Employment Rights Bill

Lord Fox Excerpts

Consideration of Commons amendments and / or reasons
Tuesday 16th December 2025 Lords Chamber

[Lord Vaux of Harrowden (CB)]

My Lords, at Second Reading in March—nine months ago, although it feels longer ago—I said that

“the Bill will damage growth and, most importantly, the employment opportunities of the most vulnerable people”.—[Official Report, 27/3/25; col. 1907.]

After nine months of debate and scrutiny, it is less damaging, but I still believe it is not a good Bill. It still piles cost and regulation on businesses and on the public sector at a time when we should be doing exactly the opposite.

But this House has done its job well and responsibly. We have pointed out the unintended consequences that the Bill may have, the potential damage to the employment prospects of the young and others, and the disproportionate impact on the backbone of our economy—smaller businesses. We have given the other place several opportunities to think again and, to be fair, it has done so in a number of areas. In particular, the Government have compromised on what I believe was the most damaging aspect, day-one dismissal rights.

We have also quite rightly registered our constitutional disapproval of the introduction of a material change at the very last minute—the abolition of the cap on unfair dismissal, which is the subject of Motion A. The Minister stated last week that the amendments were “context- and Bill-specific”. I take this and her reference to

“discussions with the Leader of the House on how she and other Members would like to conduct business more regularly”—[Official Report, 10/12/25; col. 276.]

as confirmation that the Government accept that this should never be seen as a precedent. This House would be right to reject it if it were ever used as a precedent in the future.

I have a lot of sympathy with the Motion proposed by the noble Lord, Lord Sharpe, but I am afraid I will not support it at this stage. We are in danger of over- egging the impact of the removal of the cap. I do not support it, but the water bosses, for example, will be remunerated if they are fired for contractual reasons, which is unlimited anyway. It is not going to be under the unfair dismissal rules. I am not convinced that it makes an enormous difference, but the noble Lord is quite right that we do not have an impact assessment yet.

Despite our giving it the opportunity to think again on many aspects, the other place has disagreed with our changes and decided that it wants to go ahead. That now also includes the cap on unfair dismissal claims. The time has come for us in this House to respect the will of the elected Chamber and let the Bill pass, regardless of any remaining concerns that I and many others still have. I will vote against the amendment for that reason.

I end with a final plea to the Minister. She will be aware of the latest employment figures and the worsening trend. She will also be aware that what the ONS described as this “subdued labour market” is disproportionately affecting young people. We should all be very concerned about that. The Resolution Foundation is also clear on this:

“As is typical in economic downturns, young people have been hit hardest. With unemployment expected to stay elevated, Government should be cautious about any further increases in labour costs”.


Much of the implementation of this Bill will be by regulation, which will follow over the coming years. I urge the Minister to ensure that the concerns that have been raised in this House and elsewhere are kept front and centre, and that the unintended consequences that may arise, especially for young people, are thought through very carefully while the regulations are being created.

It was encouraging that the Government listened to business organisations in the later stages of the Bill, especially around the unfair dismissal question. I urge the Minister to ensure that the Government continue to listen constructively to the concerns of those who will create the growth and jobs that will drive the economy, and especially that they make a much greater effort to hear the concerns of smaller businesses which are feeling rather ignored and concerned at the moment. That said, it is time to let the Bill pass.

[Lord Fox (LD)]

My Lords, this time last week I said that much had happened in the preceding interval. Today, the opposite is true. We are now down to one issue, but the arguments on that issue remain as they were last week. For that reason, unlike last week, this speech will be short.

There remain concerns about the removal of the cap on compensation, as we have heard. As he did last week, the noble Lord, Lord Sharpe, has taken those concerns and amplified them, to the seeming exclusion of the wider strategic position of what we are discussing. I understand the motives, and those motives became ever clearer just now. If the noble Lord would like to have a face-off on the water industry, I would be very happy to discuss with him the hundreds of thousands of tonnes of sewage that went into the rivers under the Conservative Government and the compensation terms that he very helpfully enumerated, which happened on his watch. However, this is not the arena for that argument, and I will pass without comment. My critique of the noble Lord’s amendment to the Motion is unchanged. We believe there are better ways of dealing with the cap than derailing the package that got the key concession with which we are all very pleased.

