are that maths can help not only if it is taught separately but if the teaching of maths and music is integrated—that makes a difference to both. I urge the Government to look at possibility of merging early years education in maths and music.
Lord Kirkham (Con)
I declare an interest as deputy patron of Outward Bound and former chair of the Duke of Edinburgh’s Award. Those charities both focus on engaging children in challenging outdoor activities, but music has exactly the same potential to build resilience, self-confidence, perseverance and teamworking skills, boost mental health and deliver life-enhancing satisfaction, in real time, away from mobiles, tablets and screens.
In a world where artificial intelligence will eat up jobs, it is surely vital that children leave school with a wide range of interests and hobbies. Yet here we are going backwards from times when everyone started the school day singing together in assembly, as a relentless focus on STEM subjects squeezes out music and culture—as if possessing soft skills in the arts does not make better scientists and technologists. There are music hubs, but in reality, to access those, a child needs middle-class parents who know what is available and can push to get it.
What of future professional musicians? The Government support these through the Music and Dance Scheme, funding means-tested, subsidised places at specialist independent schools. At the Purcell School, one of the leaders in the field, 70% of pupils are receiving state support, delivering effectively a government programme to enable gifted but disadvantaged children the opportunities for social mobility through the arts.
Music is under pressure of both time and money at every level of our education system, and it richly deserves and needs more of both. Government should focus not on cost but on value, and the importance of music to education and society—to life—is invaluable.
Lord Harries of Pentregarth (CB)
My Lords, in stressing the importance of music education in schools and the lack of it at the moment, so ably emphasised by the noble Baronesses, Lady Keeley and Lady Debbonaire, I want to draw attention to the contribution the Church of England is making to the musical education of our young people.
Portsmouth Cathedral, for example, uses parish Choir Church projects and its Cathedral Sing project to widen participation in music education across the diocese, and working with more than 2,000 children a year. Sheffield Cathedral is teaching nearly 1,000 children each week. In some of its partner schools, over 100 languages are spoken, and it is prioritising the schools reflecting the greatest disadvantage. Liverpool Cathedral, in partnership with Liverpool John Moores University, is also deeply engaged with its local community. Sheffield, Portsmouth and Liverpool dioceses are examples of cathedrals where the choirs deliberately recruit from a wide range of schools, state and independent, urban and suburban, and actively seek both boys and girls.
Choirs with well-established heritage choir schools are also widening participation and supporting local schools with great success, and they are seeing increased diversity within their cathedral choirs. St Paul’s, for example, is working with 12 primary state schools across the diocese of London through its choral partnership programme, and it has seen multiple children from its partner schools join the cathedral choir on cathedral scholarships.
Choral music and singing are a fundamental part of the cultural heritage of the country. Cathedrals and churches, which are already playing their part in the musical education of young people, are very open to increasing their contribution in co-operation with state primary and secondary schools, and we hope the Government will be able to build on that.
Baroness Ritchie of Downpatrick (Lab)
My Lords, I want to congratulate my noble friend Lady Keeley on obtaining this debate, and of course I congratulate my noble friend Lady Debbonaire on her passionate maiden speech.
There is no doubt from all the speeches tonight: we have heard of the importance of music in the curriculum as a tool to develop our children and the need for children to have equal and fair access to such a music education to develop their talents and skills. To give a perspective from Northern Ireland, there are inequalities in access to and in the provision of music education: rural versus urban, more affluent areas against economically disadvantaged areas, and of course in the Northern Ireland context, segregation and sectarianism also play a part. Those inequalities in access to music provision in schools have led to students not being able to develop their talents in music and the dramatic arts, while those who have had the access have excelled on the global stage.
However, what is most important is the role of music education in the state sector for those with special needs and the role with the voluntary sector in ensuring inclusion, development of voice, and dexterity with musical instruments. Therefore, I ask my noble friend the Minister whether she will ensure that best practice in music education throughout the UK is shared, and that the role of the voluntary sector along with education providers is celebrated as they provide music and drama arts against funding and staff challenges to ensure the further development of all children within the state sector.
Lord Freyberg (CB)
My Lords, I add my congratulations to the noble Baroness, Lady Debbonaire, on her excellent maiden speech and to the noble Baroness, Lady Keeley, on securing this debate.
Music education cannot flourish without expert teachers, but recruitment into initial teacher training for music has fallen by 76% since 2020. While a £10,000 bursary is now available, music trainees must still pay £9,225 in tuition fees. The support is welcome, but they are almost certainly taking on significant debt to train. In contrast, maths and physics trainees receive nearly three times as much—enough, in many cases, to cover both fees and living costs. This disparity sends a clear and damaging message: that music matters less.
Government messaging matters. When adverts highlight high bursaries for other subjects but omit music, we should not be surprised when our best graduates look elsewhere. We need national campaigns that champion music teaching, celebrate its impact, and make it clear that becoming a music teacher is not only valued but vital.
We must offer music teachers career pathways that keep them in the classroom. The restoration of schemes such as the advanced skills teacher programme would help us retain the best and allow them to mentor the next generation. Further, we must support school leaders. Too often, music is squeezed out by the EBacc, confined to carousel timetables or forced into silent, worksheet-led lessons. Music is practical, messy and joyful. If head teachers misunderstand this, children miss out. The Government must help leaders understand what high-quality music education looks like, provide clearer guidance to head teachers and trust music teachers to deliver it.
Finally, on music hubs, 2024’s restructure created complex compliance-heavy consortia that add workload without benefit. Funding is top-sliced and local expertise marginalised. If the Arts Council cannot make the system work in practice, it is time to ask whether it is the right body to oversee it.
Lord Wallace of Saltaire (LD)
My Lords, I welcome the maiden speech of the noble Baroness, Lady Debbonaire.
I declare my interest as, for 10 years, the chair of the VOCES8 Foundation, which combines music performance with taking singing into schools. We were shocked when we began to go into primary school after primary school where there was no teacher with any musical knowledge. We developed ways of getting students to sing together in catches and in parts. All the evidence is—the Institute of Education did a study—that if you get pupils to sing together, and, even better, to sing in groups, competing and combining with each other, it lifts the school as a whole and it lifts the sense of common purpose.
Co-operation with outside bodies is therefore fundamental, and I hope that the Minister can reassure us that this Government believe in that. The most depressing meeting with a Minister I have ever had was when VOCES8 went in to see Nick Gibb, who told us his views on musical education, which I vaguely remember from my primary school a very long time ago.
Music hubs are a problem. I note that south-west London, which has an excellent music hub in Wandsworth, to which my grandson goes every Saturday, has not yet agreed the new reorganisation. I have read very critical comments on the reorganisation. I hope that the Minister can reassure us that this is not going to lead to a greater weight of bureaucracy on the hubs now imposed over their other counterparts.
In conclusion, I have been extremely lucky; not only did my children go to a state secondary school which had a strong musical tradition but my grandchildren now go to a Church of England secondary school, St. Cecilia’s—the clue is in the name—in Wandsworth, which has an excellent music tradition. If you go to Wimbledon this year, you will hear the St. Cecilia’s school band playing on one of the days in the first week and the Wandsworth Music orchestra playing on another day—all state school children, and my grandson will be playing in both of them.
The Earl of Effingham (Con)
My Lords, I thank the noble Baroness, Lady Keeley, for securing both this important debate and her Oral Question today. I thank the noble Baroness, Lady Debbonaire, who correctly highlighted the social return of music.
We know that music has the ability to enrich lives, so it is worrying that the future of music education is at risk. In government, we introduced 43 music education hubs and committed £70 million per year of funding for those very hubs. We announced the music progression fund, which was piloted by Young Sounds UK, to support up to 1,000 young people from low-income families over four years. The UK Music chief executive has called on the Secretary of State for Education to turbocharge music education funding and invest in 1,000 new music teachers, as has Ed Sheeran in his open letter to the Prime Minister. So we must ask: what are the Government’s plans to recruit more music teachers?
A survey of 2,200 music teachers by the British Phonographic Industry found that 20% of primary school teachers reported that there is no regular music lesson for their class, and the majority are not taught by a music specialist. Almost 40% of secondary schools now have no compulsory music lessons in year 9. Surely this should be ringing alarm bells.
What are the Government doing to address the drop in pupils taking GCSE and A-level music? We recognise that the Government have plans to launch a new national centre for arts and music education, but, as the noble Baroness, Lady Fleet, so well highlighted, there is very little detail other than that the centre
“is expected to be established in September 2026”.
That is 15 months away. As Ed Sheeran said in his letter, signed and backed by over 500 signatories from the world of music:
“We’re losing time … The time to act is now”.
Please can the Minister provide clarity?
Baroness in Waiting/Government Whip (Baroness Blake of Leeds) (Lab)
My Lords, I thank everyone in the Chamber for such a rich debate, especially given the time pressures that we are all facing. I thank my noble friend Lady Keeley for opening this valuable debate. She is such a great advocate for music education, and I think we should all be very grateful to her. Many noble Lords have considerable expertise and experience in this area, and it has been my privilege to talk to many of them over the last few months.
I start by thanking my noble friend Lady Debbonaire for her tremendous maiden speech. I am delighted that she was able to make a contribution in her maiden speech to this debate on the importance of the quality and quantity of music education in schools. I know that this is a subject dear to her heart. As we have heard, she will continue to make a valuable contribution to this House, and we can all look forward to it. I particularly echo her sentiment that we all need to be fighting for the whole ecosystem. What a powerful contribution. I also thank the noble Viscount, Lord Stansgate, for his very warm words and acknowledgement of his family connection to this subject.
