Employment Rights Bill

Lord Ashcombe Excerpts

Committee stage
Tuesday 29th April 2025 Lords Chamber

[Baroness Verma (Con)]

My Lords, I also support these amendments from my noble friend and other noble Lords. It would be really helpful if the Government took a hard look at this. I spoke to coffee shop owners over the weekend, and to a very small business that is trying to manufacture British products in this country. They are all very worried about how they are going to cope with the burdens that will be placed on them.

It may well be useful for the Government to go back and look at whether they can make an exception for small businesses up to a certain number of employees—maybe three, maybe five and at least for those that have no ability other than to reach out and pay for very expensive advice, which often they cannot afford. These small businesses are at the heart of our high streets in local communities. They add value and are familiar to customers. The very small business—the micro-business, but particularly businesses with 10 employees or less—should be exempt from this Bill.

[Lord Ashcombe (Con)]

My Lords, it a pleasure to support my noble friend Lady Noakes and the noble Lords, Lord Londesborough and Lord Vaux of Harrowden, on Amendment 5 and their other amendment.

Small businesses and microbusinesses form a vital component of our national economy. These enterprises, while often agile and innovative, are particularly vulnerable to regulatory and financial pressures. Like all businesses—I should declare that I work for a very large American insurance broker—these enterprises have had to absorb the recent increases in the national minimum wage and adapt to the changes in national insurance contributions legislation. However, unlike larger businesses, they often lack the structural resilience and financial buffer to absorb such changes with ease. The impact on them is therefore disproportionate. This amendment proposes a sensible and measured opt-out for SMEs from additional obligations stemming from the proposed changes to zero-hours contracts—specifically, the move towards tightly prescribed guaranteed hours. As the Government’s own impact assessment acknowledges, these reforms are likely to have a disproportionate cost on small businesses and microbusinesses. I stress that this is not speculation but is drawn directly from the Government’s impact analysis.

Small businesses and microbusinesses span a wide range of sectors, but many are embedded within the UK as world-renowned creative industries that bring global acclaim and substantial economic benefit to this country. Many are driven by the energy, passion and commitment of individual entrepreneurs and small teams. I have had the privilege of speaking with several such business owners during the course of this Bill, and a recurring concern has emerged: the smaller the business, the harder it is to digest and manage such legislative change. Some have gone so far as to tell me that they are considering closing their operations altogether. That is a deeply troubling prospect. It is no exaggeration to say that measures such as these, if applied without nuance, risk undermining the very entrepreneurial spirit that we so often celebrate in this House.

There seems to be a regrettable habit forming on the Government Benches of legislating in ways that hinder rather than help the economic engines of this country. This approach is not conducive to national growth. It is not conducive to competitiveness. It is not conducive to job creation. It is certainly not conducive to easing the burden on the Exchequer—quite the opposite. Driving small businesses to closure will reduce tax receipts and increase demand for state support. We need to encourage investment, not chase it away.

Can the Minister explain clearly why this legislation must apply so rigidly to a critical sector of our economy? Why must we impose further burdens on the very businesses that we rely on so much for our innovation, employment and growth? Is there no room for proportionality and no scope for recognising the distinct challenges that are faced by the smallest enterprises? What I have said applies, to a great extent, to the middle-sized companies mentioned in Amendment 282, tabled by my noble friends Lord Sharpe and Lord Hunt of Wirral.

I leave your Lordships with a quote from the Spirit of Law by Montesquieu:

“Commerce … wanders across the earth, flees from where it is oppressed, and remains where it is left to breathe”.

[Baroness Lawlor (Con)]

My Lords, I support the amendments tabled by my noble friend Lady Noakes and the other amendments in this group. I do so as an employer, and my interests are declared in the register.

I am a very small employer, in a not-for-profit company. I am therefore one of the microbusinesses to which my noble friend Lady Noakes has referred—those which have zero to nine employees. I echo what the noble Lord, Lord Londesborough, said: smaller businesses will find it very difficult to afford the costs which this Bill will impose upon them.

Small businesses and the employers in them are not the adversaries of those we take on. Many small businesses, including a number in the digital sector, are start-ups—some started in that garage, about which Hermann Hauser once spoke. They build up their teams and develop by commitment. Each member of the team taken on is an asset—not just an expensive potential asset but a cost to begin with, in time and in the compliance of dealing with every member of the workforce. Such businesses do not have large HR teams or sometimes any HR teams. There is a cost in the salary and in trying to keep the employee by continuing to raise the salary as often as one can. There is also a cost in the investment of time.

