Grand Committee

Monday 9th March 2026 Grand Committee

Monday 9 March 2026

Arrangement of Business

Monday 9th March 2026 Grand Committee

Announcement

15:45

[The Deputy Chairman of Committees (Baroness Scott of Needham Market) (LD)]

Good afternoon, my Lords. If there is a Division in the Chamber while we are sitting, this Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.

Industrial Training Levy (Construction Industry Training Board) Order 2026

Monday 9th March 2026 Grand Committee

Considered in Grand Committee

15:45

Moved by

[Baroness Blake of Leeds]

That the Grand Committee do consider the Industrial Training Levy (Construction Industry Training Board) Order 2026.

[Baroness in Waiting/Government Whip (Baroness Blake of Leeds) (Lab)]

My Lords, I thank the Secondary Legislation Scrutiny Committee and the Joint Committee on Statutory Instruments for their scrutiny of this draft order, laid on 2 February 2026.

The statutory purpose of the Construction Industry Training Board, or the CITB, is to secure better training provision across the construction sector. The 2023 independent review of the industry training boards, led by Mark Farmer, reaffirmed their continuing value in addressing persistent and structural workforce challenges. Crucially, the review concluded that a statutory levy remains the most effective model for securing the level of skills investment that the industry requires.

This statutory instrument gives effect to the CITB’s levy proposals for 2026, 2027 and 2028. The levy remains the CITB’s primary funding source and, without this order, the board cannot raise mandatory assessments on in-scope employers. Levy funding enables the CITB to deliver essential support to tackle skills shortages and market failures across England, Scotland and Wales. Although views in the sector can vary, the levy proposals continue to command strong employer support. These proposals are the result of detailed consultation and a robust consensus process. In spring 2025, the CITB consulted all 14 prescribed organisations, or sector federations, alongside a structured survey of non-represented employers. Over 67% of levy-paying employers supported the proposals, representing almost 72% of levy value—well above the thresholds for consensus to be achieved.

Before we consider the levy proposals in further detail, I will return to the findings of the Farmer review. I am pleased to confirm that the Government intend to consult industry on bringing together the CITB and the Engineering Construction Industry Training Board to create a single unified body, supporting the combined skills needs of construction and engineering construction. This reflects a key recommendation of the Farmer review, accepted by the Government subject to further scoping. It builds on existing ITB collaborations such as the Sizewell C charter: a joint commitment by the ITBs, local authorities and Sizewell C to ensure a skilled and inclusive workforce for delivering this vital nuclear power station.

The consultation will launch shortly and the views expressed by industry will inform a decision on how to proceed. No outcome can be prejudged and the earliest that any change could take effect is April 2027. Any future levy arrangements arising from reform would come before Parliament in the usual way. Until then, maintaining the CITB’s ability to operate effectively makes approval of this statutory instrument essential.

To turn to the levy proposals, this SI maintains current levy rates. Despite a 36% increase in employer demand for CITB services since 2021, rates are held steady to support businesses navigating difficult trading conditions. The order also raises exemption and reduction thresholds to protect small and micro-businesses from levy pressures linked to wage inflation. Employers with wage bills up to £149,999 will be exempt, while those with wage bills between £150,000 and £499,999 will receive a 50% reduction. Approximately 69% of eligible employers will therefore continue to pay no levy, with a further 15% paying a reduced rate. All these employers remain eligible for CITB support.

The CITB estimates that the levy will raise around £243 million per year to invest in supporting skills needs. In the most recent year, the CITB supported over 30,000 apprentices and 20,000 vocational qualification achievements and provided nearly £130 million in grants, including £60 million for small and micro firms. It also committed up to £40 million for fast-track training and apprenticeships in areas of high demand for homebuilding skills.

This funding directly underpins broader economic priorities. The construction sector contributes over £211 billion annually and employs more than 2 million people. Yet its fragmented nature, characterised by high self-employment and complex supply chains, makes voluntary, industry-wide investment in skills unlikely to occur. Without a statutory levy, the workforce needed to deliver the UK’s economic ambitions simply would not materialise at the required scale. If this order were not approved, the CITB would be unable to collect levy in 2026, impacting apprenticeships, qualifications, employer support programmes, training standards and the future capability of an industry fundamental to growth, housing delivery and national infrastructure.

The UK requires an estimated additional 240,000 construction workers by 2029, with particular pressures in infrastructure, repair and maintenance, and homebuilding. Agreeing this order is therefore critical to delivering the Government’s commitment to 1.5 million safe and decent homes this Parliament and to supporting major infrastructure and clean energy projects across Great Britain. The proposals have the full support of the devolved Governments in Scotland and Wales, who, like industry, recognise the importance of maintaining the CITB’s ability to raise and invest levy income. For these reasons, I commend the instrument and I beg to move.

[Lord Jones (Lab)]

My Lords, I thank my noble friend for her helpful and informative remarks. Skills and training are crucial for Britain, struggling to keep her place in a very competitive global market, and this board is a great and important player in British skilling. It is a good measure and I think that £243 million are involved somewhere in the helpful notes that the department has offered us.

I have some questions that I think might be answered by officials. Very briefly, what is the current grand total of construction apprenticeships for the latest year available? Are there graduate apprenticeships in this industry, and in what numbers? Is the department satisfied with its health and safety record, given the nature of the industry that we are considering?

I find that this proposal brings memories which I think are relevant to anyone considering the future of this great industry. It was the case that, in the early 1980s, big changes were made in these boards. I recollect that, in the other place, the Secretary of State, James Prior, was helped by a Parliamentary Secretary by the name of Morrison.

Time and again, after 10 pm and with three-line Whips, we had orders to abolish board after board—to the point where, although the Opposition of whom I was a part always voted against abolition in this instance, the Government usually had their way. All that was left of these training boards were the great engineering board and the construction industry board. It seems that the start of the problems that Britain now faces around skills and training relates to the decisions taken by the then Government in voting that always happened after 10 pm and went on until midnight. The Government of the day had a good majority, so they got their way.

When I was in the other place, I found that builders were very much against what was proposed in having these issues put on them. I found that, in an era of mass unemployment in the early 1980s, it was very obvious that the apprenticeship boards were being closed down. Even the great companies of Courtaulds, BAE and British Steel pretty well decided not to have apprenticeships. The bottom line was: what was to be made if there were to be any chances of what I would call advantages from the great loss to Great Britain and to our young people? If we look back to those years—the late 1970s and, in particular, the early 1980s—there were great problems.

I hope that the questions I have asked will be answered before the end of the debate.

[Baroness Bennett of Manor Castle (GP)]

My Lords, it is a pleasure to follow the noble Lord, Lord Jones; his long and extensive memories of the issues here really highlighted the depth and length of the problem that is the background to this statutory instrument.

I thank the Minister for her introduction, which was very clear. I also commend the impact assessment—my plaudits go to the people who prepared it—because it is far better than those that we see for many of these SIs. It sets out a picture of an industry, the construction industry, which is in deep trouble when we need it to be tackling the incredibly poor quality of housing stock in particular and building stock more generally, for which the building in which we are standing might be taken as a symbol. We have here an SI whose proposals, to quote the impact assessment, “include little change” for 2026 compared with 2025. The problems are much broader; an industry training levy can tackle only so much.

I have some questions for the Minister; I will understand if she wants to write to me rather than respond from the Dispatch Box. Paragraph 13 of the impact assessment highlights the heavy reliance on subcontracting and self-employment. This is associated with very poor levels of mental health in the construction sector. The figures on suicide and attempted suicide among employees in the sector, who are often on very low wages and in very insecure employment, are deeply concerning.

That is a huge human problem, but it is also a huge problem for the workforce. As the impact assessment says:

“The industry is very cyclical, with drops in output and employment when there is an economic downturn”.


I recall being at a National Insulation Association conference, in 2011, I believe, when it basically said that the industry was closing down because government funding for it had stopped, and that all its most skilled people were going off to do something else and probably would not come back when there was an uplift.

16:00

Are the Government taking any steps and measures to look at the long-term structural problem, whereby a handful of giant contractors employ subcontractors, who also employ subcontractors, and so on, in this fragmented, broken-down, unstable and insecure system? Are the Government taking any steps to consider how we might create a more stable and healthy working environment that would help us secure the skills that we need?

It is also worth looking at paragraph 87 of the impact assessment on the long-term issue of the lack of women workers and workers from minoritised communities in the construction sector. As the Minister said in her introduction, we will need 240,000 extra workers by 2029, so we need to draw on a much broader pool of people than we have been doing up to now. What are the Government looking to do about that? If there are to be significant steps in the next 12 months, is it enough for there to be only a modest change to the levy? Allowing for inflation, it is, in effect, a continuation of last year’s levy. Should we not be doing more about this?

Finally, the impact assessment focuses very much on new homes and buildings. The refurbishment of our incredibly poor housing stock is a huge challenge. In some ways, that is an even more fragmented part of the industry, but it also has the potential to be a steady, continuing source of employment, given that the demand is enormous. I talked about this once at a public meeting, and someone said to me, “What are you going to do with these workers when they run out of houses to insulate and repair?” I said, “That’s a problem for a couple of generations’ time. It won’t be a problem any time soon”. What are we doing to make sure that we are equipping our workforce? In many ways, refurbishing old homes—Victorian homes or older—is a particularly complex task that really needs skills. What are we doing to inject those skills into our workforce?

[Lord Hunt of Wirral (Con)]

My Lords, I join the noble Lord, Lord Jones, and the noble Baroness, Lady Bennett of Manor Castle, in thanking the Minister for introducing this order and setting out its purpose so clearly. I confirm at the outset that the Opposition support it.

As the Minister outlined, the order enables the Construction Industry Training Board to continue raising the levy for a further year in order to support training across the construction sector. As the noble Lord, Lord Jones, reminded us, the levy system has a long history, originating in the Industrial Training Acts of 1964 and 1982. The system exists to address a well-recognised challenge within the sector—namely, without co-ordinated action, investment in training and skills can fall far short of what is required. This is particularly important at a time when the construction industry faces significant workforce pressures. The sector employs around 2.6 million people, yet, as the Minister explained, thousands of additional workers will be required each year to meet future demand.

The noble Baroness, Lady Bennett of Manor Castle, identified one or two key questions. I join her in expressing concern about the mental health aspect that she outlined; it raises deep concern and needs to be addressed. In addition, if we are to have a strong and sustainable skills pipeline, the noble Baroness was right to draw attention to paragraph 87 of the draft impact assessment and the need for a pipeline that will be diverse and wide-ranging to ensure that we deliver wider economic and infrastructure priorities. The work supported by the levy clearly plays an important role in that effort. Grants for apprenticeships, qualifications and short course training, as well as initiatives such as the travel to train grant and the new entrant support scheme, provide valuable support to employers and learners right across the industry. It is also encouraging to see that a large proportion of the support reaches the vital small and micro-businesses that form such a significant part of the construction sector.

While we support the continuation of the levy, I would be grateful if the Minister could clarify a few points, as well as answering the specific questions that the noble Lord, Lord Jones, and the noble Baroness, Lady Bennett of Manor Castle, have asked. First, given the scale of the projected workforce shortfall in construction, how confident are the Government that the current level of the levy will be sufficient to meet the sector’s future skills needs? Are there ongoing discussions with the Construction Industry Training Board about how the levy and its associated programmes might evolve to respond to these pressures?

Secondly, one of the long-standing challenges in construction is the industry’s aging workforce and the difficulty of attracting new entrants. Can the Minister say a little more about how the Government see the levy supporting efforts to bring more young people into construction careers? The noble Lord, Lord Jones, reminded me that he and I used to face each other across the Dispatch Box in the House of Commons, when I was the Minister and he was the shadow—a reverse of what had happened a little earlier when he was the Minister and I was the shadow. We have a combined wish to see an increase in apprenticeships. The noble Lord, Lord Jordan, came up with the concept of a new form of apprenticeship and I was happy to play a part, with my noble friend Lord Clarke of Nottingham, in launching the modern apprenticeships. It would be helpful to know from the Minister exactly what is happening with the need to increase those modern apprenticeships and their availability.