This Government are clear: music education must not be the preserve of the privileged few. I assure the noble Lord, Lord Wallace, that as part of our opportunity mission, we want to widen access to the arts, including music, so that young people can develop their creativity and find their voice. This is important in its own right. As the noble Lord, Lord Berkeley, said, creative exploration is a critical part of a rich education. It helps young people to find opportunities and it powers growth in the creative industries, while raising self-esteem and resilience and contributing to young people’s well-being, as so many noble Lords have said.
Participation in the arts can bring wider benefits for children and young people. We have heard about the connection to maths, but there are outcomes in other curricular areas as well, as picked up by my noble friend Lady Ramsey and the noble Baroness, Lady Wheatcroft. I have mentioned before that I saw this first hand with Opera North’s project “In Harmony”, delivered in the most deprived schools in Leeds, with every child learning a stringed instrument. The impact on their maths attainment was incredible. We must all look at these examples, and I reassure my noble friend Lady Ritchie that we must look across the UK and at all the different voluntary groups that can be involved. As my noble friend Lady Keeley mentioned, many other organisations, such as the London Philharmonic Orchestra, are making sure that high deprivation is targeted, enormously benefiting those young people.
I assure the noble Baroness, Lady Fleet, that, as I have said before in this Chamber, the work done under the national plan is not lost and is being used. This work will be integrated moving forward, and I thank her and the noble Baroness, Lady Bull, for their contributions. As part of our plan for change, we are committed to ensuring that arts and culture thrives in every part of the country, with more opportunities for people to engage in and benefit from work in the arts and culture where they live. The Government have announced over £270 million of investment in our arts venues, museums, libraries and heritage sector, made up of multiple funds including an £85 million creative foundations fund, to name just one. We are continuing the generous tax reliefs.
Turning to lack of government action on touring, for example, at least this Government have had a meeting with our EU counterparts. Those discussions are part of the European Union reset, and we look forward to the outcome of those talks. As per the commitment in Labour’s Creating Growth plan, DCMS is undertaking a review, documenting current and past funding for the arts, culture and heritage sector, as referenced by the noble Lord, Lord Berkeley.
The noble Earl, Lord Clancarty, raised pertinent points. We have discussed these measures a great deal, but I point to the independent review undertaken by Arts Council England. It will examine whether the regions have access to high-quality arts and culture, and whether everyone is able to participate in and absorb culture and creativity regardless of their background.
We want every child, regardless of background, to have a rich, broad, inclusive, innovative curriculum that includes creative subjects such as music. That is why the independent review, chaired by Professor Becky Francis, is looking at all subjects, including music, and seeking to deliver a curriculum that prepares young people for life and work, including in creative subjects and skills. It is being informed by evidence and data, in close consultation with educational professionals. That there have been more than 7,000 responses to the public call for evidence perhaps explains why it will take some time to pull that together, but we are expecting a final report in the autumn, along with the Government’s response.
We will consider the associated implications for accountability measures such as EBacc and Progress 8, mentioned by my noble friend Lady Keeley, and look at teacher time and all the wider implications that the review has been charged with bringing in. We are legislating so that, following the review and implementation of reforms, academies will be required to teach the reformed national curriculum alongside maintained schools. This will give parents certainty over their children’s education. Also, academies will be able to adapt the curriculum to meet the needs of their pupils. I was very interested in the example of Blackpool versus Hertfordshire. As an aside, my nephew is a peripatetic music teacher at Hertfordshire.
I can assure the noble Lord, Lord Freyberg, that reorganisation will not create additional workloads for music hubs. Responding to the noble Baroness, Lady Fleet, music hubs play a vital role in communities across England, supporting children and young people and providing opportunities for them to progress. We have heard about the range of services on offer, and the Government continue to support this crucial programme. Music hubs grant funding of £76 million has been secured, and longer-term funding will be confirmed in due course. To widen access to musical instruments, the Government are investing £25 million in capital funding for instruments, equipment and technology.
We heard about the music and dance scheme from the noble Lord, Lord Kirkham, and we absolutely recognise the importance of specialist training. That is why the Government continue to provide generous support to help students access specialist music, committing £35 million over the next academic year. The details of that have been well profiled. This important scheme provides means-tested bursaries and grants, again making sure that young people do not miss out.
There are so many areas to cover on government support for the arts, which was raised by the noble Baroness, Lady Fleet, and the noble Lord, Lord Shipley. We have not mentioned the Government’s announced investment of over £270 million in venues in the plan for change, ensuring that arts and culture thrive in every part of the country. Generous tax reliefs also provide £3 million to expand the creative careers programme; it is critical that young people get to realise their ambition.
There has been much comment on high-quality teaching, which is fundamental and will make the biggest difference to children’s outcomes. That is why the Government’s plan for change is committed to recruiting an additional 6,500 new expert teachers across the sector. We are also offering a teacher training incentive package worth £233 million, which is a £37 million increase on the last cycle and includes a £10,000 tax-free bursary. We are seeing positive signs and an increase in initial teacher training numbers. They are going up, but there is still much more to do.
As the noble Lord, Lord Aberdare, mentioned, we need to showcase good practice, and I believe that the national centre for arts and music education will enable us to do just that. That is why in March we announced our intention to launch the new centre, offering excellent arts education and building on existing support for music education.
The music opportunities pilot targets disadvantaged pupils and those with SEND. We are investing £2 million to support it over a four-year period. It is delivered by Young Sounds UK in 12 areas of the country.
This has been a rich debate, and I know that this will continue to be a subject of much interest. I pay tribute to the noble and right reverend Lord, Lord Harries, for his contribution. The department is providing a grant of over £210,000 to the Choir Schools’ Association, recognising its choir schools scholarship programme offering means-tested support to choristers attending different schools.
I apologise for the whistle-stop tour through this. I have 30 seconds left to finish the debate, and it has been a pleasure to be here. In closing, I underline this Government’s commitment to ensuring that all children can access and engage with high-quality music education in and through their schools and leading into their careers. Creative subjects such as music are a vital part of a rich, broad school experience and to our economic success. As I said when I started, we must all work together to make sure that they are not the preserve of a privileged few.
Employment Rights Bill
Tuesday 24th June 2025
(1 day, 16 hours ago)
Lords ChamberEmployment Rights Bill 2024-26 View all Employment Rights Bill 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 81-XI Eleventh marshalled list for Committee - (20 Jun 2025)
Lord Norton of Louth
“Review of the Act(1) The Secretary of State must—(a) carry out a review of the operation and effect of this Act,(b) set out the conclusions of the review in a report,(c) publish the report, and(d) lay a copy of the report before Parliament.(2) The report must be published before the end of the period of five years beginning with the day on which this Act is passed.(3) The report must, in particular—(a) assess the extent to which the objectives intended to be achieved by this Act have been achieved, and(b) assess whether those objectives remain appropriate and, if so, the extent to which they could be achieved more effectively in any other way.(4) In carrying out the review, the Secretary of State must publish an invitation for interested parties to make submissions on the operation of the Act.”
Lord Norton of Louth (Con)
My Lords, this amendment provides the means to check that the Bill, once enacted, achieves the purposes for which it is intended. It is a more comprehensive amendment than several that have been debated already, which provide for a review of certain provisions within 12 months of the Act coming into force. I shall argue that the relevance of the amendment goes beyond the Bill itself.
Too often in the past, legislative success for a Minister was seen as a Bill receiving Royal Assent. In evidence to the Constitution Committee’s 2004 inquiry into Parliament and the legislative process, former Clerk of the Parliaments Sir Michael Wheeler-Booth and Professor Vernon Bogdanor noted that,
“all too often, Parliament forgets about legislation once it has reached the statute book”.
Legislative success should be seen not as getting a Bill on the statute book but rather as delivering on what Parliament intended it to deliver.
As the then leader of the House of Commons, the noble Lord, Lord Hain, told the Constitution Committee,
“there is no point in passing legislation if it is not having the desired impact or it is having a different impact”.
Recognition of that point led the committee in its 2004 report to recommend that most Bills should be subject to post-legislative scrutiny within three years of their commencement or six years from their enactment, whichever was the sooner. In 2008, the Government accepted that Bills should normally be subject to review three to five years after enactment, a policy reiterated by Ministers in recent months. Indeed, in January this year, the noble Baroness, Lady Twycross, reported that the Cabinet Office had written to departments reminding them of the importance of post-legislative scrutiny.
In practice, not all Bills are subject to post-legislative review by departments. Some have undertaken thorough reviews, but the enthusiasm for completing them appears to differ between departments. Earlier this year, I asked whether the Government would encourage departments to emulate the Home Office, which had engaged in detailed post-legislative scrutiny of the Counter-Terrorism and Border Security Act 2019. There is a compelling case for ensuring that, in respect of certain Bills, post-legislative review is put beyond doubt through being embodied in the measures themselves.
There are precedents for including within a Bill a provision for post-legislative scrutiny. The most recent incidence is the Football Governance Bill. The Government, to their credit, accepted the argument that the Bill should provide for post-legislative scrutiny and brought forward their own amendment on Report to give effect to that proposal. The wording of my amendment may appear familiar to the Minister as it is taken from the Government’s amendment to the Football Governance Bill.
Bills that meet certain criteria should contain such a provision. The criteria I propose are that the Bill is large, is complex, makes substantial changes to the law, is contested and has not been subject to pre-legislative scrutiny. Bills that meet some but not all of the criteria may be considered for incorporating such a provision. A Bill that is not large but meets the other criteria should normally be considered for embodying provision for such scrutiny.