--- Later in debate ---

[Lord Leong (Lab)]

I thank the noble Lord for that, but IKEA is pretty supportive of the overall intention of the Bill and of the national minimum wage, which is obviously outside the scope of the Bill, such as what we are doing on zero-hours contracts, other short-term contracts and all that. I will write to the noble Lord with further details on the various clauses that it supports.

Various noble Lords asked about the impact assessment. The benefits of the Bill that were published by the TUC show that even modest gains from reforms to workers’ rights will benefit the UK economy by some £13 billion. Opposing this, the impact assessment says that the costs to business would be some £5 billion or 0.4% of employment costs. The benefit is huge, and economists have done research on this.

I cannot agree more with the noble Lord, Lord Londesborough, who says that start-ups and scale-ups definitely generate employment. It is absolutely right that we have to support them and I strongly believe that the Bill does support them.

Various noble Lords mentioned day-one rights and difficulty in recruiting employees. Remember that, when you run a small business, yes, it is very competitive to employ your first employee: sometimes you have to compete with the big companies in matching salaries or even benefits. I believe passionately that the Bill puts SMEs on a level playing field with large companies, where they can offer the basic benefits in the Bill.

Sometimes we asked: why are we excluding SMEs because it is so difficult for employers to recruit, and why should employees in SMEs not get day-one rights? My answer is: why not? Why should they not get day-one rights? As I said, they are the people who work for the owners, for the owners to make the profit. Without them, the owners will not have a business, so it is very important that they are supported and I believe strongly that good businesses provide fantastic support to their employees.

[Lord Ashcombe (Con)]

My Lords, I am not sure that it is the difficulty in recruiting that is the real problem for small and micro businesses; I think it is the fear of recruiting. That is a really different point.

[Lord Leong (Lab)]

I thank the noble Lord for that. I might turn that around and say that, if I am looking for a job, I have a choice of big or small companies. I am taking a chance and a risk working for a very small company. I am not sure whether that company will last. That risk works two ways. I strongly believe that most people work for companies not because of what the company does but because they look at the owner or the founders and whether they want to work with such people. At the end of the day, the employees will also be taking a chance on the employer.

Employment Rights Bill

Lord Ashcombe Excerpts

2nd reading
Thursday 27th March 2025 Lords Chamber

[Lord Ashcombe (Con)]

My Lords, I declare my interest as an employee of a very large American insurance broker.

This Bill is deeply concerning, especially considering the recent legislative changes, such as the £25 billion raised through national insurance contributions and the 6.7% increase in the national living wage coming into effect next week. These developments are already creating significant challenges for businesses. Together with the regulations in this Bill, they highlight a troubling anti-business and anti-growth stance that risks undermining the foundations of the business community.

While the Bill aims to support workers and create a fairer society, it comes with substantial costs for many businesses, particularly small and medium-sized enterprises. These businesses will struggle to absorb these additional expenses without negative consequences. The key question is: how can businesses continue to grow and create jobs when burdened by such regulatory costs?

One of the many provisions in this enormous Bill is the introduction of a separate legal status for probation periods, alongside the removal of the qualifying period for unfair dismissal. This means businesses could face tribunal claims even during an employee’s probationary period. Although the Government have proposed a lighter-touch approach for probation, the details are yet to be fully determined and will depend on future consultations and secondary legislation. With tribunal waiting times already long—18 to 24 months—it is crucial to ensure that weak claims are dismissed promptly to avoid further strain on businesses. Whatever happens, it is more cost.

Moreover, the Bill introduces reforms to zero-hours contracts, including the right for workers on low-hours contracts to receive a contract reflecting the hours worked in the previous 12 weeks. However, the definition of low hours remains unclear and this uncertainty adds complexity for businesses in managing their workforce. Additionally, the Bill suggests allowing businesses to offer fixed-term contracts during high-demand periods instead of permanent contracts. If regulated effectively, this could help businesses better manage fluctuating demand. However, shifting the responsibility on to businesses to track when such rights are triggered and to offer contracts adds another layer of administrative burden. The Bill’s provisions on dismissal and re-engagement could also complicate restructuring efforts, potentially limiting a business’s ability to adapt to changing market conditions, such as office relocations or adjustments to working conditions.