Finally, given the high proportion of small and micro-businesses in the sector, will the Minister tell us what steps are being taken to ensure that these firms are able to access the support available through the levy as easily as possible?

With those brief questions, I reiterate that we support the order and the continuation of the levy. Ensuring that the construction sector has access to the skilled workforce it needs will be essential in the years ahead. The mechanisms such as this levy have an important part to play in that effort, so I am happy to support the Motion.

[Baroness Blake of Leeds (Lab)]

I start by saying how grateful I am for the contributions to this debate and for the thoughtful scrutiny. I have learned a lot from my noble friend Lord Jones about the background and I thank him for his input on that. It is important that we all understand where we have come from and where we are hoping to get to in this important debate. All the contributions have highlighted the scale of the challenge facing us. As the noble Lord, Lord Hunt, outlined, this is one of our most economically vital sectors, responsible for £200 billion of output and the employment of over 2 million people. The future of our economy and our ability to grow depends on this.

As shown in the tenor of the contributions today, we need to make sure that over the coming decade we have a stable and collective system of investing in training, as well as looking at new initiatives. What we can all absolutely say is that market forces alone will not deliver the pipeline of skilled workers that the industry urgently needs, whether in meeting the demand for new homes or, as the noble Baroness, Lady Bennett, quite rightly said, for the complex issue of retrofitting, which sounds straightforward but we know is not—it is exceptionally challenging. Against the bedrock of the need for economic growth, the transition to net zero is a fundamental driver in our ability and our attempts to make the progress that we need to.

There is a focused skills strategy now. It recognises that the construction industry is at its centre and, as has been raised by all, it must benefit and bring support for all sizes of business. It is that unique make-up of the sector that provides opportunities but also presents enormous challenges. We have to make sure that where we offer training it is of the highest quality. It is not just about young people; it is about retraining and upskilling the existing workforce to make sure that they can progress in their careers.

Specifically, I say to my noble friend, there were 24,470 apprenticeships in construction for the year 2024-25, representing 7% of all starts. I am afraid that we do not have the number of graduate apprenticeships, so I cannot answer that specific question.

I will move on to the wider package of support. From a personal perspective, having worked in this space in my previous role, I know that the initiatives aimed at supporting the mayoral authorities are fundamental, making sure that the approach can be delivered locally as well as being supported from the centre, and having a real understanding of the local jobs market, environment and training needs and the relationships that need to be built to do that.

The Government are delivering major investment to strengthen construction skills and the wider skills system. The £625 million construction skills package includes £100 million to expand the construction skills boot camps, £98 million for industry placements and around £100 million to establish 10 technical excellence colleges, boosting opportunities for young people through a £90 million uplift for construction courses for 16 to 19 year-olds and £75 million for adult retraining. This recognises the immediate needs and the fact that we need to bring new young people in and make the whole area attractive to young people. We have been through a phase where it has not been so attractive, but the opportunities are enormous.

16:15

Construction is one of the key sectors benefiting from the new foundation apprenticeship programme, with employers receiving up to £2,000 for every foundation apprentice they take on and retain in the construction industry, which recognises the challenges for smaller enterprises in particular, as has been raised. More widely, we are investing £140 million to pilot new approaches through the mayoral authorities, as I have said, but particularly targeting those who are currently NEET, adding across a range of priority sectors on top of the additional construction skills package investment. We are also investing £820 million through the youth guarantee, reaching almost 900,000 young people, expanding youth hubs, creating 300,000 opportunities for training and work experience with 55,000 guaranteed jobs.

I hope that noble Lords will recognise that an enormous amount of work is taking place and that the support needs are immense for some of these young people both to encourage them to come in in the first place but also to retain them and take them through the training packages. Of course, mental health issues have to be taken exceptionally seriously. A relative of mine works very intensively in health and safety—that is her specialism—and it was chilling to hear that a death factor is included in contracts in some parts of the world. That is the scale of failure in too many parts of the world. We face very serious issues, which reflects the fragmented nature of the issue, as the noble Baroness, Lady Bennett, picked up on. I hope noble Lords recognise that we are taking a holistic view to support those.

In 2026, the CITB will continue to use levy funding to equip businesses to embed fairness, inclusion and respect training into recruitment and retention activities, investing £4 million into continuing its on-site experience hubs, local one-stop recruitment solutions with KPIs to increase numbers of underrepresented individuals accessing information and support. That is recruitment from different communities but it is also attracting young women into the business.

I thank everyone again for contributing to this important debate. I hope that noble Lords are fully reassured of the understanding of the impact on small businesses, about the consistency of levy rates and the future of skills governance across the sector; I believe this order gives reassurance on all those points. Retaining long-standing levy rates increases thresholds to continue protecting the smallest firms and stability, as we have discussed, while government undertakes the forthcoming consultation around the future of the industry training boards. Regardless of those future decisions, the industry cannot afford a gap in funding. Approving this order provides continuity, stability and confidence for construction employees across England, Scotland and Wales. For those reasons, I commend this levy order to the Committee.

Motion agreed.

Procurement (Amendment) Regulations 2026

Monday 9th March 2026 Grand Committee

Considered in Grand Committee

16:19

Moved by

[Baroness Anderson of Stoke-on-Trent]

That the Grand Committee do consider the Procurement (Amendment) Regulations 2026.

[The Parliamentary Secretary, Cabinet Office (Baroness Anderson of Stoke-on-Trent) (Lab)]

My Lords, these regulations make targeted amendments to the Procurement Regulations 2024 so that key parts of the Procurement Act 2023 operate effectively in practice. They strengthen transparency in a proportionate and deliverable way, and they make a small number of practical improvements to support the smooth operation of the new regime.

Public procurement is how the state translates policy into delivery. It is also where public trust can be won or lost. Transparency is, therefore, not optional. It is a necessary discipline that helps ensure value for money, strengthens accountability, and supports confidence among suppliers and the wider public. After all, this is about public money—taxpayers’ money.

The principal purpose of this instrument is to implement Section 70 of the Act. This requires quarterly publication of information about individual payments over £30,000 made under public contracts. These regulations specify the information that must be published and how it is to be published on the central digital platform so that the payment can be linked to the relevant contract and supplier record. This is designed to allow Parliament, the public, suppliers and contracting authorities to “follow the money” in a meaningful way, seeing what was bought, from whom and what was paid under the contract.

The instrument also closes an important gap by ensuring that suppliers awarded notifiable below-threshold contracts are registered on the central digital platform and have a unique supplier identifier. This is light-touch in practice but important in its effect. It improves traceability across the market, strengthens confidence that procurement data reflects real supplier identity, and supports better understanding of SME and voluntary sector participation.

The instrument also completes the move away from Contracts Finder, a legacy publication route whose functions are being consolidated into the central digital platform. This reduces duplication and confusion for suppliers and authorities, and supports a single, coherent source of procurement information—an important part of making transparency meaningful.

Taken together, these regulations are practical and focused. They implement contract-linked payment transparency, as Parliament intended; close a key data gap on supplier identity for below-threshold awards; and simplify publication by consolidating on to a single platform. For these reasons, I hope that your Lordships will support these regulations, and I beg to move.

[Baroness Finn (Con)]

My Lords, it is the “Baroness Anderson and Baroness Finn show” again, I am afraid.

We welcome these regulations. Section 70 of the Procurement Act 2023, introduced by the previous Conservative Government, created new reporting requirements for procurement payments over £30,000. The purposes were clear: to improve transparency; to strengthen accountability; and to make it easier for the public to see how taxpayers’ money is being spent. These regulations implement those commitments by specifying the information that must be published and ensuring that it is made available on a central digital platform. That is a sensible and important step.

Transparency is not an administrative afterthought. It is a safeguard. Publishing clear data on payments—including the contracting authority, the supplier, the value of the payment and the date—enables scrutiny, improves financial discipline and supports better value for money. We particularly welcome the move to align reporting requirements across central and local government. A consistent approach reduces confusion and ensures that transparency does not depend on postcode.

However, I would welcome brief clarification from the Minister on two points. First, on implementation, can the Minister confirm that the central digital platform is fully operational, and that contracting authorities have received clear guidance on data standards and reporting formats? Transparency is meaningful only if the data is accessible and consistent. Secondly, on proportionality, although these requirements are reasonable, what assessment has been made of the administrative burden on smaller contracting authorities? It is important that transparency does not inadvertently divert resource from front-line delivery.

Subject to those two questions, we support these regulations. They deliver on clear commitments to open procurement, to better scrutiny and to ensuring that public money is spent in a way that can be properly examined.

[Baroness Anderson of Stoke-on-Trent (Lab)]

My Lords, the problem when there are only two of us, as we are getting used to, is that I do not necessarily have time to answer all the questions, but I will give it a go. As ever, I thank my opposite number, the noble Baroness, Lady Finn, for the points that she has raised. Unless something is about to appear in front of me like magic, I may have to clarify for her in writing, but I promise to do that swiftly. I believe that, yes, the platform is ready, willing and able—with slight modifications due to be put in place, it should be fully up to speed by the end of the year. As for the administrative burden on smaller authorities, we have made sure that everything that can be done to support them is being done. I will write to the noble Baroness with details of that.

These regulations are about making transparency under the 2023 Act operable and meaningful. The core point is that payment transparency works best when payments are linked to the contract and supply a record on the central platform, enabling scrutiny that is joined up rather than fragmented. The additional provisions are tightly connected. They close data gaps that would otherwise weaken transparency and they ensure that the system works in practice during outages and in urgent protect-life situations. The overall model remains proportionate and deliverable. It is quarterly, prospective from 1 April 2026, and early central government experience suggests that initial reporting volumes are manageable. On that basis, I thank the noble Baroness, Lady Finn, and commend the regulations.

Motion agreed.

Procurement Act 2023 (Specified International Agreements and Saving Provision) (Amendment) Regulations 2026

Monday 9th March 2026 Grand Committee

Considered in Grand Committee

16:26

Moved by

[Baroness Anderson of Stoke-on-Trent]

That the Grand Committee do consider the Procurement Act 2023 (Specified International Agreements and Saving Provision) (Amendment) Regulations 2026.

Relevant document: 50th Report from the Secondary Legislation Scrutiny Committee

[The Parliamentary Secretary, Cabinet Office (Baroness Anderson of Stoke-on-Trent) (Lab)]

My Lords, I am going to speak slightly slowly so that my officials have time to swap out, because they are two different teams. The purpose of this statutory instrument is to implement the procurement chapter of the UK-India comprehensive economic and trade agreement, CETA, via an amendment to the Procurement Act 2023. The UK-India CETA was signed on 24 July 2025 and is one of the most significant bilateral trade agreements that the UK has completed since leaving the European Union.

India is one of the economic heavyweights of the 21st century. It has the highest growth rate in the G20 and is likely to become the third-largest economy in the world by 2029, but India’s markets are also behind some of the highest barriers in the world. The deal that we have secured goes well beyond India’s offering to other countries, opening the door for UK businesses on an unprecedented basis, especially in respect of government procurement. Some noble Lords present may have attended the Lords debate on the UK-India trade agreement last week, when a variety of policy issues pertaining to the agreement were discussed. Today’s debate is focused solely on the procurement chapter of the agreement.

India spends an estimated 20% of its GDP, or £500 billion, on public procurement. Given that India’s nominal GDP was estimated to be £2.74 trillion in 2022 and is projected to reach £7.06 trillion by 2035, this is a phenomenal opportunity for UK suppliers. The procurement chapter unlocks unprecedented access to India’s federal procurement market, covering £38 billion-worth of contracts a year in such sectors as advanced manufacturing, healthcare, construction and infrastructure, and clean energy. For the first time, UK companies will be able to access India’s procurement portal. British businesses will have access to India’s covered entities in respect of procurements above £478,000 for goods and services and £5.3 million for construction services.