Each year your Lordships’ House usually appoints a special inquiry committee to engage in post-legislative scrutiny of an Act or group of Acts, such as the Mental Capacity Act or adoption legislation, that generally do not meet any of the criteria I have mentioned. That we select measures of this type for such scrutiny is not an argument against enshrining post-legislative scrutiny in some Bills but rather the reverse. We steer clear of Acts that are large and contentious. We are not likely to select the measure before us for post-legislative scrutiny in a few years’ time. Our scrutiny should complement that undertaken by government of measures covered by these criteria.
The arguments for post-legislative scrutiny of major Bills are several. There is the effect on drafting—knowing that a measure will subsequently be subject to review helps to concentrate the minds of Ministers and drafters in preparing the Bill. It serves to prompt a clear adumbration of purpose—of delineating the basis on which one will know whether the measure has achieved what it was designed to do. Perhaps most importantly, knowing that it will subsequently be reviewed may serve to reassure critics of the measure. That was especially helpful in the context of the Football Governance Bill. I think it applies in the case of this Bill.
Above all, providing the means of checking whether a measure has or has not met its aims and identifying what needs to be done to rectify any problems with its delivery contributes to good law. The Office of the Parliamentary Counsel has previously defined good law as law that is
“necessary, effective, clear, coherent and accessible”.
I have defined it as law that is well intentioned, well drafted and well implemented. Some of these features need to be checked during the Bill’s passage, but others, especially being effective or, in my terms, well implemented, are best tested through post-legislative scrutiny. As one Minister told this House’s Select Committee on the Mental Capacity Act 2005,
“while getting the Act onto the statute book had been a success, ensuring that it was fully implemented and understood was ‘work in progress’”.
This Bill clearly meets the criteria I have outlined. It is large, complex, makes a substantial change to employment law, is clearly contested and was not subject to pre-legislative scrutiny. The Committee has considered more than 330 amendments over 11 days. There are clearly disputes about the principles it embodies and its effect. Putting a provision for post-legislative scrutiny in the Bill, thus ensuring such scrutiny, meets the purposes I outlined.
The Minister may remind us that the Bill will be eligible for post-legislative review in any event, but this amendment puts it beyond doubt. If the Government have confidence in the Bill, they should have no problem in accepting the amendment. Critics may be reassured that, as with the Football Governance Bill, its effects will be reviewed. The amendment sets out the review to be undertaken before the end of a period of five years, and what the review in particular must assess. It also requires the Secretary of State to publish an invitation to interested parties to make submissions on the operation of the Act.
As I say, the provisions replicate those in the Football Governance Bill, omitting only the parts that are specific to football and do not lend themselves to replication in other measures. I urge the Government to build on what they have already achieved in the Football Governance Bill and establish best practice in embodying within this Bill provision for post-legislative scrutiny. Utilising the criteria I have detailed limits the number of Bills that merit such a dedicated provision. This Bill does merit such a provision, and I hope the Minister will demonstrate that the Government have the confidence to embrace it. I beg to move.
Lord Hunt of Wirral (Con)
My Lords, I welcome the opportunity to pay tribute to my noble friend Lord Norton of Louth. He is not only a great author and academic, but he is regarded as a world authority on constitutional issues, and he has certainly been described as the greatest living expert on Parliament, so we take very seriously his very constructive suggestion for post-legislative scrutiny.
However, I rise to speak to Amendment 335, standing in my name, which would introduce a sunset clause ensuring that the Act will expire after three years unless the Secretary of State demonstrates that it has led to a net increase in employment. I do so against a background of economic data emerging in recent months painting a deeply concerning picture of the UK labour market. The UK’s jobless rate ticked up to 4.6% in April, while payrolled employment has fallen sharply, according to official figures covering the period when the Budget tax hikes on businesses came into effect.
We had an understanding that some of us would attempt to put together an overall view of what is happening in the jobs market at present, but the response from the business community to this Bill has been unambiguous and deeply troubling. The Institute of Directors has published research showing that more than seven in 10 business leaders—72%—believe that the Bill will have a negative impact on the UK’s economic growth. This is not a marginal concern expressed by a vocal or unrepresentative minority; it represents a clear majority of all those who create jobs in our economy.
Even more alarmingly, half of business leaders reported that they would be less likely to hire new staff as a direct consequence of this legislation. Let that statistic sink in. We are therefore considering legislation that, according to those who make the hiring decisions, will directly reduce employment opportunities for British workers.
These employment figures do not exist in isolation. They form part of a broader pattern of economic decline that, sadly, has accelerated since this Government took office. The combination of increased employer national insurance contributions, the various tax rises announced by the Chancellor and now this additional regulatory burden create a perfect storm of disincentives to business investment and job creation.
We are now witnessing the practical consequences of economic policies cobbled together on the basis of wishful thinking and political prejudice by people with little or no first-hand experience or understanding of how businesses operate in practice. When costs rise, businesses must respond. They cannot simply absorb infinite increases in regulatory compliance, tax obligations and employment-related expenses. The rational response is to reduce costs where possible—and, unfortunately, employment costs are often the largest element in business operations as well as the most unpredictable.
Throughout the debates on this Bill, both the Ministers opposite and their colleagues in the other place have maintained that it will not harm employment. They have repeated this assertion with remarkable consistency, despite mounting evidence to the contrary. This represents either a fundamental misunderstanding of basic economic principles or a deliberate choice virtually to ignore inconvenient evidence.
The Government appear afflicted by a sustained delusion that they can simultaneously increase the costs and complexity of employment while maintaining that employment levels will be unaffected. This surely defies both economic logic and empirical evidence. It is rather like claiming that one can increase the price of a product while ensuring that demand will remain unchanged, simply by insisting that it must be so.
We have to entertain the possibility that we on these Benches are wrong. Perhaps the business community is wrong. Perhaps the Office for Budget Responsibility is wrong. Perhaps the employment statistics are, at best, misleading. Perhaps the correlation between increased business costs and reduced hiring is merely coincidental. Perhaps economic theory and established business common sense are for the birds. My amendment is designed to test the Government’s confidence. If Ministers are indeed confident that this Bill will benefit workers and boost employment, they should graciously accede to this amendment and demonstrate to us all their unshakeable iron confidence that this is not, after all, an unemployment Bill.
Baroness Lawlor (Con)
My Lords, I will pick up on a few of the points made by my noble friend Lord Hunt to support Amendment 335 wholeheartedly. In principle, I am in favour of sunset clauses because they help us to focus on a Bill not once but twice, as they will pass legislative scrutiny twice over, and they encourage us to make better law. There are very practical reasons for Amendment 335. We have a 4.4% unemployment rate—or we did up to November last year—and it is increasing, with 1.7 million people in this country unemployed.
This Bill, as we have heard time and again—I know the Government disagree, but the figures speak for themselves—will increase the cost of and burdens on employing people, restrict job entry and limit new posts being advertised. The number of job vacancy adverts is decreasing. Since the Government came to power, the tally I mentioned earlier—I am sorry to repeat it—is 115,000 jobs lost. At this rate, there is a very good reason to support such an amendment. I hope the Government will take on board that we must consider a sunset clause in case unemployment rises and employment levels go down significantly in three years’ time.
The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)
My Lords, I thank the noble Lord, Lord Norton, for tabling Amendment 323C and the noble Lord, Lord Hunt, for Amendment 335. I pay tribute to the expertise of the noble Lord, Lord Norton, in this area. I reassure the noble Lord that, despite Amendment 323C’s positive intentions, it effectively repeats what the Government already intend to do.
Our impact assessment sets out a clear plan to monitor and evaluate the effects of the Bill and its secondary legislation, following standard government practice. This approach will help us assess how well the measures are delivering on their objectives, inform future policy-making and review the real-world impact on all stakeholders, whose contributions we recognise as vital to the strength of our economy. As is standard practice, in line with our Better Regulation Framework obligations, we also intend to conduct a post-implementation review of the Bill within five years of Royal Assent. This will provide sufficient time to assess the policy’s effectiveness and gather sufficient data for evaluation purposes.
In the case of the fair work agency, ongoing oversight of employment rights enforcement is provided for in Clauses 91 and 92. They require the Secretary of State to publish a three-year labour market enforcement strategy and annual reports, which must be laid before Parliament and the Northern Ireland Assembly. Secondary legislation made under the provisions in this Bill will also be subject to the requirements in the Small Business, Enterprise and Employment Act 2015 regarding proportionate monitoring and review.
In addition, where further detail will be set out in secondary legislation, the majority of statutory instruments will be subject to the affirmative procedure, allowing both Houses to consider them in detail and providing Parliament with sufficient opportunity for scrutiny and debate. Furthermore, the Government will consult on many of the details to be set out in secondary legislation, listening to the expertise of business, trade unions and civil society to ensure that the details of the regulations are appropriate to the current needs of the labour market.
On Amendment 335, in the name of the noble Lord, Lord Hunt, we want to ensure that workers have these rights for life and not just three years, as the noble Lord proposes. As a result, we oppose his amendment. As is typical with employment legislation, further details on many of the policies in the Bill will be provided through regulations after Royal Assent. We will begin consulting on these reforms in 2025, seeking significant input from all stakeholders. We anticipate this meaning that the majority of reforms will take effect no earlier than 2026. We are committed to getting the detail right. This means listening to and incorporating a wide range of views into our policy development.
While headline statistics, such as employment and unemployment rates, may appear strong by historical standards, millions of workers are stuck in low paid, insecure and poor-quality work that is detrimentally affecting their financial stability and health. The UK’s productivity slowdown is more severe than in other advanced economies. A fragmented labour market and too much insecure work are holding back growth and investment. We also lag behind the OECD average on employment protections, and we have paid the price. The UK economy has not grown at the average rate of other OECD economies in the last 14 years, missing out on £171 billion-worth of growth. Average salaries have barely increased from where they were 14 years ago, and the average worker would be over 40% better off if wages had continued to grow as they did leading into the 2008 financial crisis.