As set out last week, reiterated in the Minister’s letter and by the Minister just now, the Government will publish an enactment impact assessment for the Bill. They will do so prior to commencement regulations which would put in place the dismissal package. That was what we on these Benches were asking for and we were pleased to receive that assurance. Further, the impact assessment will be publicly available, and I was pleased to hear the Minister say that we will be engaging the community of business in the process of developing that impact assessment.

Many UK business associations and organisations share the feeling that there is nothing to be gained from the opposition amendment today. They are asking the opposite. As the Minister set out, six of the major organisations have sent a letter. It is a longish letter, as the noble Lord, Lord Sharpe, demonstrated by selectively picking elements out of it. But as the noble Lord, Lord Pannick, pointed out, the conclusion is clear and actually unambiguous, in saying,

“we believe that the best way forward is to keep working with the government and trade unions to find balanced solutions through secondary legislation. To avoid losing the 6 months qualifying period, we therefore believe that now is the time for Parliament to pass the Bill”.

I said that last week, and it is truer this week.

I also pointed out last week that, as the business organisations said, the key to enacting the Bill will be through secondary legislation. If His Majesty’s loyal Opposition care about how the Bill is brought into life, it is on those statutory instruments that they should focus their attention. Their critical actions must extend to include the possibility of fatal Motions to vote down secondary legislation and keep the Government focused on the needs of British business. That is the real arena that we should be working in.

If the amendment from the noble Lord, Lord Sharpe, is put to a vote and he seeks to extend ping-pong to yet another round, that will clearly be against the advice of the business groups which have been cited. I urge your Lordships to heed the advice of those organisations, and the advice of the noble Lords that we have heard opposite, and pass the Bill now.

[Baroness Lloyd of Effra (Lab)]

My Lords, I again thank your Lordships’ House for its attentive scrutiny throughout the passage of the Bill. There can be no doubt, as the noble Lord, Lord Vaux, mentioned, that this House has discharged its duties as a revising Chamber. Your Lordships’ House asked the Government to look again, and we have worked collaboratively with noble Lords to reach this agreement. I thank the noble Lords, Lord Fox, Lord Pannick and Lord Vaux, for their speeches in favour of the compromise proposed by the Government.

I turn to a number of the issues raised, in particular by the noble Lord, Lord Sharpe. I remind noble Lords that negotiations are successful only where there is compromise, as was so eloquently put in the previous debate by my noble friend Lord Barber of Ainsdale, the former chair of ACAS. The Government and worker representatives moved considerably during negotiations to agree to retaining a six-month qualifying period. Without similar compromise from business representatives on the removal, this deal would have been one-sided and undeliverable.

On the question of the impact of the cap, I do not think I can do better than the noble Lord, Lord Pannick, who said last week that

“the concerns that have been expressed about the impact of the removal of the cap are perhaps … exaggerated”.—[Official Report, 10/12/25; col. 276.]

Just now, he mentioned that he does not believe it will lead to the chaos that the noble Lord outlined earlier. It is not our view, but, in any case, as I mentioned, we will publish the enactment impact assessment as soon as the Bill achieves Royal Assent. It will be public and transparent, and will include an assessment of the impact of removing the compensation cap.

I remind noble Lords of our commitment to convene meetings with shareholders so that those from the City, law practitioners and others can feed into that. Those findings will be taken into account by the dispute resolution task force that we are setting up—it will have all that information to hand. We are obviously very keen to improve the functioning of the dispute resolution system. We inherited something that was not in a good state. We are providing ACAS with over £65 million in resource funding, which is a significant increase. We are working actively to make this a system that works extremely well.