We have gained exclusive treatment under the “Make in India” policy. UK bidders will be treated as class 2 suppliers under “Make in India” if at least 20% of their product or service is from the UK or India, giving UK suppliers unprecedented access to India’s federal procurement market not available to other foreign suppliers. We have also reached commitments on fairness, openness and transparency, including the use and accessibility of e-procurement systems, requirements for the publishing of notices and awarding of contracts and domestic review procedures for businesses to bring a challenge if the chapter’s rules have not been followed correctly. The agreement that this Government have secured was a momentous achievement. Others have been trying to get a deal like this for years and failed, but this Prime Minister, along with the then Business Secretary and Trade Minister, delivered.

We are clearly leading the way, as the EU and India have now reached political agreement on their own trade agreement, where it seems that the UK deal was used as a baseline. However, we retain first-mover advantage, including unique access to India’s £38 billion federal procurement market, which the EU has not obtained. As part of the Constitutional Reform and Governance Act 2010 process to enable parliamentary scrutiny of treaties, the CETA was laid in Parliament on 21 January 2026 and cleared the CRaG scrutiny process on 5 March. This SI was laid on 19 January 2026 to bring the CETA into force as quickly as possible, while allowing for the necessary parliamentary scrutiny, to allow businesses to take advantage of the agreement and deliver growth across the country.

16:30

The procurement chapter of this agreement can take effect only once the agreement has been implemented in domestic legislation. The statutory instrument will achieve that by updating Schedule 9 to the Procurement Act 2023 to implement in domestic law the UK’s procurement obligations in this agreement. By adding this agreement to Schedule 9, suppliers entitled to benefit from it will be considered “treaty state suppliers” under Section 89 of the Act. This will provide them with equal access and rights in UK public procurement as is afforded to UK suppliers. In turn, the agreement requires India to provide comparable access to UK suppliers.

The Procurement Act 2023 (Commencement No. 3 and Transitional and Saving Provisions) Regulations 2024 are also being amended to ensure the UK’s obligations under the agreement apply in relation to contracts that can still be entered into under the previous procurement regime. The territorial extent of this instrument is the UK. The territorial application of this instrument in relation to contracts under the Procurement Act 2023 extends to England and Northern Ireland.

It also extends to Scotland and Wales but not in respect of procurement carried out by a devolved Scottish authority or regulated by Welsh Ministers. The Welsh Government are therefore making a separate statutory instrument to implement this agreement in respect of procurements regulated by Welsh Ministers. This SI was laid in the Senedd on 10 February, is scheduled for debate in plenary on 10 March and is due to enter into force on 31 March—the day after this SI comes into force.

The Scottish Government are implementing this agreement separately under their own legislation in respect of procurement carried out by a devolved Scottish authority. The Scottish statutory instrument—SSI—was laid before the Scottish Parliament on 7 January and considered by the Economy and Fair Work Committee on 4 February. The Scottish Parliament approved the SSI on 18 February and, following that, it was signed and made on 19 February. It will enter into force on 24 March. Finally, the territorial application of this instrument in relation to contracts under the previous procurement regime extends to England and Wales and Northern Ireland.

For these reasons, I hope that noble Lords will support these important regulations. I beg to move.

[Baroness Finn (Con)]

My Lords, I thank the Minister for introducing these regulations and for clearly setting out their purpose. As she explained, these regulations amend the Procurement Act 2023 to add the UK-India comprehensive economic and trade agreement to the list of specified international agreements in the Act. In doing so, they give effect in domestic law to the procurement provisions contained in that agreement. Under the World Trade Organization’s agreement on government procurement, the United Kingdom is required to ensure that countries with which we have concluded relevant trade agreements are given non-discriminatory access to public procurement markets. These regulations are therefore a technical but necessary step to ensure that the United Kingdom meets those obligations.

While we support the regulations, it is worth briefly reflecting on the wider context in which they sit. The UK-India agreement was long anticipated and presents significant potential opportunities for trade between our two countries. However, we have concerns about some of the provisions in the agreement and about what was not included.

The inclusion of services in any agreement with India was widely regarded as a central objective of the United Kingdom’s negotiating position. It is therefore disappointing that a number of key services sectors, including the legal sector, appear not to have secured the level of market access that had been hoped for. Given the strength of the UK services economy, that omission represents a missed opportunity. Similar concerns were raised during the debate in the other place, where it was noted that securing stronger outcomes for services had been a central priority during earlier negotiations.

Concerns have also been raised regarding the operation of the double contributions convention within the agreement, which may mean that companies employing Indian workers in the United Kingdom are not required to pay employer national insurance contributions on their salaries. Although labour mobility provisions are a common feature of modern trade agreements, it would be helpful if the Minister could clarify how the Government intend to ensure that these arrangements operate fairly and do not inadvertently disadvantage British workers.

I would also welcome the Minister’s comments on the point raised by the Secondary Legislation Scrutiny Committee on the timing of this instrument. As the committee observed, the regulations were laid shortly before the treaty itself was formally laid before Parliament, meaning that the scrutiny periods for the treaty and its implementing legislation run in parallel. Can the Minister explain the Government’s reasoning for adopting that approach and reassure the Grand Committee that Parliament will have had sufficient opportunities to scrutinise both the agreement and the legislation required to implement it?

Finally, Ministers have suggested that the procurement provisions of this agreement will open up significant opportunities for UK businesses by providing access to India’s federal procurement market. That is clearly welcome, but it would be helpful to hear how the Government intend to support UK firms, in particular small and medium-sized enterprises, in navigating and accessing those opportunities in practice.

With those brief remarks, I reiterate that these regulations are a necessary step to give effect to the procurement provisions of the agreement. Nevertheless, we will continue to take a close interest in how the wider deal operates in practice and whether it ultimately delivers the benefits that British businesses and workers were promised.

[Baroness Anderson of Stoke-on-Trent (Lab)]

My Lords, this has been part 2 of the “Finn and Anderson show” today. I thank the noble Baroness, Lady Finn, for the points she raised. I was a little disappointed that she did not manage to get in a reference to those celebrating this deal—not least the people of Scotland, who are delighted about access to the Indian whisky market; it has been life-changing for that sector.

I will respond to some of the specific questions the noble Baroness asked me. I will reflect on Hansard after the debate, and I am sure she will pick me up on anything I miss.

On the double contributions convention, the UK Government already have similar agreements in place covering Chile, Japan, South Korea, the 27 EU member states, Iceland, Liechtenstein, Norway, Switzerland, Barbados, Canada, Israel, Jamaica, Mauritius, the Philippines, Bosnia-Herzegovina, North Macedonia, Serbia, Montenegro, Kosovo, Turkey and the USA. We know how to do these agreements and we are effective at them. The noble Baroness will be aware that the previous Government also operated within this space. There is little to be concerned about.

The noble Baroness is absolutely right that our focus should be on how we support businesses so that they can access the benefits of this procurement chapter. It is vital that we ensure that British businesses can utilise the benefits of this chapter if we are to reap the economic rewards of this unprecedented access to India’s market. The Department for Business and Trade has a significant presence in India, with one of the biggest in-country overseas teams in the world, behind only the US and China. This consists of sectoral experts who work directly with UK companies to help them enter, grow and expand into the Indian market. Alongside this, the team has staff focusing on trade policy, market access, investment promotion, and marketing and communications, under the leadership of HM trade commissioner for South Asia. The DBT works in partnership with Foreign Office teams in India, who also have objectives to support UK economic growth.

On the timing of the instrument, as part of the Constitutional Reform and Governance Act process to enable parliamentary scrutiny of treaties, the Government are required to lay a relevant treaty, alongside an Explanatory Memorandum, for 21 sitting days before it can be ratified—unless either House adopts a Motion that such a treaty should not be ratified—subject to any additional procedural steps required by the treaty also being concluded. Although it is not a legal requirement for treaties to have completed the process set out in the CRaG Act prior to implementation in domestic law, it has been an informal convention to lay before Parliament the implementing legislation after the treaty in question has undergone the initial 21 days.

Exceptionally, in this case, the CETA was laid in Parliament on 21 January 2026 and formally entered the CRaG process shortly after the draft instrument was laid before Parliament on 19 January 2026, in accordance with the affirmative procedure. The CRaG process concluded on 5 March. This approach has been necessary due to the Government’s desire to bring the CETA into force as quickly as possible, while allowing necessary parliamentary scrutiny, to allow businesses to take advantage of the agreement and to deliver growth across the country.

I hope I have answered all the noble Baroness’s questions. To conclude, this historic agreement marks a major milestone in the UK-India relationship and is one of the most significant bilateral trade agreements that the UK has concluded since leaving the EU. Implementation of the CETA is a key step in opening up new markets and opportunities for British businesses and exports, delivering economic growth across the country. This is especially true in respect of the procurement chapter that we have been discussing, which unlocks unprecedented access to India’s federal procurement market.

Motion agreed.

Human Medicines (Amendment) Regulations 2026

Monday 9th March 2026 Grand Committee

Considered in Grand Committee

16:41

Moved by

[Baroness Merron]

That the Grand Committee do consider the Human Medicines (Amendment) Regulations 2026.

Relevant document: 51st Report from the Secondary Legislation Scrutiny Committee

[The Parliamentary Under-Secretary of State, Department of Health and Social Care (Baroness Merron) (Lab)]

My Lords, I am glad to introduce these regulations, which will take effect from 31 March 2026. This statutory instrument is technical, relating to the preparation and administration of vaccines.

In autumn 2020, in response to the Covid-19 pandemic, multiple temporary amendments were made to the Human Medicines Regulations 2012 to support the rollout of the Covid-19 and influenza vaccination programmes. Three of these amendments were extended in 2022 and 2024 following public consultation, and are due to lapse on 1 April 2026.

These regulations look to retain several provisions within those amendments—which have been utilised in the Covid-19 and influenza programmes for five years—as permanent legislation and expand them to other vaccines. They are designed to build on the benefits that the amendments have provided to date, as well as on the wider lessons learned during the pandemic and in recent polio and MMR vaccine catch-up programmes. I will briefly set out what each of these regulations does, and what amendments this instrument will make to them.

Regulation 3A(1) and (2) of the 2012 regulations enable trained healthcare professionals, or staff under the supervision of trained healthcare professionals, to conduct the final stage of assembly and preparation of Covid-19 vaccines without additional marketing authorisations or a manufacturer’s licence being required. This enabled bulk assembly of Covid-19 vaccines during the pandemic. Given that we are no longer in a pandemic and have taken a more targeted approach to recent Covid-19 vaccination campaigns, this instrument allows these provisions to lapse from 1 April 2026.

Regulation 3A(3) and (4) permit holders of a wholesale dealer’s licence who do not hold a manufacturer’s licence to relabel Covid-19 vaccines to reflect changes in shelf life resulting from product thawing. This instrument retains these provisions as permanent legislation and expands them to include any vaccine against an infectious disease, which will helpfully support flexibilities in the supply chain now and in the future.

Regulation 19 allows Covid-19 and influenza vaccines to be moved between different NHS service providers at the end of the supply chain, without the need for a wholesale dealer’s licence. This instrument retains these provisions as permanent legislation and expands them to include any vaccine against an infectious disease, with relevant safeguards in place to regulate its use.

16:45

Regulation 247A enables the use of an extended workforce that is legally and safely able to administer Covid-19 or influenza vaccines without the input of a prescriber, using an approved protocol. This instrument allows Regulation 247A to lapse from April 2026 and introduces a new permanent provision, new Regulation 235A. This will enable the use of an extended workforce to administer any vaccine against an infectious disease as directed by a national body under a vaccine group direction.

Regulation 233 enables persons conducting a retail pharmacy business to deliver Covid-19 and influenza vaccination services off the registered premises. This instrument expands this provision to include any vaccine against an infectious disease.