This Bill will ensure a fairer, more equal labour market and deliver wider benefits to the business environment by improving well-being, incentivising higher productivity and creating a more level playing field for good employers. Consider a few of the changes it will bring: over 10 million workers in every corner of the country will benefit; increased well-being alone could be worth billions of pounds a year; there will be less workplace conflict, which costs UK employers about £30 billion a year; and up to 1.3 million employees will gain a new entitlement to statutory sick pay, increasing total sick pay by £400 million per year.
The noble Lord, Lord Hunt, spoke about the way businesses are perceiving this, but, as my noble friend Lord Leong said, business confidence is actually rising. The latest Lloyds Business Barometer survey shows business confidence at a nine-month high, with rising hiring expectations among businesses. I have to say to the noble Lord, Lord Hunt, that a sunset clause would create business uncertainty at the very time when we want to build on that confidence. The industrial strategy, which we published yesterday, has been welcomed by all sectors of business and will help to build that long-term strategy for growth.
Given the benefits the Bill will bring for workers over the long term, we oppose the noble Lord’s amendment and will continue to promote growth for businesses and the level playing field for good employers. With this in mind, I ask the noble Lord, Lord Norton, to withdraw Amendment 323C.
Lord Norton of Louth (Con)
My Lords, I am grateful to my noble friend Lord Hunt of Wirral and the Minister for their contributions to this short debate. Obviously, I am very grateful for their opening comments; it seems to be something on which I have united the two Front Benches.
I am very grateful for the Minister’s considered response. I would prefer it to be in the Bill for the reasons I have given, but I feel I have achieved something this evening as she has come to the Dispatch Box and made the commitment she has, which is valuable because it ensures the Bill will be subject to a review of the kind I seek. Although I would have preferred that to be in the Bill, this short debate has achieved something.
If the Bill is subject to post-legislative review, it picks up on the points made by my noble friend Lord Hunt of Wirral because, with the claims he has made about the Bill, it will be a chance to test whether it has delivered. It is important that post-legislative scrutiny is thorough in the way that some departments most definitely have done it for some Bills, which I welcome. My whole point is to encourage that. It is something I will return to, not necessarily on this Bill but on others, to ensure we achieve the same result. I am grateful to the noble Lord and to the Minister for what they said and beg leave to withdraw the amendment.
Lord Berkeley
“Substitution clauses and the definition of “worker” in app-based work(1) The Employment Rights Act 1996 is amended as follows.(2) After section 207B, insert— “Substitution
207C Prohibition of substitution clauses in platform-based logistics work(1) A relevant company must not include a clause in its contractor agreements that permits substitution in the performance of services, unless—(a) the company can demonstrate that such substitution is operationally viable and genuinely offered to all contractors, and(b) the identity of any substitute is subject to the same training, vetting and approval standards as a directly contracted individual.(2) A clause purporting to allow substitution that fails to meet the criteria in subsection (1) shall be unenforceable and void, and the individual shall be treated as a worker under section 230(3).(3) In this section—“dependent contractor” means a person who—(a) performs services arranged through the company’s platform;(b) is paid per task or service delivered;(c) is not classified as an employee or worker by the company;“relevant company” means a company that—(a) provides services in relation to food and beverage delivery, postal and courier operations, or private hire transport via a digital or app-based platform, and(b) engages more than 250 workers or dependent contractors globally.(4) A clause purporting to allow substitution that fails to meet the criteria in subsection (1) shall be unenforceable and void, and the individual shall be treated as a worker under section 230(3).”(3) In section 230 (employees and workers), after subsection (3), insert—“(3A) For the purposes of subsection (3)(b), a requirement to perform work personally shall be deemed to exist unless the right to substitute—(a) is genuine, exercised in practice, and not fettered by contractual or practical limitations imposed by the contracting entity,(b) is not subject to prior approval or vetting by the company, either directly or indirectly, and(c) forms a meaningful part of the way in which services are actually delivered.(3B) Where the work involves the use of a digital platform to allocate real-time, location-based tasks in sectors including—(a) food and beverage delivery,(b) postal and courier services, and(c) taxi and private hire operations,any contractual clause purporting to allow for substitution shall be treated as void and of no effect, unless the company can demonstrate that the right of substitution is genuine, practical, and routinely exercised.(3C) A substitution clause in a contract for services of the type described in subsection (3B) shall not, by itself, be sufficient to establish that an individual is not a worker.””
Lord Berkeley (Lab)
My Lords, the new clause proposed in Amendment 323E in my name has been given the rather surprising title “Substitution”, and one or two noble Lords may be wondering what that means, so I will try and explain. It refers to the substitution of people with the intention of avoiding paying tax, national insurance or anything else. It is a problem that has grown like Topsy over the last five years.
Noble Lords will remember how many times in the last year we have debated whether electric scooters should go on the road or the pavement and whether we should have electric bikes. More recently, we have been debating electric bicycles with big trailers behind them, usually pulling Deliveroo or something like that. While many of us think that it is a great idea to have green transport, when you start looking behind the way that this part of the industry is created, it does not look quite so good.
I am not going to go into the road safety element, because we are not in a road safety debate tonight, but there are other safety implications concerning the people who drive these vehicles. There are questions concerning, first, the extent to which they should be in the country at all and, secondly, whether they are paying the right amount of tax—and that is before we get into any other thing that might be driver related.
Noble Lords may have read a big spread in the Sun today, which I think is coincidental. It reads:
“Asylum seekers are cheating the taxpayer—with illicit Deliveroo and Just Eat accounts offered to them within ten minutes of asking”.
It goes on to explain that there are people selling Deliveroo driver accounts to migrants even while they are on the rubber dinghy coming across the channel from Calais. That makes it very nice for them, because they know they are being taken on and do not have to look for a job. That is one problem. I am not going to repeat the rest of the article as it will take all night, but it is well worth reading the reasons behind this.
The other issue is that these drivers riding the bicycles seem to be very adept at getting their friends to substitute for them. The friends may have no qualifications, driving licence, residence or anything else, and are probably not recognised, so they carry on driving these things, frankly, illegally. That is before we get to the questions of why there is no enforcement in relation to these people’s driving ability or whether they should be here at all. I am not going to go into any greater depth on what is wrong. As we all know, this is a serious problem in London, but it is also a problem elsewhere.
The amendment is quite complicated, but then employment law is complicated. My friends in the cycling and walking community, who are really fed up with this, look upon this amendment as a matter of safety, but they also are asking, “Why should people get away with doing this when they probably are not paying tax or anything else?”
The wording of the amendment is designed to cover the most popular parts of the industry, such as food and beverage delivery, postal and courier delivery, and taxi and private hire operations, as well as probably many others. It is to make sure that, if people are hired by one of these companies to drive these vehicles and go on particular routes, they actually do it rather than subcontract the work to somebody else who has no qualifications at all. I have not yet seen any convictions for people found guilty of what you might call substitution, but I expect it will happen soon.
Lord Russell of Liverpool (CB)
As a loyal member of the All-Party Parliamentary Group for Cycling & Walking—with an emphasis on the cycling rather than the walking—I support the noble Lord, Lord Berkeley, on this, and I will explain why. As he indicated, what is behind this amendment is partly what is leading certain noble Lords around the Chamber to pepper the noble Lord, Lord Hendy, with a series of curveballs about e-bikes in all sorts of shapes and illegal forms.
The All-Party Parliamentary Group for Cycling & Walking has just issued a rather alarming report called Unregulated and Unsafe: The Threat of Illegal E-Bikes. It has a specific chapter in it called:
“The role of delivery platforms and the gig economy”.
This evening, we are talking about two intertwined issues. First, there is an employment law issue. At the heart of the Bill is a wish by our new Government to rebalance what they view as an imbalance that has occurred during successive Conservative Administrations between the rights of workers, particularly unionised workers, and the rights and freedoms of employers. Whatever your view on that, what we are talking about today is a good example of an area of employment that is using slightly questionable tactics to avoid recognising its rights and responsibilities towards its workforce.
Your Lordships may recall that, a few years ago, when the phenomenon of Uber started taking over and assailing the black cab business here in London, there was a long debate and a big issue around Uber claiming again and again that the people who were driving for it were not its employees. In successive cases, it was taken to court and eventually it had to admit that the people who drive for it are actually employees and have some rights as employees.
We have a very similar situation with delivery platforms. These are the delivery platforms where, if you have a craving for a peanut butter and pineapple pizza at 3 o’clock in the morning—which, being married to an Italian, I certainly hope you do not—you can simply reach for your smartphone and it will be delivered to your door fairly quickly.
Those large platforms are basically doing what Uber did originally. They do not recognise the people who are driving for them as employees; they are said to be contractors—indeed, they allow the contractors to nominate people to substitute for them, people who have no commercial or contractual relationship with the company whatever. One of the larger delivery platforms, related to Deliveroo, successfully managed to win a case in the Supreme Court brought by the Independent Workers Union of Great Britain, which was aware that this particular arm delivered food around London and other cities, largely using unregulated and very fast e-bikes. The company successfully argued against the union that these were not employees, and it used the fact that the people who ride for it could substitute others as part of its defence, which was accepted by the High Court. So we clearly have a strange loophole here that is harmful for those workers and is driving all sorts of unfortunate behaviour.