I hope that this afternoon will mark the end of the Bill’s journey through Parliament. I reiterate the Government’s commitment, mentioned by other noble Lords who spoke today, to continue talking to and genuinely engaging with interested parties in the way we have recently about the full range of issues discussed today. The Bill will deliver a generational shift in employment rights. It will do so by working with businesses and trade unions in a collaborative manner. These changes to the qualifying period and the compensation cap are proportional and practical. For those who are concerned about business impact, the joint letter should provide noble Lords with reassurances that businesses support this workable agreement. As they have stated,

“now is the time for Parliament to pass the Bill”.

I hope noble Lords will recognise the progress made over the past nine months, oppose the amendment tabled by the Opposition Front Bench, and, in doing so, support the package to deliver certainty for businesses and fair rights for workers. It is indeed time for Parliament to pass the Bill. I commend it to the House.

Employment Rights Bill

Lord Fox Excerpts

Consideration of Commons amendments and / or reasons
Wednesday 10th December 2025 Lords Chamber

Moved by

[Lord Fox]

Leave out from “disagreement;” to end and insert “do disagree with the Commons in their Amendments 1E and 1F in lieu of Lords Amendment 1B; and do propose Amendments 1G and 1H in lieu of Commons Amendments 1E and 1F—

1G: Clause 1, page 3, line 24, at end insert “and that period must be not less than 26 weeks”

1H: Schedule 1, page 153, line 13, at end insert “and that period must be not less than 26 weeks””

[Lord Fox (LD)]

My Lords, similarly to the Minister, I beg the House’s indulgence because, if this speech is longer than a speech would normally be for round three of ping-pong, it is because, as she pointed out, there have been developments since we last debated the Bill.

My Motion A1 addresses a major issue that has caused us concern. As I have said repeatedly, we support the principle that workers should have a right to guaranteed hours after completing a period of zero-hours work. Our concern has always lain in the cumbersome administration of that right. After several attempts to make what I think were meaningful improvements without undermining that principle, I must admit I have felt quite frustrated on this issue.

However, as we heard just now from the Minister, it is reassuring that the Government have taken these concerns on board. As she partially explained, the reference period is crucial in setting how often the employer must make a new offer of guaranteed hours to an employee. I point out that the employee does not necessarily have to want that offer; there is merely an obligation on the employer to make it. Clearly, if this offer has to be made every month, it is much more burdensome than if it has to be made once or twice a year. That is the nature of the amendment that I have tabled.

I understand that this is subject to consultation, and I am reassured by the description of the consultation that the Minister has just given. My choice of 26 weeks was, first of all, in a sense, to emphasise the point between a month, 26 weeks or 12 months, but also to spark the sort of response that I have just had from the Minister. In that respect, I am satisfied.

A joint press release issued after the negotiations by the business organisations noted:

“We remain committed to working with government and unions to dealing with this in the necessary secondary legislation to implement the Bill. We must ensure that it supports opportunity for workers while avoiding damage to economic growth”.


We subscribe to that view, and I think the Minister gave her support to the nature of the consultation that will follow.

I will now move on to the unfair dismissal issue. As we heard, the government amendment in lieu creates a six-month qualifying period for workers’ rights. It also, crucially, removes the section that would have enabled secondary legislation to alter that qualifying period. That was good news. It will therefore come as no surprise that we welcome this compromise. It represents success for the tripartite discussions that led to its breakthrough, and all three parties should be commended for the good faith that they brought to that meeting.

The Bill’s previous position on day-one rights would have significantly held back the employment prospects of anyone who would have represented the slightest risk to an employer. This avoids that risk. As the British Chambers of Commerce, the Chartered Institute of Personnel and Development, the Confederation of British Industry, the Federation of Small Businesses, the Recruitment & Employment Confederation and Small Business Britain put it in their press release that heralded this deal:

“This agreement keeps a qualifying period that is simple, meaningful, and understood within existing legislation. It is crucial for business confidence to hire and to support employment, at the same time as protecting workers”.


That is a strong endorsement from the employment side for this part of the deal.