Schedule 17 to the 2012 regulations introduced a category of “occupational health vaccinators” who are permitted to administer Covid-19 and influenza vaccines as part of an NHS or local authority occupational health scheme. This instrument amends the list of professionals who are able to deliver occupational health scheme vaccinations to align with the professionals who are able to supply medicines under a patient group direction, including private providers. It also expands the scope of Schedule 17 to cover any vaccination or immunisation offered as part of an occupational health scheme.

In developing the instrument that is before the Committee, the Government ran a public consultation from 5 September to 28 November 2025 on the proposals to amend the regulations. This consultation was hosted by my department in relation to England, Wales and Scotland, acting jointly with the Department of Health in Northern Ireland. We had 218 responses from organisations and individuals, who shared professional or personal views.

Overall, the majority of responses were supportive. There were many positive comments on how the regulations have already helped increase access and efficiency across the system while effectively utilising the workforce to deliver Covid-19 and influenza vaccinations safely. Further details and analysis of the consultation responses can be found in the published government response.

Noble Lords will be aware that these regulations were debated and approved by the Second Delegated Legislation Committee. During that debate, a few questions were asked about the clinical oversight of vaccine group directions, which I will address in order to assist noble Lords.

In England, the UK Health Security Agency will author the vaccine group directions, which will be drafted by clinical and public health experts, and will outline the conditions for which the VGD can be used. Once the VGD has been authored, the organisation commissioning the vaccination service must authorise its use and ensure that only fully trained professionals use it. When administering vaccines under the VGD, the assessment and consent must be undertaken by a specified registered healthcare professional, who must also supervise any further delegated tasks.

Given the broad level of support expressed in the consultation, the Government wish to proceed with the proposed amendments. They will help facilitate the shift from sickness to prevention, as described in the 10-year health plan for England, and will support the delivery of commitments in vaccination frameworks in Scotland and Wales. An instrument is being laid in parallel in the Northern Ireland Assembly to deliver UK-wide changes.

To conclude, this instrument makes amendments to support permanently the safe supply, distribution and administration of a wider range of vaccines. Most importantly, it will ensure that we have a vaccination system that is fit for the future. I beg to move.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I thank the Minister for her clear and comprehensive introduction to this statutory instrument, and I express Green Party support for it. I echo the comments of the Minister in the House of Commons, who said that,

“after clean water, vaccination is the most effective public health intervention for saving lives and promoting good health”.—[Official Report, Commons, Second Delegated Legislation Committee, 3/3/26; col. 8.]

We need to say that and keep saying it, particularly in the current era. I am glad that, through this SI, the Government are making sure that we prepare ourselves for the next pandemic, because we know there will be one. I shall speak briefly about the vaccination situation and some of the changes relating to vaccination that occurred in our health system during the Covid pandemic. I have a question for the Minister; if she cannot answer it now, I will entirely understand and appreciate a reply in writing.

In her introduction, the Minister said that we are no longer in a Covid pandemic, but we are still seeing the extensive spread of the Covid disease. I declare an interest as someone who has the financial wherewithal and ability to have had—and will continue to have—regular vaccinations against Covid, although I am not in one of the Government’s target groups. I want to address this because we saw the development of a great deal more private medicine during the pandemic. Private clinics were set up, running Covid tests and offering vaccinations. We have seen a profound change in the ecology of the vaccination system.

In the context of this SI, I have looked at NHS travel vaccines. Typically, the NHS offers vaccination against hepatitis A, typhoid fever, diphtheria, tetanus and polio, if not previously received, and cholera. These are available for certain destinations, but a number of travel vaccines are not covered by the NHS, including for yellow fever, hepatitis B, Japanese encephalitis, rabies and meningitis ACWY. Many noble Lords will have seen the recent tragic case of travel-acquired rabies—the most hideous disease—acquired from the lick of a puppy on a beach, I believe.

My question is about vaccination as we move increasingly into an ecology where some people are able to afford to protect themselves against a wide range of risks, for travelling but also even if they are not travelling. I randomly selected a provider and saw that there is a huge range in prices. Vaccination against dengue fever and Japanese encephalitis costs £125 for each, and for typhoid it costs £40. I wonder whether the Government are taking into consideration the availability of these crucial health measures. Some people are able to afford a broad range of protection but some may not be able to afford or have access to protections that could keep them healthy and, eventually, save the NHS a great deal of money.

Through this SI, we are making sure that we are able to react quickly in crisis situations, but it would be interesting and important to hear from the Minister about whether we are looking at the broader ecology of all this. What are we are doing for public health in the new, increasingly privatised medical arrangements that we are seeing?

[The Earl of Effingham (Con)]

My Lords, I thank the Minister for introducing these regulations. Vaccination remains one of the most effective public health interventions available to us all. The flexibilities introduced during the pandemic enabled the rapid deployment of both Covid-19 and influenza vaccines at scale. It is understandable that the Government now seek to make certain arrangements permanent and extend them to other infectious diseases.

His Majesty’s loyal Opposition support a vaccination system that is resilient, agile and capable of responding to future public health requirements. Expanding the role of community pharmacies and broadening the vaccinator workforce may well assist in that aim, provided that safeguards are robust. However, it would be wrong to wave this past without scrutiny, as temporary powers become permanent.

The introduction of a permanent vaccine group direction mechanism is a significant change. Flexibility must be matched by clarity. If a patient experiences a serious adverse reaction following vaccination under a vaccine group direction, where does the ultimate legal and clinical responsibility lie? Is it with the authorising body, the supervising clinician, the employer or the individual vaccinator? It would be helpful to have that clearly set out by the Government.

On workforce scope, the regulations expand the occupational health vaccinator provisions and align them with professions able to operate under a patient group direction. Can the Minister clarify the criteria used to determine inclusion? Were decisions based on professional registration, competence in administrating injectable medicines, workforce capacity or other considerations? I am sure all noble Lords agree that consistency and safety are paramount.

On public confidence and uptake, greater flexibility does not automatically mean higher vaccination rates, so how will the Government ensure that these changes actually translate into improved uptake among eligible and vulnerable groups? What benchmark will the Government use to evaluate the success of the measures?

A full impact assessment has not been produced. Although the stated impact may be minimal, these are system-wide changes. Reporting under the Medicines and Medical Devices Act occurs on a two-year cycle. Does the Minister consider that sufficient, or will interim data on safety, workforce, deployment and uptake be made available?

These are important questions to answer, and His Majesty’s loyal Opposition do indeed support a framework that is safe, proportionate and future-proofed, but one which has been properly stress-tested.

[Baroness Merron (Lab)]

My Lords, I am most grateful to noble Lords for participating in this debate. I appreciate the welcome for these measures and the acknowledgement of their importance from the Opposition Front Bench and the noble Baroness, Lady Bennett. I will turn to some of the questions. I will, of course, be very pleased to write to noble Lords on anything I am unable to answer.

The noble Baroness, Lady Bennett, raised the issue of provision of Covid-19 vaccinations and remarked that Covid is still very much with us; I am not quoting her directly but that is what I took from what she said. In answer to that, this is a big change, but it is now a relatively mild disease—I stress relatively—for, I stress again, most people. It can still be unpleasant, but I am glad to say that the rates of hospitalisation and death have reduced significantly since the pandemic. These proposals, as I mentioned in my opening remarks, are very much about building on the successes that we saw in the Covid-19 and the flu vaccination programmes. As I mentioned, they are about taking that best practice and ensuring that we have a vaccination system in the future.

The noble Baroness also asked about private vaccination services. It is still the case, of course, that the NHS offer of vaccination is there for all those who are at higher risk of serious outcomes; there are a number of such people and we want to ensure they are properly looked after. Private provision is also available, as the noble Baroness said, as with some other vaccines. The availability and price of any vaccines provided through the private market is a matter for the private sector and not something that we seek to regulate.

On travel vaccines, as I am sure the noble Baroness is aware, a number of such vaccines are available free on the NHS through GP surgeries. These are against polio, typhoid, hepatitis A and cholera. These vaccines are free because they protect the public against those diseases that are thought to carry the greatest risk if they were to be brought into this country.

17:00

[Baroness Bennett of Manor Castle (GP)]

One of the vaccines on the list of those that are only available privately is against typhoid. There was a publication last week, I believe, looking at the spread of antimicrobial resistance to typhoid and the fact that antibiotics that we have been using against typhoid for decades are now increasingly not working. Can the noble Baroness assure me—again, I will understand if she wants to write—that the Government keep this constantly under review? Drug-resistant typhoid would be very serious; 10 or 20 years ago we might have thought that we could just treat people, but that may no longer be the case.

[Baroness Merron (Lab)]

I can certainly assure the noble Baroness that effectiveness is kept under review. I know that she was not questioning this, but I also re-emphasise that typhoid vaccinations are available free on the NHS from GP surgeries. It is important to give that reassurance.

The noble Earl, Lord Effingham, asked where ultimate legal and clinical responsibility lies. An appropriate person has to be responsible for ensuring that only fully competent qualified and trained health professionals are individually authorised to use the most recently approved version of the VGD. That authoriser is usually a clinical manager or service lead. Authorised health professionals working under VGDs must understand their legal and professional responsibilities before they use VGDs. This follows the same principles set out in the NICE guidance. In that respect, I say to the noble Earl that this is not a new situation, but I accept it is quite right to ask about that.

The noble Earl also asked how we will ensure that changes translate into improved uptake. He will know our commitment to stabilising and improving uptake across the vaccination system, including, importantly, among those in underserved communities and groups that have historically lower vaccination rates. We have set out actions to improve uptake in our 10-year plan, as well as in our strategy Giving Every Child the Best Start in Life. We are also taking a multipronged approach, if I can put it that way, to improving vaccination uptake. That includes exploring whether there are other settings, such as community pharmacies and health visitors, who can assist in this. We also seek to continue to deliver clear messaging on the risks of disease and the benefits of vaccination. Importantly, we are investing in better digital services and data so that we know where we can target our efforts.

With regard to the question about community pharmacies having the necessary training and equipment if there are, unfortunately, adverse reactions, all providers and trainers have to ensure that those who are involved in vaccination have the right, high-quality training that enables them to deal with such reactions. I should say—I hope that this is a reassurance—that the amendment does not change the training expectations of those staff. Also, they are consistent: it does not matter where the service is being delivered.

A full impact assessment covering these amendments was carried out in 2023. It considered that making the relevant parts of the regulations permanent and expanding them is unlikely to create any significant additional impact. The amendments delivered by this SI are not controversial and do not reach the cost to business threshold; as such, a de minimis assessment was carried out and published on GOV.UK.

I hope that noble Lords will accept that, in amending these regulations, the Government are seeking to maintain important safety measures while increasing the effectiveness of the system’s supply chain and workforce. With that, I thank noble Lords for their contributions and questions.

Motion agreed.

Goods Vehicles (Testing, Drivers’ Hours and Tachographs etc.) (Amendment) Regulations 2026

Monday 9th March 2026 Grand Committee

Considered in Grand Committee

17:07

Moved by

[Baroness Blake of Leeds]

That the Grand Committee do consider the Goods Vehicles (Testing, Drivers’ Hours and Tachographs etc.) (Amendment) Regulations 2026.

Relevant document: 51st Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)

[Baroness in Waiting/Government Whip (Baroness Blake of Leeds) (Lab)]

My Lords, the provisions of these draft regulations relating to roadworthiness testing are to be made under the powers conferred by Sections 41(1), 41(2), 41(5), 45(1), 45(2), 45(7), 46(7), 47(5), 49(1), 49(2) and 51(1) of the Road Traffic Act 1988. The measures concerning drivers’ hours and tachographs are to be made under the powers provided by Section 14(3) of the Retained EU Law (Revocation and Reform) Act 2023.

These regulations will amend roadworthiness testing, drivers’ hours and tachograph rules for zero-emission vans weighing over 3.5 tonnes, up to and including 4.25 tonnes, which I will hereafter refer to as 3.5 to 4.25 tonne zero-emission vans. The regulations will align the regulation of these vehicles with the regulation of internal combustion engine vans weighing over 3 tonnes, up to and including 3.5 tonnes, by making three key changes.