In evidence, I turn back to the report of the all-party group and the issue about the role of delivery platforms and the gig economy. In its written evidence, London Councils said:
“Many delivery companies are set up as Platform companies, with riders classed as self-employed so companies are therefore not required to provide health and safety measures. Platform companies only take an advisory role in safety standards for riders, not mandating vehicle mode or collision reporting, therefore avoiding any financial implications. This means there are no checks and balances in place for the safety of the vehicles used for deliveries, the riders themselves and the impacts on other road users”.
In respect of evidence from one of the platforms—Just Eat, which noble Lords may have seen written on the back of mopeds with L-plates on or illegal e-bikes—the report said:
“Pay for riders per drop has declined in recent years, requiring ever longer shifts with ever more deliveries per hour in order for a rider to earn sufficient money”.
We see vehicles or e-bikes constantly jumping red lights, narrowly missing pedestrians and weaving in and out of traffic, but they are doing it because the way in which they are compensated requires them to make the maximum number of deliveries in the shortest possible time, which obviously encourages speeding and avoiding road traffic laws, red lights and things like that. I suspect that many noble Lords or members of their families have had experiences of looking around rather nervously even when they cross a zebra crossing because of what may suddenly assail them.
Lastly, this is written evidence—and it is a tribute to the noble Baroness, Lady Blake of Leeds, who is not in her place because this is not a Bill that she is involved in—from Leeds City Council, which has the same problems. It says:
“In addition to the safety of e-bikes, we would like to work with government to improve the industry’s employment and verification practices to address account sharing, where couriers can substitute deliveries to others who may not have a right to work in the UK. FDC [food delivery companies’] business models currently rely on riders themselves to confirm their eligibility to work, and this can enable illegal working. Alongside this, we would like to cover how to reduce the time pressure on riders to make deliveries, driving hours, and platforms’ responsibility for their riders’ safety”.
The councils have made a compelling case for this, as has the noble Lord, Lord Berkeley. I suggest that for the Government to look at this would align with much of their intent in this Bill.
Lord Hendy (Lab)
My Lords, I feel obliged to add a word to my noble friend Lord Berkeley’s amendment, because I was counsel for the union in the Deliveroo case which the noble Lord, Lord Russell, has mentioned. The issue in that case was slightly tangential to that raised by my noble friend; the question there was whether Deliveroo riders were among those entitled to the trade union rights and benefits of Article 11 of the European convention. We need not go into that.
The Supreme Court held that the presence of a right of substitution in the contracts between the Deliveroo riders and Deliveroo meant that they were not entitled to those trade union rights. That reflects the situation in English law under the definition of a worker in the Trade Union and Labour Relations (Consolidation) Act and the Employment Rights Act, which requires personal service. The courts have held that that excludes workers who have the right to engage a substitute, even in situations such as that with Deliveroo where the Central Arbitration Committee held that its use was rarely if ever put into operation. It was never used by those who brought the case.
The relevance of all this is that, as the noble Lord, Lord Russell, mentioned, the categorisation of workers—whether they are an employee, a limb (b) worker, which Uber drivers are and the Deliveroo riders wanted to be, or an independent contractor—determines what rights they are entitled to under the various statutes. I accept that my noble friend the Minister will say that the status of workers will be consulted on in future. I completely agree that it should be approached holistically. As someone who has put up two Private Members’ Bills on the status of workers, both of which succeeded in this House with all-party support, I am happy to offer him my drafts. The matter has to be dealt with holistically. However, my noble friend Lord Berkeley has a point. This use of substitution clauses is a device to deprive workers of the statutory rights that Parliament intended them to have. It is an abuse that could be addressed now in this Bill before we get to the consultation on the status of workers generally.
The noble Lord, Lord Russell, and my noble friend Lord Berkeley indicated some of the consequences of the abuse of these substitution clauses. I will articulate two more. First, as I have mentioned, where platform companies insert a substitution clause in the contract between the rider or the contractor and the platform company, the effect is to deprive them of all employment rights. When I say that the platform company inserts the clause, that is what happens—there is no agreement, consultation or collective bargaining; they are simply told, “If you want to work, you agree to the substitution clause”. It is a device. In the Deliveroo case, it was, in effect, accepted that that was the purpose of the insertion of the clause.
Noble Lords have already articulated the second problem. Since the Deliveroo case, substitution clauses have become extremely widespread and the use of actual substitutes, which was rare in the Deliveroo case, has now become very frequent and involves illegal working and so on. But—this is the final point I want to draw to your Lordships attention—think of the workers who are engaged as substitutes: they are being paid even less than the contracted riders; they are being exploited. They are the people who, as the noble Lord, Lord Russell, pointed out, speed through the traffic, risking their lives to make as many deliveries as possible. It is an abusive situation and this might be a moment to deal with it, in advance of the general consultation and the legislation that will be required to regulate the status of workers generally.
Baroness Neville-Rolfe (Con)
It is a pleasure to follow the noble Lord, Lord Hendy, and the thoughtful contributions from the noble Lords, Lord Berkeley and Lord Russell of Liverpool.
I think I was responsible for some of the curveballs on illegal e-bikes and e-scooters that have peppered this Chamber in recent years. I regard their operation as dangerous, especially for elderly people and the disabled—“a Wild West” is the phrase I used before I became a Minister and learned my P’s and Q’s.
I hope the Minister will agree to the request from the noble Lord, Lord Berkeley, for a discussion on what can be done to tackle the current loopholes, even if nothing can be done in this Bill. It is an important matter and we should try to progress a solution.
Lord Palmer of Childs Hill (LD)
My Lords, Amendment 323E, tabled by the noble Lord, Lord Berkeley, is a curious but important proposal, addressing a very real challenge in the evolving world of work. The noble Lord, Lord Russell, pointed this out, as has the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Hendy.
The amendment seeks to clarify that substitution clauses in app-based platform work, such as food delivery, courier services and private hire transport, are valid only where the right to substitute is genuine, viable and actually used in practice. As many of us will know, much of our employment legislation was developed in an era when the labour market looked very different. The rise of app-based platforms and the gig economy has created new forms of work that do not always fit into the traditional categories of employment or self-employment, as has been said by previous speakers.
This amendment seeks to clarify one such grey area: the use of substitution clauses in platform work. It rightly asks whether these clauses are, in practice, genuine and workable, or whether they are being used to deny individuals the worker status that they would otherwise be entitled to. The noble Lords, Lord Russell and Lord Hendy, and others have explained in detail how that works in practice.
The broader point is that the Government must ensure that our workers’ rights framework is not stuck in the past. It must be up-to-date and dynamic enough to reflect the modern patterns of work and provide reasonable security for those engaged in them.
Too often, the flexibility of gig work is celebrated without enough attention being paid to the insecurity that can come with it: uncertain hours, low pay—which has been mentioned, including lower pay than the normal driver—and limited recourse to rights. Ensuring that the legal definitions we rely on are not open to exploitation is a vital step in protecting workers and maintaining fairness in the labour market. As other noble Lords said, this amendment may not be the final word on the matter, but it makes an important contribution to a conversation—the noble Baroness, Lady Neville-Rolfe, used the word “discussion”.
I give my compliments to the noble Lords, Lord Hendy and Lord Russell, and the noble Baroness, Lady Neville-Rolfe, and others for this conversation—or discussion. I hope that the Minister and the Government will see that there is a gap in employment legislation that needs to be looked at. We ought to deal with people, such as couriers and drivers, who are substituting to people paid even lower wages—and then scooting in front of you at the traffic lights, trying to push up the number of deliveries or collections they are making—in primary legislation, not in a statutory instrument somewhere down the line. I hope that the Government will look at this before we get to Report.
Lord Sharpe of Epsom (Con)
My Lords, it is a pleasure to follow the noble Lord, Lord Palmer, with whom I agree pretty much entirely.
This has been a much more fascinating debate than I was anticipating, and that says a lot more about me than it does about the debate. I was particularly struck by the comments from the noble Lord, Lord Hendy; I had no idea that such practices had been accepted by the courts. That seems to be one of the cases, as we discussed in an earlier group, where the gig economy workplace is evolving rather faster than the law. That clearly needs to be looked at, otherwise we will end up with what seem to me, as a lay man, relatively perverse situations.
I have to say to the noble Lord, Lord Russell, that the thought of a peanut butter and pineapple pizza sends a rather nasty shiver down the spine. Do people really eat that? I would seriously hope not.
The gig economy and platform-based work are obviously integral parts of the modern labour market. We should not forget that the sector offers flexibility that many workers value, because it allows people to choose when, where, how much and how they work. For some, that flexibility is vital; it means they can balance their work with other commitments or supplement their income in ways that traditional employment models do not allow.
I completely agree with the noble Lord, Lord Berkeley, who introduced his amendment so eloquently, that there seems to be an incentive to come to this country. If we were able to control this, there would be an opportunity to help at least stem the flow of the boats, which is something that used to occupy a lot of my time.
On the amendment before us, which seeks to regulate the substitution clauses and redefine certain worker classifications, at this stage, we approach it with some caution, while acknowledging that it is clearly a subject to which we should all return and which demands further consideration. The intention to protect gig economy workers is commendable, but we should not make regulatory changes that unintentionally undermine the entire industry. With that in mind, I look forward to the Minister’s comments, but I do not believe that this subject will go away any time soon.
Lord in Waiting/Government Whip (Lord Katz) (Lab)
My Lords, I thank my noble friend Lord Berkeley for tabling Amendment 323E and everyone who contributed to this short but important debate on the issue of substitution clauses.
To be absolutely clear, the Government are very alert to the risks that my noble friends Lord Berkeley and Lord Hendy and the noble Lords, Lord Russell of Liverpool and Lord Palmer of Childs Hill, all raised on substitution. We recognise that substitution in the platform economy is an issue, and we share the concerns about the impact that it can have on working conditions and the prevalence of illegal working.