I will only briefly mention the “Harassment by third parties” clause, which my new noble friend Lord Young of Acton has addressed so well. I believe it puts businesses in a near impossible position in trying to protect their colleagues and staff. It is essential that we find a balance between protecting workers’ rights and ensuring that businesses remain competitive, innovative, agile and responsive to the challenges of a rapidly changing domestic economy.

These changes, combined with the risks associated with permanent contracts, reduced flexibility in workforce restructuring and higher compliance costs, create a challenging environment for businesses. The Government must ensure these policies do not stifle the growth and job creation that the country needs. The anti-business and anti- growth narrative emerging from these legislative changes requires careful scrutiny. We must ensure that businesses are not overwhelmed by unnecessary bureaucracy and red tape. A thriving business environment is not only beneficial for businesses but also essential for the broader economy and the growth that this country desperately needs.

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

My Lords, I remind all noble Lords to stick to the time of four minutes. Thank you.

Watchdogs (Industry and Regulators Committee Report)

Lord Ashcombe Excerpts

Monday 9th September 2024 Lords Chamber

[Lord Ashcombe (Con)]

My Lords, I am delighted to be able to take part in this debate, but before I start I should declare my interest as an employee of Marsh McLennan, the insurance broker. I thank the noble Lord, Lord Hollick, and his committee for this report and believe that nothing but good can come from this debate around the performance, independence and accountability of the UK regulators. I know that it was welcomed by many within London’s commercial insurance and reinsurance markets.

The committee’s report was particularly welcome in the context of the Financial Services and Markets Act 2023, which established a number of new accountability metrics and mechanisms, including a secondary objective for international competitiveness and growth for the FCA and PRA. These two regulators are now required to publish annual competitiveness and growth reports, the first of which were published in late July. These reports represent an important step forward and illustrate how the new accountability measures introduced are starting to engender a culture change in these regulators. Time will tell of progress. They also provide an opportunity for noble Lords, via the Financial Services Regulation Committee, to scrutinise the performance of these two regulators.

To take advantage of dynamic changes, businesses need to be able to respond swiftly to new opportunities and risks. They will have many choices about how and where to do that, so the speed, responsiveness and willingness of the regulators to support these innovations are vital factors. If London is to remain the global centre of risk transfer and retain its reputation for innovation, it needs to be able to offer customers all the tools available—tools used in competitor jurisdictions.

The noble Lord, Lord Hollick, touched on two topics, captive insurance and insurance-linked securities, which I would like to go a little further on. I am particularly interested in the potential of captive insurance, a rapidly growing global market estimated by Marsh McLennan to reach $161 billion by 2030, and of which the UK has no share. Core to its success will be the approach by the regulators; the regime needs to be designed and structured in a balanced and proportionate way. I urge the regulators to learn from their experience of the ILS market, an area where the UK market has broadly stalled—unlike Singapore, which copied the UK’s framework in 2019, since when 28 transactions have been launched thanks to the proactive work of its regulator, the MAS.

I welcomed the inclusion of a consultation on the creation of a UK captives regime in last year’s Autumn Statement. I understand that significant progress had been made prior to the general election about that consultation nearing publication. Pressing ahead and establishing the UK as a relevant captive domicile would mean that the UK could take advantage of a market that is growing rapidly, contribute to growth and bring back taxpayer capital currently held in the captives of UK public bodies based offshore. I hope that this House will continue to review these essential topics in the years to come. We have an important part to play in making the FCA and PRA fulfil their primary and secondary objectives.

I finish with two questions to the Minister. First, does she agree that, given that a number of UK public sector bodies currently base their captives offshore, the creation of a UK regime would be a positive step in bringing back taxpayer capital to the UK? Secondly, can she provide the House with an update on the Government’s work in preparing a consultation on the creation of a UK captives regime and, furthermore, will she prepared to meet me and other noble Lords interested in the potential of this market, to seek our views? We all want growth, with the UK economy thriving and driving our nation’s prosperity.

Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [HL]

Lord Ashcombe Excerpts

Committee stage
Thursday 14th December 2023 Grand Committee

Those who have spoken on these measures are extremely knowledgeable and understand the risks for our own safety and that of our animals. Border control is clearly not fit for purpose at the moment. I fully support the comments of those who spoke before me, and I look forward to the Minister’s positive response.