First, they will move 3.5 to 4.25 tonne zero‑emission vans from the heavy vehicle testing regime into the class 7 MoT testing system. Secondly, they will amend the timing of the first roadworthiness test by changing it from a first test one year after initial registration, with annual testing thereafter, to a first test three years after initial registration, with subsequent annual testing. Thirdly, they will move 3.5 to 4.25 tonne zero-emission vans from the assimilated drivers’ hours rules into the Great Britain drivers’ hours rules. Unlike the assimilated drivers’ hours rules, the GB drivers’ hours rules do not require the use of tachographs to record driving time, meaning that tachographs will not be required to be installed in 3.5 to 4.25 tonne zero-emission vans.

Domestic transport is the highest greenhouse gas-emitting sector of the economy, accounting for 30% of emissions in 2024. Road freight acts as a significant contributor to greenhouse gas emissions, and the number of vans on the road has consistently increased over recent years. Van traffic in 2024 was 9.5% higher than in 2019. Removing additional regulatory burdens will support van operators in switching from internal combustion engine vans to zero-emission alternatives. This will help reduce transport emissions and the move towards net-zero transport.

I note that 3.5 to 4.25 tonne zero-emission vans are technically classified as heavy goods vehicles because they have a maximum authorised mass of over 3.5 tonnes. However, they are used for broadly the same purposes as internal combustion engine vans under 3.5 tonnes and in many cases are visually indistinguishable from them. By aligning the regulatory requirements of 3.5 to 4.25 tonne zero-emission vans, with up to 3.5 tonne internal combustion engine equivalents, these regulations are expected to drive the uptake of zero-emissions options and support reductions in greenhouse gas emissions from the growing van fleet.

These regulations are part of a wider suite of government action to drive the switch to zero-emission vehicles. This includes the zero-emission vehicle mandate, which sets sales targets for manufacturers applying to both cars and vans, with a headline target for vans in 2026 of 24%, on a pathway to 100% by 2035. Greater flexibilities were added to the mandate in October 2025 to support manufacturers in reaching these targets.

The Government are supporting the uptake of zero-emission vans via the plug-in van grant, which offers a maximum discount of £5,000 for vans weighing up to 4.25 tonnes, and through grant funding for charge points. In addition, in June 2025, regulations were introduced allowing the holders of a category B driving licence to drive zero-emission vans up to 4.25 tonnes without any additional training. The same regulations also provided the equivalent towing allowances for 4.25 tonne zero-emission vans as is available to their internal combustion engine counterparts.

These amending regulations will therefore provide additional regulatory consistency for operators switching to using a 3.5 to 4.25 tonne zero-emission van. At present, these vans are required to undergo a heavy vehicle test every year from first registration. These tests are carried out by staff from the Driver and Vehicle Standards Agency at authorised testing facilities. These regulations will mean that 3.5 to 4.25 tonne zero-emission vans are tested via the class 7 MoT test, which is currently used to test 3 to 3.5 tonne vans, with a first test three years from registration. The private sector class 7 MoT testing network is larger than the network of authorised testing facilities, providing greater choice for van operators. Combined with a later first test and a lower test cost, this will reduce the administrative burden on operators choosing to make the switch to a zero-emission van.

Moving 3.5 to 4.25 tonne zero-emission vans from the assimilated drivers’ hours rules into the GB rules will also provide regulatory consistency for van operators, as internal combustion engine vans weighing under 3.5 tonnes are already in scope of the GB rules. The GB rules do not require the use of tachographs to monitor driving time, removing an additional cost currently experienced by zero-emission van operators. The extra administrative burden for fleets, where drivers regularly switch between different types of vans and therefore different sets of drivers’ hours rules, is also removed by these regulations.

Both the roadworthiness testing regime and the drivers’ hours rules are in place to support road safety, and this has been an area of focus during the development of these regulations. Class 7 MoT testing is already used for vans with similar dimensions to 3.5 to 4.25 tonne zero-emission vans. While they are heavier, these vans may come with features such as regenerative braking that can support safer driving.

The daily driving limit under the GB drivers’ hours rules is only one hour longer than the limit under the assimilated rules, and the daily duty limit of 11 hours will restrict drivers from working long hours on other non-driving tasks. Following the implementation of these regulations, road safety data will be closely monitored. Both the number of collisions and their severity will be analysed to understand the impact on road safety, if any, of these regulations.

17:15

Amendments will be made to the Goods Vehicles (Plating and Testing) Regulations 1988, to remove 3.5 to 4.25 tonne zero-emission vans from scope. Instead, these vans will be added to the Motor Vehicles (Tests) Regulations 1981. Amendments are also made to the tyre-tread depth requirement in the Road Vehicles (Construction and Use) Regulations 1986, to ensure that 3.5 to 4.25 tonne zero-emission vans have the same requirements as other vehicles that undergo class 7 MoT testing.

The existing national derogation to the assimilated drivers’ hours rules contained in paragraph 6 of the Schedule to the Community Drivers’ Hours and Recording Equipment Regulations 2007 for goods vehicles weighing up to 7.5 tonnes—and used within a 100-kilometre radius from base and propelled by natural or liquefied gas or electricity—is revoked. It is replaced with a wider national derogation that adds 3.5 to 4.25 tonne zero-emission vans to the vehicles exempted from the assimilated drivers’ hours rules, as well as reinstating the derogation for 7.5 tonne alternatively propelled goods vehicles used within a 100-kilometre radius from base. The regulations contain a review clause, requiring their effectiveness to be assessed and set out in a published report no later than five years after they come into force.

As part of its consideration of these regulations, the Secondary Legislation Scrutiny Committee raised concerns that after June 2026, when the powers available in the Retained EU Law (Revocation and Reform) Act 2023 expire, the Government would not have powers to amend the drivers’ hours rules by secondary legislation. The Department for Transport is disproportionately impacted by this issue, due to the extent to which transport legislation fell within EU competence. In many historic cases, we relied on Section 2(2) of the European Communities Act 1972 to legislate. In addition, the EU also implemented international agreements automatically on our behalf via directly effective legislation. The department is actively looking at solutions to close or mitigate these gaps at the earliest opportunity to maintain a functioning statute book, including via introducing primary legislation where needed, as soon as parliamentary time allows. This will include looking at potential legislative vehicles among future DfT Bills, as well as those of other departments.

These regulations apply in Great Britain only. The SLSC also drew to the attention of your Lordships’ House the creation of divergence between Great Britain and Northern Ireland by these regulations, and the implications for vehicles travelling between them. This area is devolved in Northern Ireland, and so it is for the Northern Ireland Executive to legislate in this area should they wish to do so. This is not a type-approval issue and regulations concerning drivers’ hours and tachographs are not included in the Windsor Framework.

The Department for Infrastructure in Northern Ireland has said that it will monitor the implementation of these changes in Great Britain, but any decision to make similar changes in Northern Ireland will rest with the DfI Minister in Northern Ireland. Officials in the DfT and the DfI are working together to manage the changes for operators of GB zero-emission vans travelling between GB and Northern Ireland. The department will ensure that communications to operators are clear that the new requirements introduced within GB by these regulations do not apply in Northern Ireland. After considering these regulations, the Joint Committee on Statutory Instruments did not issue a report or draw any issues to the attention of the House.

To conclude, these regulations will support the uptake of 3.5 to 4.25 tonne zero-emission vans by removing regulatory barriers to their use. The changes to both the roadworthiness testing requirements and the drivers’ hours rules will reduce administrative burdens and ensure that operators choosing to transition to a zero-emission van are not subject to more onerous obligations than those using equivalent internal combustion engine vans. Supporting van operators to make the switch to using a zero-emission van will reduce emissions from the transport sector and support vehicle manufacturers in reaching targets included in the zero-emission vehicle mandate. I hope noble Lords will join me in supporting these measures.

[The Deputy Chairman of Committees (Viscount Stansgate) (Lab)]

I have been advised that we are expecting back-to-back votes on Amendments 369 and 369A to the Crime and Policing Bill, which are currently under discussion in group 1 in the Chamber. The Minister is on his feet, and it is quite possible that we will be interrupted before very long. If we are interrupted for two votes, the Committee will stand adjourned for 20 minutes from the time the Division Bell rings.

[Lord Pack (LD)]

This is a welcome statutory instrument, particularly given the importance of growing the zero-emission sector and its potential role for reducing the health and environmental impacts of our transport systems.

As I have on other occasions, and perhaps will again in the future, criticised other SIs for either not reflecting previous consultation responses or taking too long to appear after a consultation, it is only right to acknowledge that, in this case, the SI definitely does reflect the broad results of that earlier consultation and indeed has appeared at a much speedier pace than many other SIs. Even so, it has been a year since the consultation concluded, so I hope the department will continue to look at ways of speeding up the turnaround of its legislative work.

Reducing the regulatory burden is certainly welcome where it can be done safely and without undermining other policy objectives or causing other problems. With that in mind, I have three questions that I hope the Minister can give reassurance on.

First, as the Minister has touched on already—and as the Secondary Legislation Scrutiny Committee, of which I am a member, highlighted in its report on the SI—once the powers in the Retained EU Law (Revocation and Reform) Act 2023 expire in June this year, which is now only a few weeks away, there are no primary powers available to further amend the assimilated EU retained drivers’ hours and tachograph regulations. If it turns out that further legislative change in that area is needed or would be beneficial, that gap in the department’s powers could become a problem.

It was welcome that the Minister mentioned that the department plans to address this at the earliest opportunity. I hope she does not mind me pressing to see whether it is possible to get something a bit more specific than that, as that could cover anything from days to centuries, given the pace at which some items proceed in this place.

Secondly, given the improved safety features we are seeing on zero-emission vehicles, the move towards heavier vehicles—which this SI is part of—should not, I am sure we all hope, turn out to be at the expense of overall road safety. It is likely, for the reasons the Minister gave earlier, that the SI gets this balance right and rightly encourages zero-emission vehicles without endangering road safety. However, as they are generally heavier, it is important to be sure that we are getting this right. Can the Minister provide a bit more detail about the plans the department has to keep this situation under review?

I ask that because when the Motor Vehicles (Driving Licences) (Amendment) (No. 2) Regulations came through the system last year and were scrutinised by the Secondary Legislation Scrutiny Committee, the department very much focused on how zero-emission vehicles are no more likely to be in an accident than other vehicles. It gave—I think it is fair to say—relatively little consideration to the risk that, even if there are not more accidents involving zero-emission vehicles, their typically greater weight might mean those accidents are more severe in nature.

That focus on the frequency rather than severity of accidents unfortunately continues in the Explanatory Memorandum for this statutory instrument. It is absolutely fair to say, and it is very welcome, that in response to questioning from the Secondary Legislation Scrutiny Committee, the department engaged more directly with the issue of the severity and not merely the frequency of accidents. I therefore hope that the Minister will take this opportunity to be clear about the department’s commitment to tracking whether increased weight causes any safety issues that need further action to address, and in particular what data will be published, and with what frequency, to make sure that we can be confident that these changes are working.

Finally, as mentioned earlier, there is the Northern Ireland angle and the divergence we will see in tachograph requirements between Great Britain and Northern Ireland. The Government’s approach, as I understand it, rests heavily on saying that this will not be a problem, because the number of relevant zero-emission vehicles which currently travel between Great Britain and Northern Ireland is fairly small. There is, though, a potential tension between a policy that is designed overall to increase the number of zero-emission vehicles in use, yet also depends in part on the number of those vehicles in use between Great Britain and Northern Ireland being and remaining small. As the Minister mentioned earlier, there are certainly powers and responsibilities that rest with the Northern Ireland Executive in that area, but if we are changing rules for Great Britain that may have an adverse knock-on effect for Northern Ireland, that is obviously our responsibility as well. I hope the Minister can reassure us that monitoring will be done of the number of relevant zero-emission vehicles travelling between Great Britain and Northern Ireland.