Some of the critiques that my noble friend Lord Berkeley made about e-bikes and e-scooters, and some of the comments made by the noble Baroness, Lady Neville-Rolfe, fall a little outside what we are talking about tonight. One only has to be in the Chamber at Oral Questions on a regular basis to understand that noble Lords across the whole House share concerns about the impact that e-bikes and e-scooters are having on general society, as well as their attitudes towards the noble pursuits of cycling, walking and sharing public spaces.
There is growing awareness of substitution clauses and their use to deny workers core protections, including the national minimum wage and holiday pay, as set out by many noble Lords this evening, particularly the noble Lord, Lord Russell of Liverpool. Clearly, in extremes this can lead to abusive and exploitative treatment of workers, and we are looking at it closely.
My noble friend Lord Berkeley raised the issue of illegal working as reported in today’s edition of the Sun. It is important in considering this issue to realise that the Government recently introduced an amendment to the Border Security, Asylum and Immigration Bill on Report in the other place to extend the scope of the requirement on employers to carry out right to work checks on limb (b) workers or individual subcontractors, such as those working in the platform economy.
We must remain in step with modern labour market models. The purpose of these changes is to require businesses that employ individuals in new labour markets to check that only those with a right to work in the UK are eligible to participate in these arrangements, and to enable Immigration Enforcement to issue penalties where they are not. This ensures that compliance is equivalent for traditional employers. That, as I understand it, is the core of the issue raised in the newspaper report described by my noble friend Lord Berkeley.
The links between substitution and employment status demonstrate how complex this area is. As my noble friend Lady Jones said earlier this evening in discussing Amendment 318, we are committed to consulting on a simpler employment status framework. My noble friend Lord Hendy said that we should look at this holistically. I am confident that this will provide an opportunity to hear views from a wide range of stakeholders on the use of substitution clauses and the interactions with employment status. This is an important issue, but I am also aware that there is a complex interplay with measures we are going to discuss shortly in Committee on the Border Security, Asylum and Immigration Bill. In that context, it might be useful for me to take this back to colleagues in the Home Office and see how best to pursue it further.
I therefore ask my noble friend Lord Berkeley to withdraw Amendment 323E. In so doing, as this will be my last opportunity to speak in Committee, I would like to take this opportunity to thank all noble Lords who have taken part in the wonderful 11 days in Committee on this Bill for their constructive engagement and, indeed, at times, stimulating debates—who would have thought we would get so many days in Committee? I take note of what the noble Lord, Lord Sharpe, said earlier about the pace of progress during immigration legislation. As I am going to be on the Front Bench for the Border Security, Asylum and Immigration Bill later this week, all I can say is: I simply cannot wait.
Lord Berkeley (Lab)
My Lords, I am really grateful to noble Lords who have taken part in this short debate and made many contributions, which indicate that it is a difficult subject and it would the better if the whole thing went away. But of course, it will not go away. When my noble friend the Minister said that this is his last appearance on the Bill, I thought, “Well, is it a sinking ship or is it going to the next stage?” I hope it is not a sinking ship, and that there is going to be another good stage.
Lord Katz (Lab)
To be clear, we are in Committee. Who knows what comes next?
Lord Berkeley (Lab)
We had a problem up in the Committee room last week with the mice eating through the electric cables. We have got a few problems here.
More seriously, it is a big problem. We only covered probably a small fraction of it tonight, but I would be very grateful if the Minister agreed to meet those of us who are interested, sometime between now and Report, to see how we can take it forward in one way or another. I am not sure which way “forward” would be; but otherwise, it is very tempting to put another amendment down on Report and have another debate like this. It would be much better if we could all sit around a table for half an hour and hear what the Government want to do, and hopefully agree—or hopefully not. Is my noble friend about to say yes to that?
Lord Katz (Lab)
Over many years now, I have had lots of interesting discussions with my noble friend, in different guises. It is always a pleasure to meet with him—and indeed with any other noble Lords who wish to engage on this important issue.
Lord Berkeley (Lab)
I am most grateful to my noble friend. On that basis, I beg leave to withdraw the amendment.
Lord Hunt of Wirral
Lord Hunt of Wirral (Con)
My Lords, I rise to move Amendment 324A and to speak to Amendments 324B and 324C on behalf of my noble friend Lady Coffey; I will also speak to my opposition to Clause 151 standing part of the Bill.
Baroness Jones of Whitchurch (Lab)
My Lords, I thank the noble Lord, Lord Hunt, for giving notice of his opposition to Clause 151 standing part, which gives me the chance to set out the purpose of that clause, and for speaking to Amendments 324A, 324B and 324C, which, as I understand it, are probing amendments.
Clause 151 grants the Secretary of State a power by regulations to make amendments to other legislation which are consequential on any provision made by the Bill. Consequential amendments are fundamental to ensuring that the statute book remains coherent and workable. It is a Henry VIII power similar to the ones used in previous legislation of similar size and complexity. It allows the amendment of Northern Ireland legislation, as it does Acts of the Scottish Parliament and the Senedd Cymru. This is necessary to allow the statute book across all UK jurisdictions to be maintained effectively.
None the less, the power in Clause 151 is appropriately constrained because it allows only amendments which are consequential to the substantive amendment already made in the Bill itself. For these reasons, we consider it both necessary and proportionate. I also remind noble Lords that the Delegated Powers and Regulatory Reform Committee did not raise concerns about the power in Clause 151 in its report, to which we will reply in due course.
I reassure noble Lords that, where possible, amendments to other pieces of primary legislation that are required as a result of the provisions made in this Bill have been made in the Bill itself, as my noble friend Lord Leong set out earlier. However, it is possible that further provisions could still be identified that require consequential amendment. Allowing these to be made by regulation will mean that they can be made without delay and with an appropriate level of parliamentary scrutiny. This is a standard power in a Bill of this size and complexity. There are multiple examples in legislation from recent Conservative Governments that took the same approach, including the Police, Crime, Sentencing and Courts Act 2022 and the Economic Crime and Corporate Transparency Act 2023.
Amending the clause so that any exercise of the power would be subject to the affirmative procedure would result in debates on every consequential amendment, which we believe would be disproportionate. For these reasons, the Government oppose these amendments, and I hope that I have reassured the noble Lord, Lord Hunt of Wirral, that the power this clause vests in the Secretary of State is proportionate. I therefore ask him to withdraw Amendment 324A.
Lord Hunt of Wirral (Con)
My Lords, I thank the Minister for her response to the concerns that I raised during this debate. However, I remain unconvinced by the Government’s justification for these sweeping powers. As we have said on several occasions already, there are far too many delegated powers in the Bill as it stands. To extend this approach to all consequential future provisions represents a qualitative leap in executive authority that goes well beyond what is necessary or constitutionally appropriate.
I recognise that the Minister has given assurances about responsible use of these powers, which, no doubt well-intentioned, cannot substitute for proper parliamentary oversight built into the legislative framework itself. We are being asked to sign a blank cheque, drawn on the account of parliamentary sovereignty. The breadth of these consequential powers, combined with the minimal oversight mechanisms, represents precisely the kind of constitutional overreach that this House exists to prevent.
I remind Ministers—like many noble Lords, I have painful first-hand experience of this—that the powers may not be indefinitely in the hands of Ministers of any one party. Power changes hands from time to time, and they ought possibly to reflect on the extraordinary legacy of centralised executive power they may find themselves bequeathing to a new Administration that is not of their political persuasion. Governments change, Ministers change and political priorities evolve. Constitutional safeguards must be designed to protect parliamentary sovereignty, regardless of who holds executive office. I urge noble Lords across the Chamber to reflect carefully on whether we are prepared to accept such a substantial erosion of parliamentary authority in the name of administrative convenience. Some principles are surely too important to compromise, and parliamentary sovereignty is surely paramount among them. But, in the meantime, I beg leave to withdraw the amendment.
Lord Sharpe of Epsom
“(3A) The Secretary of State must have regard to the following objectives when making any regulations under this Act—(a) the international competitiveness of the economy of the United Kingdom, and(b) its growth in the medium to long term.”Member’s explanatory statement
This amendment would require the Secretary of State to have regard to the objective of the international competitiveness of the economy and its growth in the medium to long term when making any regulations under the Act.
Lord Sharpe of Epsom (Con)
My Lords, I will speak to my Amendments 325, 326A and 329B, and briefly allude to Amendments 330BA and 330E, tabled by my noble friend Lord Leigh of Hurley.
The Government have stated that this Bill represents the biggest upgrade to workers’ rights in a generation. Given the tremendous importance that the Government have placed on this piece of legislation, one would reasonably have expected them to have conducted a comprehensive and thorough impact assessment. Indeed, the noble Lord, Lord Leong, argued earlier that the Government had done just that. However, the fact remains that Regulatory Policy Committee has awarded the Government’s impact assessment a red rating, which encompasses several critical areas, including the Trade Union Act 2016 repeals, day-one rights provisions, flexible working arrangements, and measures addressing harassment by third parties. Such a rating indicates fundamental deficiencies in the Government’s analysis of this legislation’s potential consequences—a point that has been argued from this side of the Chamber on a number of occasions.
I will illustrate precisely how inadequate this impact assessment is by examining one particularly striking example. It states that:
“There could also be wider impacts on society, including … a reduction in days lost to strike action if Trade Union reforms lead to better industrial relations, which will prevent significant costs on the economy. Rail strikes alone are estimated to have cost the UK economy at least £1.7 billion over the eight-month period to January 2023”.