[Lord Ashcombe (Con)]

My Lords, I wish to return to our invisible trade and speak in support of Amendment 13, on inward investment, and Amendment 14, on financial services trade, tabled by my noble friend Lord Holmes. I declare my interests as an employee of Marsh Ltd, the insurance broker.

There are significant advantages of being part of CPTPP in its early stages and being able to influence the shape and development of many aspects of the treaty, in particular financial services. To get the most from membership, we need to develop trade strategies that play to our economic strengths and ensure that we are working to remove barriers to cross-border trade that could benefit the UK.

I will take the two amendments in reverse order—it may be my upbringing in Ireland. The assessment proposed in Amendment 14 would inform a strategy about how the UK Government, working with our regulators, could seek to expand partnerships with CPTPP markets and address market access barriers, which would expand growth opportunities for UK financial services. In particular, the assessment should look closely at the regulatory barriers within certain CPTPP countries. They are set out within Annex III of the treaty, which lists the domestic barriers to cross-border financial services trade.

We need to consider how we can reduce those barriers, to the benefit of both the UK and our new partners. For example, the Government have rightly identified Malaysia as a crucial trading partner. Malaysia is much in need of the kind of support our world-class financial services businesses can offer. The London insurance market could play a major role in helping the country to protect itself against the increasing threat of cyberattacks. Malaysia has fallen victim to an increasing number of such attacks. Indeed, 62% of Malaysian businesses have put off digital transformation efforts due to fear of cyberattacks.

The UK’s commercial insurance industry is made up of global innovators when it comes to protections against these risks. However, Malaysia has an extremely protective, complex and restrictive insurance regime to be navigated before permitting offshore reinsurers to be offered a risk. Many other CPTPP countries operate with differing restrictions, making it hard for UK markets to trade. Reducing these barriers would help treaty countries such as Malaysia to reinsure their risks through London and out of the country, taking advantage of the global insurance capital that London can access and thereby gaining better protection by spread of risk. It is not just cyber risk; we can help protect from a myriad of other exposures as well. These are the opportunities that are on offer, and Amendment 14 would give us a plan and a set of priorities to consistently pursue.

I turn to Amendment 13. Growing cross-border trade and encouraging inward investment are two sides of the same coin. We must ensure that the UK is a welcoming, agile, easily navigable place to do business, and use the opportunities that agreements such as CPTTP bring to really sell what the UK has to offer to our trading partners.

My noble friend Lord Harrington’s review of foreign direct investment is a very welcome addition to this debate. His recommendations for a business investment strategy, for our regulators to be much more focused on inward investment, and for a consistent government strategy towards encouraging investment are all applicable to financial services and would greatly enhance our offer to CPTPP investors.

This is an approach that other CPTPP members are actively pursuing. As my noble friend Lord Holmes mentioned, the Monetary Authority of Singapore has a team dedicated to growing Singapore’s share of global industry, separate and distinct from regulatory colleagues but providing a joined-up and seamless service to those seeking to invest, create jobs and support growth. Another example is the Singapore College of Insurance, which is regarded as the most powerful insurance qualification in the Asia Pacific region, extending Singapore’s influence and shaping markets. Ours are extremely well thought of as well and should meld in. Australia is also looking ahead and has been growing its influence in the region, having signed a free trade agreement with Indonesia in 2020—a potential future and very significant member of the CPTPP.

Both these amendments would therefore help to ensure that we can take full advantage of being part of this living agreement, which is likely to be significantly developed in the years ahead. We need to prioritise the areas where we are economically strong and use our expertise to the benefit of our economy.

[Lord Davies of Brixton (Lab)]

My Lords, I have a quick question for the Minister arising from Amendment 14. I need to declare an interest in the context of professional qualifications, and as a fellow of the Institute and Faculty of Actuaries. I heard what the noble Lords, Lord Holmes and Lord Ashcombe, said about the potential for financial services. There is a very big debate to be had on that, but at table 5, on page 46 of the impact assessment, the percentage change in trade shows a decline in the UK’s financial services and an increase in imports of financial services. Maybe the Minister could help the Committee by reconciling what the noble Lords said and what the impact assessment is telling us.