I hope that on all three points, the answers will be such as to reassure everyone that the result of this statutory instrument will be a welcome, safe and practical growth in the use of zero-emission vehicles.

[Lord Moylan (Con)]

My Lords, it is a pleasure to follow the noble Lord, Lord Pack, but also quite annoying, because he has made about three-quarters of my speech, and with his customary effectiveness and clarity.

I too start by emphasising the importance, as it seems to us, of the fact that almost through carelessness, the Department for Transport is going to lose, in a very short space of time, its legal ability to make amendments, not just in this area but, as the Minister herself said, in a wide number of areas of policy. We will be left in a position where it will be possible to make these often technical adjustments only by primary legislation.

This date of June 2026 has been in the diary now for something like three years. I seem to remember a case, a long time ago, of George Bernard Shaw writing a letter to the Times, which began “Saturday morning, despite occurring at regular and predictable intervals, always appears to take the staff of Baker Street station by surprise”. We are in a very similar position here. June 2026 has been in the diary for a long time, yet here we are.

Just think through the practicalities: everyone assumes, I think rightly, that we are approaching the end of a parliamentary Session and we will then have a Prorogation, a King’s Speech and a State Opening. Before we know where we are, we will be in June and the Government, on behalf of this department, will still have no legislation to table to give themselves the range of powers they normally need. That is not just carelessness, it is a dereliction of duty, and the Official Opposition will be holding the Government fully to account. I can hardly believe that I am saying this, but it is what is actually happening, although the department could have planned for it a long time ago.

As for future transport legislation, we know that the Railways Bill will be arriving from the Commons after Prorogation, in the new parliamentary Session. Is that the instrument that the Minister has it in mind to amend in order to give the powers—I see some potential scope issues in that regard—or will a new and separate Bill be brought forward, and on what timescale? We need to know these things and it is ceasing to be a joke.

The second aspect relates to the question of Northern Ireland. What we are seeing here, and this applies to the remainder of my remarks, is that the commitment to net zero is now taking over and becoming responsible for all sorts of problems and costs, not merely financial. One of them, because the vans we are discussing are mostly used for commercial purposes, will be a disruption to trade and the provision of services—artisanal services, plumbers, whatever—between one part of the United Kingdom and another because we have chosen to do this.

The Minister appeared to say that this is not a problem arising from the Windsor Framework; it is entirely because the power involved rests with the Northern Ireland Assembly. If that is the case, what contact and what effort has the department made to co-ordinate this action and decision with Northern Ireland, so that these unnecessary barriers do not arise? Will the Minister tell us what discussions have therefore taken place?

Those are the immediate topics. What is the timetable, what is the practical proposal for resolving the legislative gap, and what contact occurred between the department and the Northern Ireland authorities to try to ensure that these measures went ahead in tandem and that this rupture—this unnecessary rupture, as it now appears—in trade between different parts of the United Kingdom did not take place?

17:31

Sitting suspended for Divisions in the House.

17:52

[Lord Moylan (Con)]

My Lords, I was just coming to the point of saying that—as the noble Lord, Lord Pack, pointed out—we are now seeing personal safety and road safety being sacrificed on the altar of net zero. It is undoubtedly the case that heavier vehicles have a greater impact when an accident takes place. I am not claiming, nor did the noble Lord claim, that they are more likely to have an accident but they will certainly have a greater impact. This is exactly the same physics that lies behind the argument that speed limits in city areas should be cut. The impact is a function of the speed times the mass. If you increase the mass, you are putting back—so to speak—what you have gained by reducing speed limits in cities. That is what the Government are doing. They are playing recklessly with personal safety on the road, including that of vulnerable users in particular, such as pedestrians and bicyclists, as well as those driving other motor vehicles.

There is a further point that was not mentioned by the noble Lord, Lord Pack: the effect on the roads themselves. The roads in this country in many places are breaking up. It is not simply a matter of potholes now but of another complete dereliction by the department. In many cases, the base of the road is being damaged because maintenance is being neglected. It is no good the Government saying they put a certain amount of money into it—which is what they always say when this point is brought up—because it is not having an effect on the roads. The roads are breaking up. A lack of maintenance means that the effect is not simply on the surface—the potholes—but on the base. Very often you can see that on many rural roads, which are breaking up, and a huge bill is being stored. Part of that is to do with heavier vehicles.

Some of those heavier vehicles—all the heavy SUVs and so on—are heavier for reasons that I do not personally approve of. Another reason is that we are actively encouraging heavier vehicles, and doing so through measures such as this one. We did it through the amendments to the driving licence provisions, which we dealt with late last year. Now we are doing it in relation to the testing regime and the drivers’ hours rules for vans. The Government are driving forward, and they are very much driven by net zero, with no regard for the consequences for personal safety and road surfaces—and now, of course, we need to add the bridges.

I say on a personal note that, years ago, I used to have some responsibility for Albert Bridge as a local councillor, and I see that it is now closed. At that time, we spent quite a lot of money bringing Albert Bridge up to a standard where it could bear and be safe for 3-tonne vehicles—that would be the weight limit. Now that 3-tonne limit is almost of historical interest, so another bridge across the river in London is being taken out of use. What is the Government’s plan for this? There is no plan for any of this. They have not thought about any of these things; they just drive ahead recklessly with net zero.

Although this measure appears to have a purely technical character, it is very significant in a number of respects that I have set out in my speech. The Government need to start taking these things seriously, because otherwise they will be abandoning their transport-related duties. That is something we will constantly highlight and oppose.

[Baroness Blake of Leeds (Lab)]

My Lords, I thank the noble Lords, Lord Pack and Lord Moylan, for their comments on this important area of work. Some of the points raised have come together from both noble Lords, if from slightly different angles, so perhaps they will forgive me if I cover them together.

One of the major themes coming through was the concern about the devolved Administrations and divergence. Just to reiterate, the regulations apply in Great Britain only; to reinforce that, this policy area is devolved to Northern Ireland and the officials in the Department for Infrastructure there have been updated on the regulations. I want to reassure noble Lords that the department in Northern Ireland is currently considering the potential impact the introduction of this legislation may have on regulatory divergence between Great Britain and Northern Ireland. It is considering the impact of proposals that have been presented by the European Commission on drivers’ hours and tachograph requirements, which mirror the changes in these regulations—I think the noble Lord, Lord Moylan, picked up on some of the details around this.

I can only repeat that decisions on changes in Northern Ireland will be for Northern Ireland Ministers. While officials in the DfT and Northern Ireland’s Department for Infrastructure are working together to manage the impact of these measures on GB operators for the change in vans that regularly travel to Northern Ireland, we want to minimise the impact on trade between Northern Ireland and Great Britain.

In the meantime, drivers of 3.5 to 4.25 tonne zero-emission vans will need to ensure that their vehicle complies with the applicable law while operating in Northern Ireland, including ensuring that they are meeting testing requirements and that their vehicle is fitted with a tachograph. For further reassurance, I can inform noble Lords that the noble Baroness, Lady Anderson, speaks regularly to her counterpart in Northern Ireland to make sure that they are kept appraised of progress.

[Lord Moylan (Con)]

My Lords, is the noble Baroness able to answer my specific question? What contacts took place between her Government and the authorities in Northern Ireland, prior to the tabling of this secondary legislation, with a view to ensuring that the legislative gap did not exist—in other words, that they could proceed in harmony?

[Baroness Blake of Leeds (Lab)]

I think the noble Lord will understand that I cannot be specific at this point about the exact detail. I am happy to write to him to make sure that he is fully apprised of the contact between the two areas.

On the road safety theme that has been picked up, I reassure noble Lords that there is no data to suggest that there is likely to be an increase in the collision rate following the introduction of these regulations. In fact, some van operators have indicated that they experience a lower collision rate with their 3.5 to 4.25 tonne zero-emission van fleet compared with the equivalent diesel vans. This may be due to features such as the regenerative braking that I mentioned earlier, whereby braking energy is captured and can be reused, reducing wear on brakes. It is also important to note that, although heavier, in most cases these vans are the same physical size as the diesel vans they replace.

18:00

Safety data will be an important part of the post-implementation review of these regulations, which is due before the end of five years from when the regulations come into force. Any change in either the rate or severity of collisions involving these vehicles will be monitored to determine whether these regulations have had an impact on road safety. Again, I am happy to write to the noble Lord, Lord Pack, to give further information and detail around the data to make sure that he is kept up to speed with the information that we are gathering. The class 7 MoT test provides a high level of assurance of vehicle safety and roadworthiness. All vehicle operators are under an obligation to keep vehicles roadworthy at all times.

Noble Lords mentioned power gaps. The majority of the Retained EU Law (Revocation and Reform) Act powers will expire on 23 June 2026, as has been mentioned. This includes the power to revoke, or revoke and replace, assimilated law with a similar or alternative provision, which comes under Section 14; and the power to restate or reproduce sunset-retained EU rights, powers or liabilities under Section 12 for retained EU law. After June 2026, the Government can continue making changes to assimilated law to support the national interest under powers in existing or future domestic primary legislation. There is currently no such provision in primary legislation for further amendments to the assimilated drivers’ hours rules or the existing national derogations from those rules.

The Government are exploring ways to resolve the power gap that will exist in relation to the assimilated drivers’ hours rules when the REUL Act powers under Section 12 and 14 expire in June 2026. As I said, this includes seeking opportunities to take new primary powers to enable future changes to the hours and tachograph regulation when parliamentary time allows.

In answer to the noble Lord, Lord Moylan, if an urgent safety issue were to arise, the Government would consider what legislative options were available at that time, including whether a suitable primary legislative vehicle could be brought forward. Using the REUL Act powers to make these changes at this time is the most appropriate course of action given the potential benefits of these regulations for businesses. I cannot give an exact timetable or dates for any future legislation, but noble Lords will of course be kept informed as we progress.

I turn to the issue of road safety. I emphasise that there is no data to suggest that there is likely to be an increase in the collision rate but, to give some reassurance, safety data will be an important part of the post-implementation review of these regulations that is due before the end of the five years, as I said. Any change in the rate or severity of collisions involving these vans will be monitored to determine whether these regulations have had an impact on road safety. We need to make sure that all vehicle operators comply with their requirements.

Picking up on the comments of the noble Lord, Lord Moylan, about heavier vehicles on roads and bridges, I have been concerned about the neglect of road maintenance of over many years. I am therefore delighted to confirm that a record £7.3 billion of investment into local highways maintenance over the next four years will bring annual funding for local authorities to repair and renew their roads and to fix potholes to over £2 billion annually by 2029-30. This new four-year settlement—which is always welcome to local authorities, as the noble Lord is well aware—is in addition to the Government’s investment of £1.6 billion this year, a £500 million increase compared to last year. In addition to increasing the available funding, the department has confirmed funding allocations for the next four years, enabling better planning and a move away—it is important to emphasise this—from expensive short-term repairs, which we know do not last or serve their purpose, towards investing in proactive, preventative maintenance, so that roads can be properly fixed and kept in a good condition. We know the damage that potholes cause and how dangerous they can be, and I am delighted to say that this Government are determined to do something about them.

On the point about bridges, most road bridges are constructed to withstand loads imposed by vehicles weighing much more than 4.25 tonnes, and where that is not the case, they will be adequately signposted. As with road wear, the vehicles that cause the greatest amount of wear on bridges are heavy goods vehicles and buses rather than cars and vans. In addition, probably through consumer choice and improving safety for passengers, there has been a trend for heavier passenger cars over the past year, and many petrol and diesel cars are as heavy as electric vehicles.

I take issue with the comments about moving to net zero. Given the particular circumstances that we are living through at the moment, and the risk of disruption to supplies in the Middle East as a result of recent activity, the imperative is even clearer—if I can be so bold. Therefore, we make no apologies for enabling progress in this area.