This statement exemplifies the superficial and speculative nature of the Government’s analysis. Rather than providing concrete evidence and detailed economic modelling, they have resorted to hypothetical scenarios and broad generalisations. They suggest that their reforms might lead to better industrial relations, which could potentially reduce strike action and in turn prevent economic costs. However, this chain of assumptions lacks any of the rigorous analysis which legislation of this magnitude demands.
Furthermore, although the Government cite the economic impact of rail strikes, they fail to provide a comprehensive analysis of how their specific proposals would address the underlying causes of industrial disputes. They offer no detailed examination of the potential unintended consequences of their reforms, nor do they adequately assess the costs that businesses and workers might face during the implementation of these new rights. The mention of implementation affords me an opportunity to again remind the noble Lord, Lord Leong, that we will very soon be delivered an implementation plan.
On Amendment 325, we have heard Ministers trumpet on a number of occasions PwC’s global CEO survey, which ranked the UK as the second most attractive destination for international investment. Unfortunately, that claim collapses under scrutiny. The survey was conducted before the current Chancellor’s first Budget and before the Government began systematically dismantling the pro-growth, pro-enterprise environment that we left in place. Since then, the UK’s position has collapsed to 29th in IMD’s world competitiveness rankings. We are now considered less competitive than Oman, Saudi Arabia and the Czech Republic. We are barely ahead of Kazakhstan and Kuwait. That is not a global powerhouse. What is the Government’s response? Instead of halting the slide, they are doubling down with a raft of measures that will make the UK even less attractive to investors, less hospitable to entrepreneurs and less viable for businesses that are looking to grow.
At the centre of this is the Employment Rights Bill. This legislation threatens to make Britain one of the most rigid and punitive labour markets in the developed world. Let us be clear: the Bill introduces day-one rights for employees to bring legal claims, dramatically increasing the litigation risk for employers from the moment a contract is signed. It expands rights around dismissal, probation and workplace disputes, turning even small staffing decisions into potential courtroom battles. It removes key flexibilities that employers rely on to respond to changing economic circumstances. This may all sound very appealing in the abstract. The Government will say that it is modernising employment rights, but in practice job creation will slow, entrepreneurial risk will drop and, crucially, offshoring will accelerate, because businesses can choose to hire in other jurisdictions —and they will.
We are already seeing warnings from business leaders that the cost of employing in Britain is simply becoming too high, not just financially but legally and procedurally. A recent survey by Saffery and Ward found that employers are planning layoffs and the relocation of operations abroad in direct response to increasing national insurance contributions and regulatory burdens, and now the spectre of hostile employment legislation. EY has warned that high energy costs and slow growth are deterring investment, while major employers are now reviewing UK operations due to the cumulative cost of doing business here.
Lord Vaux of Harrowden (CB)
My Lords, I will speak to Amendment 326A on behalf of the noble Baroness, Lady Penn, who apologises that she is unable to be here.
The amendment is simple: it would require the Secretary of State or the relevant devolved counterpart to have regard to the impact of any regulations made under the Bill on the economic growth and competitiveness of the United Kingdom. It is very similar to Amendment 325, just introduced by the noble Lord, Lord Sharpe of Epsom, which itself mirrors the wording of the secondary objective for financial regulators, which was introduced in the Financial Services and Markets Act 2023. I would support either one; they ultimately have the same goal.
As we heard on many occasions in Committee—we are reaching the end, at long last—this is a skeleton Bill, where an enormous amount of the detail will be added later by regulation. I counted 173 regulation-making powers in the Bill—a quite staggering number. Call me old-fashioned, but I rather think that we should do the work first and then legislate, not the other way around.
We also have an impact assessment that accompanies the Bill that, as we were just told, was described by the Regulatory Policy Committee as not fit for purpose. In many cases the impact assessment makes no effort at all to quantify the costs or benefits, precisely because it is not yet known what will be in the final regulations that follow the Bill. The Government themselves concede in the impact assessment that many of the measures in the Bill will have negative consequences. For example, the Government expect that, overall, the measures in the Bill will impose costs to business of around £5 billion. They also state very clearly that these costs will fall disproportionately on small businesses. The potential negative impact on growth and competitiveness from that is obvious.
Some of the negative aspects could be minimised if the regulations are well designed. To give just one example, I have been concentrating my efforts on the Bill on the introduction of day-one unfair dismissal rights. The impact assessment is very clear on the potential negative impacts from that on businesses and, in particular, on the potential hiring of employees who are seen as higher risk, such as younger people. That is my top concern in that respect.
After describing the potential negative consequences, the impact assessment rightly says:
“The impact of hiring and labour mobility will ultimately depend on the final regulations on what is permissible in the ‘initial statutory period’ of employment”.
I agree; a well-designed probationary period could negate many of the impacts that the Bill could cause, which is something that I hope the Minister will be prepared to discuss before Report. However, at the moment, we have no idea what the final regulations will be and neither, it appears, do the Government. They still have not carried out the relevant consultation.
That is a really good example of the importance of this amendment. The final consequences of the Bill will depend on the detail that is to be added later or amended by regulation. We should not just take that on trust. Although I of course have the greatest faith in the Minister, this Government cannot speak for or bind future Governments.
The Government have consistently stressed the importance of growth and competition, although it is fair to say that their actions have not always followed their rhetoric. To quote the Chancellor in January this year:
“Economic growth is the number one mission of this government … most of all … without economic growth … we cannot improve the lives of ordinary working people”.
Surely that last point is the main point of the Bill: to improve the lives of ordinary working people. It must be essential, and I assume agreed, that where the measures in the Bill could have negative impacts on growth, those negative impacts should be identified and taken into account when adding the details to the Bill by regulation.
In the same speech, the Chancellor went on to say:
“The strategy that I have consistently set out … is to grow the supply-side of our economy … recognising that first and foremost … it is businesses, investors and entrepreneurs who drive economic growth … a government that systematically removes the barriers that they face—one by one and has their back”.
It is hard to disagree with that, so surely we should ensure that the Bill does not do the opposite and create barriers for business.
There is a good precedent for including a growth and competitiveness objective in a Bill such as this. The Financial Services and Markets Act 2023 introduced a secondary objective for financial service regulators to facilitate international competitiveness and growth, something that the current Chancellor has been vocal in her support of and has rightly put pressure on regulators to follow, including through the issuing of new growth-focused remit letters to the regulators.
Having such an objective, or in the case of these amendments just to have regard to, is not new and is entirely consistent with stated government policy. Given the potential negative impacts the Bill may have—by the Government’s own admission—the sheer volume of detailed regulation that must follow and the difference that could be made to the consequences of the Bill if those regulations are well designed or badly designed, we must surely have some clear objectives for those regulations. All that these amendments would do is ensure that growth and competitiveness must be taken into consideration. Surely that is not too much for us to ask.
Baroness Neville-Rolfe (Con)
My Lord, I have added my name to Amendment 326A in the name of the noble Baroness, Lady Penn. I agree with all that has been said by the noble Lord, Lord Vaux of Harrowden, in introducing it, and, indeed, with the convincing analysis by my noble friend Lord Sharpe.
Noble Lords may recall that I come to the scrutiny of the Bill constructively, having worked for Tesco for many years and enjoyed excellent relations with the USDAW union, the noble Lord, Lord Hannett of Everton, and with the trade unions in general, under the noble Lord, Lord Monks, at that time. We always tried to treat people well, and the success of the business was a testimony to that. We complied with the law.
However, the law is now changing, and I am afraid that this Committee has shown that the Bill needs further work. As drafted, it will be a huge check on growth and will undermine the competitiveness of which we have rightly been very proud in the UK. My noble friend Lord Hunt of Wirral mentioned earlier the worrying research by the Institute of Directors that reveals that seven in 10 business leaders surveyed believe that the Employment Rights Bill will have a negative impact on UK economic growth.
I have two particular examples, which I hope the Minister will look at again. First, Ministers—or rather their civil servant agents, and possibly even the trade unions—will be able to take a legal case where an employee is unwilling to pursue a complaint. That is inappropriate and unfair; consent is such an important principle. It also risks putting further pressure on the already struggling tribunal system.
Secondly, and I apologise that this example has already been mentioned, the Bill will radically reduce the effectiveness of the labour market by giving employees the right to claim unfair dismissal from day one of their employment. Other employees will be disadvantaged, as those who are slack, do a poor job or play the system will not be able to be dislodged without a long tribunal case. This will hit good employees who need to cover for their fellows.
The Minister has very helpfully agreed that there should be a probation period during which suitable arrangements can be made in such circumstances, but we have no detail. All of that will go into regulations, which we will not be able to reverse. That is why I feel so strongly about this evening’s amendment on growth and competitiveness. This would apply when regulations were being made by Ministers. There is, unfortunately, a plethora—a cornucopia—of powers in the Bill. It is essential that Ministers, here and in the devolved Administrations, to which our amendment refers, should be required to look at the impact on UK economic growth and competitiveness when they are making regulations. Otherwise, I fear that the growth objective of this Government is for the birds.
Lord Leigh of Hurley (Con)
My Lords, I shall speak to the amendments in my name and in so doing support the other amendments in the group, all of which have been most eloquently described by my noble friends, Lord Sharpe of Epsom and Lady Neville-Rolfe, and the noble Lord, Lord Vaux. My noble friend Lord Sharpe of Epsom is right that the Government’s stated objective of growth, which is a commendable objective, is hampered by some aspects of this Bill. All I am asking for is some time for the real effect and impact of this Bill to be assessed, particularly in respect of small and medium-sized businesses, each and every one of which that I have spoken to to explain what is in this Bill is very unhappy about the consequences that it will have for their business, be it small or medium.