To conclude, these draft regulations amend legislation on roadworthiness testing and drivers’ hours rules for 3.5 to 4.25 tonne zero-emission vans. They align the requirements for these vehicles with those that apply to otherwise equivalent internal combustion engine vans, ensuring a consistent and fair regulatory framework. In doing so, the regulations reduce burdens on businesses and support the uptake of zero-emission vans, helping to cut emissions from the logistics sector and assisting manufacturers in meeting their zero-emission vehicle mandate targets.

Motion agreed.

Electricity and Gas (Energy Company Obligation) (Amendment) (Specified Period) Order 2026

Monday 9th March 2026 Grand Committee

Considered in Grand Committee

18:09

Moved by

[Lord Whitehead]

That the Grand Committee do consider the Electricity and Gas (Energy Company Obligation) (Amendment) (Specified Period) Order 2026.

[The Minister of State, Department for Energy Security and Net Zero (Lord Whitehead) (Lab)]

My Lords, this draft order was laid before Parliament on 26 January 2026. This Government remain fully committed to ensuring that households, particularly those on low incomes or at risk of fuel poverty, can live in warmer, more energy-efficient homes that are affordable to heat. At the heart of this endeavour lies the new warm homes plan, a comprehensive and long-term strategy to reduce energy bills, alleviate fuel poverty and enhance energy security. We have committed to investing £15 billion—the biggest-ever public investment to upgrade British homes and cut energy bills. Of this amount, £5 billion is allocated to support low-income households.

The energy company obligation—ECO—has played a key part in helping households to reduce their energy bills. The energy company obligation was first launched in 2013. Since its launch in 2022, ECO4 has delivered slightly over 1 million energy-saving measures to approximately 300,000 households. The scheme places an obligation on the larger energy suppliers to deliver energy-efficiency improvements to vulnerable and fuel-poor households that result in measurable bill savings.

While ECO4 has delivered a significant volume of home energy-efficiency improvements, it has not been without challenges, as set out recently by the National Audit Office, among others. There have been widespread, systemic issues in the delivery of solid- wall insulation, which we have taken urgent steps to tackle. We are bringing forward comprehensive reforms to the retrofit consumer protection system to make it stronger, more transparent and more accountable so that this cannot happen again. We expect all installers to ensure that households receive timely and high-quality remediation of any non-compliance identified.

Given these systemic issues and inflation that is still too high, we have taken the considered decision not to replace ECO4, therefore easing pressure on household energy bills. This, in combination with the Government funding 75% of the domestic cost of the legacy renewables obligation, will remove around £117 of costs on average from household energy bills across Great Britain.

This statutory instrument introduces a small and necessary change to the existing scheme by extending the end date of ECO4 by nine months from 31 March to 31 December 2026. This extension provides obligated suppliers with additional time to meet their existing targets and, most importantly, it allows them time to focus on remediation of non-compliant installations. I emphasise that the instrument does not change targets, impose new obligations, or increase supplier costs or consumer bills.

As I conclude, I thank the Secondary Legislation Scrutiny Committee for its consideration of this instrument and for not drawing it to the special attention of the House. The changes made by this instrument, which is in essence a very simple one, are limited but important. By extending ECO4, we are ensuring a stable period of delivery and an orderly closure to the scheme, and are safeguarding consumers. I beg to move.

[Earl Russell (LD)]

My Lords, I will respond on the Electricity and Gas (Energy Company Obligation) (Amendment) (Specified Period) Order. While appearing to be only a minor adjustment today, this SI is important, as it involves the need to protect the most vulnerable in our society from poorly insulated homes and fuel poverty.

The ECO4 scheme has been a fundamental component of our national strategy to address the dual crisis of fuel poverty and the climate emergency. We have always supported its ambition to reduce the costs of heating for low-income households. This amendment seeks to extend the scheme’s duration by nine months to 31 December 2026. The reasons for doing this require a little bit of scrutiny. The Government say that this extension is necessary for the remediation of non-compliant installations and to ensure the orderly closure of the scheme.

18:15

The truth is, as the Minister alluded to, that remediation is really due to the very significant volume of work that has already been carried out under this obligation that was substandard or failed to meet the necessary criteria. The level of poor and incompetent work done to date is, obviously, deeply concerning for all of us. We believe that the quality is as important as the targets themselves.

Can the Minister say a few words about how many families have been living in homes where the promised energy efficiency measures were installed so poorly that they now require remediation? Can he give any information on the percentages of ECO4 installations affected, particularly in relation to cavity wall insulation where there have been complaints?

I am not against the Government’s strategy. We welcome the warm homes plan. We are not necessarily against ending ECO4. I also recognise that much of this predates this Government. As the Minister said, the Government have taken considerable action to deal with these past problems. They are conducting audits and systematically checking, and there are plans to try to make sure, through either removing trademarks or cost recovery, that schemes actually deliver the home insulation to the standard that we require.

I want to ask the Government about the decision to leave the annual bill savings target stagnant. I am just a little bit concerned about this. As was talked about in the last SI today, we have a new energy crisis because of events in the Middle East, and we still have millions of homes facing fuel poverty. Can the Government really justify nearly a year of long extensions that does not include a corresponding increase in the obligation? By failing to raise these targets, are we not effectively just giving a free pass to the big energy suppliers in this delivery of these programmes?

I wanted to also ask about the absence of a full impact assessment with the SI. The department asserts that this is because

“There is no, or no significant, impact on”

the private or voluntary sectors. I want to just question that a little bit. This is a nine-month delay in the completion of a multi-billion-pound energy efficiency programme. To my mind, that most certainly has impacts. It has impacts on supply chains, and they need certainty. It has impacts on local authorities, which are trying to co-ordinate these efforts. It has impacts on households, which are waiting for work to be put right where they need remediation.

While the scheme is extended, a hard deadline of 31 March 2006 is set for certain applications regarding innovation and data-light measures. Why are we closing the door on innovation for nine months before the scheme itself ends? I just want to clarify: is this because the Government are expecting these areas to be picked up in the warm homes plan? Is that where that stands?

Finally, I must ask about the transition after December 2026. The Explanatory Memorandum talks about an “orderly scheme closure”, and obviously we are moving over to the warm homes plan. When we talked about the warm homes plan, we talked about the need for suppliers, installers and the industry not to have a cliff edge. Can the Minister confirm again that there will be an orderly co-ordination between the end of the extension of this scheme and the picking-up of the warm homes plan, so that the industry will be able to cross that continuation without any financial problems?

With the SI, we have the extension, and then we have a hard end to that. What happens if, during the period when all the remediation work is being done, there are problems with that work itself? Obviously, we all hope that there will not be any further problems but, if there were—particularly with trying to fix cavity-wall insulation, given where that has gone wrong and where the fixes do not work—where would recompense and fixing all that fit in, considering that this scheme ends in December 2026?

[Baroness Bloomfield of Hinton Waldrist (Con)]

I thank the Minister for his introduction of this statutory instrument. This order extends the energy company obligation end date by nine months to ensure an orderly transition for consumers and suppliers to help meet existing targets. This extension was determined following consultation and following the calls of business. On that basis, we on these Benches support the order.

The ECO was established to help households reduce energy consumption and lower heating costs. Since it was launched in 2013, around 4.4 million measures have been installed in 2.6 million properties, up to the end of September 2025. ECO4 is the latest version of that scheme, beginning in 2022. It has meant that approximately 949,800 measures have been installed in around 281,000 households.

It is of course right that, where there were non-compliant installations, installers fund the repair work, overseen by Ofgem and insured by further on-site audits. We have already committed to working cross-party to ensure that affected households receive the remediation they deserve. We understand that the Government now seek to end this scheme and replace it with their warm homes plan to provide loans and grants to households instead; indeed, they have claimed that this will result in a £150 cut from the average household bill.

However, although the end of the ECO scheme means that households will no longer pay the levy through their energy bills, the new plan will be funded through taxation. There is no clarity, therefore, that this will end up saving taxpayers money in the long term; indeed, the new taxpayer funding initiative, coupled with rising energy costs—particularly now—and already high installation costs, mean that it looks increasingly unlikely that the Government will be replacing the ECO with an improvement. Have the Government made any assessment of how much taxpayers will save overall? To what extent are these projections reliant on projected energy costs, which will now be redundant? Oil prices are already 50% higher than in the OBR’s projection last week.

I appreciate that these questions are about issues that are outside the Minister’s control, but they have ramifications for the Government’s policy. Is it really wise to push forward with tax-and-spend green policies, which will likely do little to reduce costs, at a time of global instability? I understand that these are also developing events and that they do not directly relate to the functioning of the ECO.

Returning to that, it would be helpful to clarify how much money taxpayers will now be expected to pay to cover the cost of this new extension period. As I have stated, I support the extension to ensure an orderly transition, but the public must know what they will pay. I restate our support for this order to help consumers and suppliers but, more broadly, we remain concerned that the Government’s plan will, ultimately, not save taxpayers money. I look forward to hearing the Minister’s response.

[Lord Whitehead (Lab)]

I thank noble Lords for their constructive contributions to this afternoon’s debate; I hope to respond to their points in a similarly crisp and succinct fashion.

First, the noble Baroness, Lady Bloomfield, asked how much taxpayers will pay for the extension of the ECO. The answer is: nothing. The ECO will continue exactly as it has previously, except it will be extended by nine months. There will be no new obligations, only the continuation of obligations that are already in place. Of course, there will be an opportunity to make sure that the remediation that will be necessary for a number of treatments is carried out in good time, and will be sorted out and finished by the time the ECO comes to an end.

Of course, the ending of ECO4 will in itself save bill payers a considerable amount of money. Indeed, as the noble Baroness knows, ECO4 is, in effect, an obligation on energy companies, which they passed on to customers in the form of bills. Alongside the cost of some other legacy obligations, such as the renewable obligation, the removal of that obligation and the end of ECO4 will remove, as I said, around £117 of costs on average from household energy bills across Great Britain.

It is true that the new warm homes plan is underwritten from general taxation, but it is a substantial transfer from direct customer bills to general taxation, with the resulting saving that I have outlined. The warm home scheme is a far more far-reaching programme over a longer period, with a substantial investment of up to £15 billion in it. In the long term, that will be judged by the difference between what has been put in it and what has resulted from the energy savings coming about as a result of the warm homes plan— this will, obviously, be further savings to customers’ bills—as well as by the efficiency with which the warm homes plan is put into place.

The noble Earl, Lord Russell, asked about the arrangements for remediation in properties that the Government consider should be undertaken during the period of the extension of the ECO4 programme for nine months. As I am sure he will know, the NAO report considered that almost all of the external wall insulation measures had major issues requiring remediation; to put that into context, that is about 40,000 treatments, as compared with the 1 million-plus treatments that there were in ECO4 overall, but external wall insulation was a particular problem for the scheme. To a lesser extent, that applies also to internal wall insulation: 29% had major issues requiring remediation, and the NAO considered that a smaller number of treatments had possibly falsified claims attached to them.

Part of the task of this extension is to ensure that those remediations, which are down to the installers to put right, can be done during the period of the ECO extension. The noble Earl raised the possible issue of what the position is if we have got to the end of the period of extension and some of the remediations have not been done. I emphasise that these remediations are being done by obligated installers, first, but also under a strengthened trust mark arrangement for oversight, with increasing audits, site inspections and various other things as regards non-compliance detection and enforcement. So, the people who have to do that remediation will be known about, clearly, and Ofgem has taken the action of writing to all of the people who are possibly in a position where they can have remediation undertaken in order to offer them the opportunity to go on a register for remediation.

This is driven to some extent by installers and to some extent by customer demand for that remediation, and it is backed up by a strong code that makes sure that it gets done. Even if that strays beyond the end of the extension of ECO, it is not the end of the story as far as that remediation is concerned. It will be done. If it is in danger of life and limb it has to be done immediately, but if it is less serious, as it were, it has to be done during the course of that extension.

We think the Government have a good belt-and-braces position as far as those remediations are concerned, and that ECO can come to an end in an orderly fashion. That is quite important in terms of the issues that both the noble Earl and the noble Baroness mentioned about whether there is a cliff edge between what is happening with the end of ECO4 and the beginning of the warm homes plan. Among other things, this extension will mean that there is less of a cliff edge. Indeed, in conjunction with industry, the Government are active in holding round tables to enhance the ability of industry that has invested in ECO4 to transition to activity under the warm homes plan. I hope that it will not be such a cliff edge as the noble Earl mentioned and will run reasonably smoothly—if not necessarily entirely smoothly—into the warm homes plan itself, and therefore a lot of the investment that various companies have put into ECO4 can be realised through the warm homes plan.

Motion agreed.

Employment Rights Act 2025 (Investigatory Powers) (Consequential Amendments) Regulations 2026

Monday 9th March 2026 Grand Committee

Considered in Grand Committee

18:33

Moved by

[Baroness Lloyd of Effra]

That the Grand Committee do consider the Employment Rights Act 2025 (Investigatory Powers) (Consequential Amendments) Regulations 2026.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)]

My Lords, this instrument makes consequential amendments to the Investigatory Powers Act 2016 following Parliament’s decision in the Employment Rights Act 2025 to create the Fair Work Agency, and brings together the functions of the Gangmasters and Labour Abuse Authority, the Employment Agency Standards Inspectorate and HMRC’s national minimum wage enforcement teams. It ensures that officers performing the same GLAA-derived criminal enforcement functions will continue to have access to the same investigatory tools under the same statutory thresholds and safeguards once they sit within the new agency.

Where the GLAA is currently named in the Investigatory Powers Act, these regulations update that reference so that the Department for Business and Trade, in so far as it relates to the Fair Work Agency, is listed instead. All of the underlying safeguards in the IPA, including the statutory requiring purpose, the minimum 12-month sentence threshold and the requirement for necessity and proportionality, remain exactly as Parliament originally set them.

I fully appreciate that the powers to acquire communications data are intrusive and must be used only when necessary and proportionate. These powers concern the who, when and where of a communication—that is, subscriber details, timings and location data—but not the content of any call, message or email. They do not reveal what a person said or wrote. They remain significantly less intrusive than interception, yet they are vital tools in tackling the most serious forms of labour exploitation, where victims are often too frightened, too isolated or too controlled to come forward with evidence.

It may help the Committee if I explain the scope of these powers. Under the Investigatory Powers Act, communications data authorisations will be able to be given to the FWA only for the purpose of preventing or detecting serious crime. This is defined in primary legislation, and one of the key elements is that the offence must carry a sentence of at least 12 months’ imprisonment; that statutory threshold remains unchanged. We need to ensure that the Fair Work Agency can continue to investigate the same serious exploitation offences, including unlicensed gangmastering and modern slavery, that the GLAA handles today. Those offences already meet the existing statutory definition of serious crime, and therefore fall within the same communications data authorisation framework, applying the same necessity and proportionality tests and the same independent scrutiny as before. The threshold, authorisation process and full oversight of the Investigatory Powers Commissioner remain exactly the same.

In transferring these functions to the Fair Work Agency, we have ensured that the safeguards that apply under the Investigatory Powers Act will continue in full. Communications data applications will remain subject to independent scrutiny by the Investigatory Powers Commissioner’s Office, including routine inspections and case sampling. The established single-point-of-contact system will continue to play its gatekeeping role, with an accredited specialist assessing every request to ensure that it meets the statutory crime purpose and satisfies the stringent tests of necessity and proportionality. Requests will still require authorisation by a designated senior officer at the appropriate grade and will continue to be submitted for approval by the Investigatory Powers Commissioner’s Office, with only limited provision for urgent internal authorisation.

The Fair Work Agency will operate in full compliance with the communications data code of practice, ensuring that standards of record-keeping, error reporting and handling of sensitive material remain exactly as they are today. In short, the framework of safeguards that Parliament has already put in place remains completely unchanged. The change made by this statutory instrument is the updating of the public authority’s name, ensuring continuity of capability following Parliament’s decision to transfer the GLAA’s enforcement functions to the Fair Work Agency.

The GLAA has always used these powers sparingly. Historically, the number of communications data applications has been modest and focused on a small number of the most serious investigations, often concerning organised criminal exploitation, threats of harm or potential trafficking. That discipline of “last resort” use and that culture of necessity and proportionality will continue in the Fair Work Agency.

On implementation, the Fair Work Agency will bring together three regulators into a single recognisable body, making the system easier for workers to navigate and clearer for responsible businesses. This consolidation will not dilute expertise. Existing GLAA specialists will continue to carry out GLAA-derived criminal enforcement with the same training, oversight and legal powers. Early operational arrangements, including access controls and internal governance structures, will ensure that only appropriate officers can apply for or authorise investigatory activity.

On transparency, the Investigatory Powers Commissioner will continue to report annually on the use of these powers, providing Parliament with a clear overview of how these powers are exercised. In addition, I can confirm to the Committee today that the Fair Work Agency will report on its use of the Investigatory Powers Act powers in its annual report. This will allow Parliament to see clearly that use continues to be confined to GLAA-derived criminal investigations, just as today. We will reflect this commitment in the Fair Work Agency’s framework agreement and in its enforcement policy statement, in line with good practice.

This statutory instrument is essential housekeeping. It prevents an unintended and undesirable drop in capability during a period of organisational transition and ensures continuity in tackling serious labour exploitation while keeping all of the guardrails that Parliament put in place firmly intact.

[Lord Hunt of Wirral (Con)]

My Lords, the instrument before us is, on the face of it, a technical one. As the Minister explained, it ensures that enforcement officers of the new Fair Work Agency inherit the same communications data powers, under the Investigatory Powers Act 2016, that officers of the Gangmasters and Labour Abuse Authority held before them. However, the creation of the Fair Work Agency is the moment at which this Committee confers covert investigatory powers on a body whose structure, resourcing and operating principles remain, to a troubling degree, undefined.

I turn first to what I regard as the most fundamental concern: the departure from the settled policy of targeted, sector-specific enforcement. The GLAA was created for a reason. It was designed to address the specific and acute vulnerabilities of workers in agriculture, food processing, shellfish gathering and related sectors—industries where the risk of exploitation and labour abuse was demonstrably high and where ordinary enforcement mechanisms were plainly insufficient.

The Fair Work Agency sweeps that away. It appears that it will have a broad mandate to inspect any business in any sector at any time. That is a significant departure; we were given no adequate explanation for it during Committee or Report on the Employment Rights Act 2025. On what evidential basis have the Government decided that the enforcement problems, which were previously confined to high-risk sectors, now require a body with universal reach? What assessment has been made of the risk that this broader mandate will dilute the quality and focus of enforcement, rather than improving it? The Minister just mentioned a framework agreement, but am I not right in saying that this Committee has not yet seen even a draft of it? Perhaps the Minister will clarify that aspect.

This matters acutely for small and medium-sized enterprises, which are already facing more than £600 million in costs flowing from the Employment Rights Act—costs that are, in large part, administrative in nature, such as in record-keeping, compliance processes and reporting obligations. These activities will now fall within the Fair Work Agency’s line of sight. These businesses, many of which are without dedicated human resources functions or legal support, will be exposed to an agency that is armed with powers of entry, powers to seize documents and electronic records, and now, through this instrument, powers to obtain communications data covertly. What guidance will be issued to ensure that enforcement action against small businesses is proportionate? What safeguards exist to distinguish a genuine, minor administrative error from deliberate wrongdoing? Will businesses that make honest mistakes face the prospect of document seizure, substantial financial penalties and the full weight of this agency’s investigatory apparatus?

Businesses have said that they want any action taken against them to be proportionate, and that the Fair Work Agency should function primarily as a compliance partner, not as a punitive instrument. The Minister has said that she shares that aspiration, and I invite her to say how that aspiration will be given legal and operational effect.

18:45

I turn to resourcing. The Fair Work Agency will absorb the functions of three existing bodies: the GLAA, HMRC’s minimum wage enforcement directorate and the Employment Agency Standards Inspectorate. Presumably, the staff of those bodies will transfer to the new agency. Can the Minister just confirm that all existing employees will transfer under TUPE? If not, which staff will not transfer and on what basis? For those who do transfer, will their terms and conditions be preserved in full?

Beyond staffing, I should also ask the Minister directly what the budget is for the Fair Work Agency. The Government’s own impact assessment gestures at set-up costs, yet we have no published, costed funding plan for the Fair Work Agency as a unified agency. I hope the Minister is aware of the report of the Business and Trade Committee, which had some very critical comments to make about the lack of any such plan. The impact assessment said:

“Limited evidence and an incomplete design of the operational and organisational structure of the FWA mean that it has not been possible to quantity the impact of benefits arising from its introduction nor the majority of associated costs. Where costs have been calculated they are limited to the one-off costs faced by businesses in order to familiarise themselves with changes to the enforcement system. We estimate that these costs would be £33m”.

The Committee added that it was still in the dark about the overall cost of this particular agency. Its recommendation, as I understand it, remains unaddressed.

I also raise the question of the Equality and Human Rights Commission. The Government have pointed to the FWA as a mechanism to reduce duplication in the enforcement landscape. I welcome the goal of coherence, but can the Minister explain precisely what duplication exists under the present system that the new agency will remedy? How can she address directly the concern, raised by the Equality and Human Rights Commission itself, that Schedule 4 to the Employment Rights Act opens the door to extending the Fair Work Agency’s remit into discrimination law?

We all agree that workers in this country should be protected from exploitation and abuse. But support for that goal does not require acquiescence in a body whose mandate is broader than justified, whose resourcing is unconfirmed, whose approach to proportionality is undefined, and whose relationship with businesses and workers remains unclear. I hope that the Minister can alleviate some of the concerns that I have raised today.

[Baroness Lloyd of Effra (Lab)]

I thank the noble Lord for his series of questions on this matter. To come back to its core, the statutory instrument has a strictly limited purpose to ensure that the same investigatory powers currently applying to the GLAA transfer smoothly to the new Fair Work Agency. The Fair Work Agency will enforce the legislation listed in Schedule 7—not all employment legislation. On day one, the Fair Work Agency will take the same remit and powers of current regulators, subject to existing and enhanced safeguards, which will continue to apply.

On the noble Lord’s question about going wider, as I mentioned, this applies only to serious crimes under the legislation that have a minimum 12-month sentence threshold. This is a very limited series of offences—the most serious that we encounter in the labour market today. He also asked when the framework agreement will be published. It will be published on 7 April alongside the statutory instrument.

The noble Lord questioned the culture of and approach to enforcement and recalled that we have previously discussed the interests of small businesses and micro-businesses and the culture of enforcement more generally. We have thought about how the Fair Work Agency will go about its work. The idea of a single enforcement body will make it easier for small employers to understand their obligations and get the right guidance early. The agency is focused only on taking firm action against the small minority of rogue employers who exploit workers, and the idea is to ensure fair competition for responsible businesses. That is the approach we are taking. This statutory instrument is about transferring those legal powers that are currently housed within one agency to another.

On resourcing and funding, the budget for the Fair Work Agency will be set out in the usual way through the department’s allocation processes. Given that the Fair Work Agency will have additional areas of remit under the Employment Rights Act, it will have a larger budget than its predecessor organisations combined. We will communicate that budget when the organisation is set up. On the question of the transfer of employees, all staff will transfer under the Civil Service equivalent of TUPE—that is the model that will be used.

I reinforce that the protections will remain in place. This is about ensuring that the powers for very serious crimes are transferred to the Fair Work Agency, so that it has the means to pursue those limited but serious offences under the full oversight of the Investigatory Powers Commissioner. This SI is essential to enable that smooth transition, and I commend it to the Committee.

Motion agreed.

Committee adjourned at 6.53 pm.