All credit to the Labour Government that, when instructing regulators and creating new regulations, particularly in the financial services market, they have been very clear to the regulators that they must not impede economic growth, and I commend them for that—it is absolutely right. I encourage them to take their own advice and allow this Bill to have an overriding principle that anything and everything in it is intended to promote and help growth. There does not seem to be anything controversial to be afraid of in that respect, and therefore I encourage them to accept the amendments tabled by my noble friends Lord Sharpe and Lady Penn.
My amendments are just asking for time to consider matters. They cover two areas: business and union funding. Very many small and medium-sized businesses will have read the Times comment a few days ago, which I will repeat to your Lordships because it is bang on. It points out that:
“Four in five businesses expect their costs to rise in the wake of the reforms, though ministers have shown little interest in their views. The inevitable result will be a wave of redundancies, hiring freezes, curbs on training and a rise in automation”.
A rise in automation is, of course, a good thing, but it will inevitably lead to greater unemployment. There is no question about it. Every single business I have been talking to has said it is freezing hiring people until they get to understand this Bill better. As the Times points out:
“That is a counterintuitive way to buttress workers’ rights, to say the least”.
and the fact that, as my noble friend Lady Neville-Rolfe explained,
“taxpayers will be called upon to foot the bill, size yet unknown, for the FWA’s operations adds insult to economic injury”.
The Times points out that:
“It is an irony that Labour’s reforms will harm the very individuals they are designed to help. Labour should recognise that in requiring the taxpayer to potentially underwrite the activities of trade unions, they are not only recklessly introducing unnecessary frictions to the labour market, but making inappropriate demands on public money”,
because that is where it will fall. The Times is quite clear when it says:
“Labour ought to think again”.
Baroness Jones of Whitchurch (Lab)
My Lords, I thank the noble Lord, Lord Sharpe, and all noble Lords who have spoken in this debate.
I begin with Amendment 326B in the name of the noble Baroness, Lady Coffey, which was moved by the noble Lord, Lord Sharpe. In accordance with procedure, the other place has passed a money resolution authorising the payment, out of money provided by Parliament, of expenditure incurred as a result of this Bill by any government department. In practice, the authorisation of any additional government expenditure, for example in relation to the fair work agency, will be approved by the elected Chamber in accordance with its Estimates procedure. As noble Lords will know from the previous debate, our impact assessment for establishing the fair work agency set out the current running costs of the enforcement bodies and initial estimates of set-up costs for the fair work agency.
I turn to Amendment 329A, tabled by the noble Lord, Lord Leigh. As your Lordships’ House will be aware, the Government have committed to ongoing, detailed engagement with businesses of all sizes as we develop the details of regulations under this Act. In addition, our published impact assessments evaluate a range of evidence on the impacts on small and medium-sized enterprises. They also outline a plan for monitoring and evaluating the impact of the Bill and subsequent secondary legislation, which will involve reviewing how the reforms have impacted SMEs.
The Government value the insights that SMEs and their representatives can bring in ensuring the particulars of this Bill strike the right balance. To recognise that, Ministers and officials have hosted and continue to host a range of SMEs and their representatives, including and beyond those stipulated by the noble Lord’s amendment, to discuss the Bill. Such engagement and consultation will continue following Royal Assent, and SMEs will always feature in such engagement and consultation without the need for a formal requirement.
Amendment 329B from the noble Lord, Lord Sharpe, and Amendments 330BA and 330E from the noble Lord, Lord Leigh, cover impact assessments. I will not repeat the points made earlier by my noble friend Lord Leong on the steps the Government have and will continue to take to ensure impacts are properly understood and assessed. The Government have noted the Regulatory Policy Committee’s opinion on our impact assessments, but it has always been our intention to refine our analysis as policy development continues, working closely with external experts, businesses and trade unions.
To reassure the noble Lord, Lord Leigh, on political funds, I reiterate the point that the Bill will ensure that political funds operate in a transparent manner that is clear to union members. Sections 32 and 32A of the Trade Union and Labour Relations (Consolidation) Act 1992 will not be amended via this Bill. It will continue to require that unions provide details of their total income and expenditure in their annual returns to the certification officer, which are made publicly available, and that all members of a union receive information on the total income and expenditure of a political fund through the annual statement to members.
Members of a union are also part of a collective of workers, and political funds should be considered in that light. If a union has a political fund, its members have control over how it is spent through the democratic structures of the union. Unions put considerable effort into raising engagement in their democratic processes, which any member is free to participate in, meaning they are able to decide how their political fund is used. If union members want more information on political fund expenditure, or if they disagree with how that expenditure is being directed, they can take steps to change it. Union members are ultimately members of a voluntary organisation and are free to opt out of political fund contributions if they have objections to how a political fund is operated.
The amendments from the noble Lord, Lord Sharpe, and the noble Baroness, Lady Penn, would require the Secretary of State to have regard to the UK’s international competitiveness and UK growth when making any regulations under the Bill. First, it is worth noting that the UK already lags the OECD average on most employment protections, yet the UK economy has not grown at the average rate of other OECD economies in the last 14 years, missing out, as I said earlier, on £171 billion in growth. The Government’s impact assessment notes that the Bill could have a “direct and positive impact” on economic growth and
“will help to raise living standards across the country and create opportunities for all”,
supporting the Government’s mission for growth. We will continue to pay close attention to the potential impacts as we develop regulations to implement the measures in the Bill and produce further impact assessments in line with our Better Regulation requirements.
This Government know the impact of the UK being internationally competitive. Our country has great strengths, but we have lacked the dynamism required to seize new opportunities, and businesses have needed long-term stability. Meanwhile, the global trading environment has become unpredictable, supply chains fragile and other economies more assertive in protecting their security and promoting their strategic strengths. That is why we have a clear goal: driving growth domestically. Making work pay is just one aspect of our mission to boost growth and break down the barriers to opportunity which have been holding our country back.
Our plan for change is already delivering benefits. We had the fastest growth in the G7 at the start of the year. Interest rates have been cut by the Bank of England four times since the election. A record £63 billion of private investment was announced at the investment summit last year, with £40 billion announced by Amazon just today, and 500,000 more people are in work. We have three trade deals with global economic powerhouses, and business confidence is at a nine-month high. This is a Government delivering for working people, and this Bill will help more people stay in work, support workers’ productivity and improve living standards across the country.
To wrap up this lengthy Committee stage, I want to say that it is with great pleasure that I conclude our final group of this Committee. The Government were elected on a manifesto that committed to implementing Labour’s plan to make work pay in full, in order to put more money into working people’s pockets. Our first mission as a Government is to deliver economic growth in every part of the country. However, securing that growth can only be worth doing if working people actually feel the benefits. While workers are subject to unethical fire and rehire practices, exploitative zero-hours contracts or last-minute shift cancellations, that certainly will not be the case. That is why this Bill is at the centre of the Government’s plans. It will protect workers from these practices and provide economic safety for the lowest paid in the labour market.
Just consider a few of the changes it brings. It means that 9 million employees will gain protection from unfair dismissal—not after two years, but from day one. It means that workers in some of the most deprived parts of the country will be spared up to £600 in lost income from the hidden costs of insecure work, and it means that at least 900,000 workers every year will benefit from bereavement leave following the death of a loved one.
In conclusion, my noble friends Lord Katz and Lord Leong and I very much look forward to engaging with noble Lords further on the Bill as it progresses to Report. I thank the Official Opposition, the Liberal Democrat Front Bench and noble Lords across the Committee for their contributions throughout this Committee. I must ask the noble Lord, Lord Sharpe of Epsom, to withdraw Amendment 325.
Lord Leigh of Hurley (Con)
Before the noble Baroness sits down, I thank her for her answer. Clearly, the feedback from the organisations she has met is not in parallel with the feedback I have had from similar organisations. I appreciate that the meetings she has had may have been in confidence. But if not, would it be possible to publish the notes of those meetings and of any future meetings with representative organisations such as those in my amendment, and of meetings with the other organisations that, I am pleased to hear, she has also met?
Baroness Jones of Whitchurch (Lab)
We on these Benches meet with members of the SME sector all the time for various purposes. As well as the formal meetings, we meet them in all sorts of guises—for example, to discuss the industrial strategy and some of the digital growth policies. I do not think it practical to do what the noble Lord has asked, but I can assure him that the more formal consultation meetings happen regularly.
Lord Sharpe of Epsom (Con)
I thank the Minister for her response. It is clear that there is significant disagreement on this subject. Indeed, there is a degree of disagreement on the statistics. We seem to be quoting statistics that contradict each other. I have to say that I think ours are rather more up to date—but I would say that.
I thank the noble Lord, Lord Vaux of Harrowden. I completely agree with everything he said, as I do with everything said by my noble friends Lord Leigh of Hurley and Lady Neville-Rolfe. It is very concerning that, in the other House, the Government tabled further amendments with no meaningful assessment of their economic or practical impact, and no proper consultation with the stakeholders that this will affect. This is not how good legislation is made. It is not the standard Parliament or the country should accept.
The Minister just described the Bill as the biggest upgrade to workers’ rights in a generation. If that is the case, one might reasonably expect a thorough and credible impact assessment, not one that is rated red by the Regulatory Policy Committee. That is not a minor procedural footnote; it is a warning and a signal that the economic, legal and operational consequences of this legislation have not been properly understood.
The Deputy Chairman of Committees (Baroness Morris of Bolton) (Con)
My Lords, there is an error in the page numbering of Amendment 334A, which means that it was marshalled incorrectly. It should have been marshalled as Amendment 330DA, so I will now dispose of Amendment 334A, which was already debated. The noble Lord, Lord Sharpe, will just have to trust me on this one.