I feel sure that one factor that helped concentrate minds during negotiations was the need to meet a deadline. If the Bill does not gain Royal Assent by the end of the year, key benefits that we have discussed, and that many of us support, to be created by the Bill will not be enacted for workers across the country for a further year. I feel proud of those on our Benches who helped create the pressure and who held firm while that decision was in the making. I thank my Liberal Democrat colleagues for turning up, every time, to help the Government, alongside the other two parties, come to the compromise that we now have. It is a credit to this side of the House and the rest of the House.

I move to Motion B1, in the name of the noble Lord, Lord Sharpe. As well as containing good news on day-one rights, the government amendment in lieu contained a surprise, or a surprise to us. It is clear that removing the compensation cap for unfair dismissal has generated unease since the amendment was tabled. This is not something your Lordships have discussed. As we heard, it was discussed during the tripartite negotiations, but there has been some confusion. I suggest that the ambiguity of the word “lift” has contributed to this in no small measure: “lift” can mean both remove and increase, and I suspect there may have been some confusion.

Some employers, while welcoming the shift from day-one rights to a six-month qualifying period, have expressed concern about the possible implications of potentially unlimited financial exposure. Your Lordships should note that, as the Minister said, the average unfair dismissal award for the year 2023-24 was under £7,000, with a ceiling of more than £118,000. Clearly, the cap did not influence the awards being made. I asked the Minister to confirm—and she has—that the criteria that are used to set the award are not changed by the contents of this Bill. This being the case, it seems that the main beneficiaries of this change will be those who earn considerably more than the average wage in this country. It will be those who are paid more, but, in my anecdotal experience, the very highest paid rarely use employment tribunals; their deals are set in boardrooms, usually with NDAs. I genuinely do not believe that SMEs will be disadvantaged by this. However, I think we can all agree that the process was poor.

In my discussions with the Government, I pressed for a meaningful impact assessment. We have just heard the Minister confirm that there will be consultation and a meaningful impact assessment that will be published. This will be completed and published before the clause that lifts the cap is enacted, so if something really bad comes out of that IA then there will be time to act on it. After that, as the Minister noted, ongoing monitoring of the effects of these changes will be essential, and corrective action should and must be taken if negative trends emerge. In any case, I remain unconvinced that Motion B1 would provide the analytic value that we would get from a proper impact assessment. Even in the event that I was supporting the noble Lord, I do not think the route that he seeks to take is one that would be of benefit. It seems more symbolic than meaningful.

--- Later in debate ---

[Baroness Lloyd of Effra (Lab)]

I emphasise again that the Government’s convening of recent discussions and our willingness to compromise on the issue of unfair dismissal should signal to parliamentarians and stakeholders that we want to get this right. I emphasise that the Government’s work on this agenda is far from over. There will be opportunities for further debate and scrutiny, and I look forward to these discussions. I therefore hope that noble Lords will join business representatives and trade unions in supporting the position reached in recent discussions and backing the Government’s Motions today.

[Lord Fox (LD)]

My Lords, there was a moment when I was engulfed in shame that I had misunderstood the difference between median and average. Fortunately, the noble Lord, Lord Hendy, distracted your Lordships quite quickly, so I have recovered.

Nobody in this House is pretending that this is perfect. We are at a point of pragmatism and, I remind your Lordships, at the third round of ping-pong. The noble Lord, Lord Vaux, has made some important points. All of us go into this. If it was perfect, I would press Motion A1 and I would want to keep on iterating. I know that now is the time for this Bill to pass. Therefore, I beg leave to withdraw Motion A1.

Motion A1 (as an amendment to Motion A) withdrawn.

ExxonMobil: Mossmorran

Lord Fox Excerpts

Monday 24th November 2025 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My Lords, His Majesty’s Official Opposition’s thoughts are with the 450 workers at Exxon Mobil’s Fife plant, who now face losing their livelihoods. That plant had been a cornerstone of chemical production in the United Kingdom for 40 years. These are skilled people—proud people—and whole communities are now wondering what comes next. They deserve our sympathy, of course, but sympathy will not keep an industry alive. This closure was not unavoidable; it is happening because of this Government’s policies.

The chief executive of the Society of Chemical Industry, Sharon Todd, put it starkly:

“Without further government action to address high energy costs for industry, and a greater consideration of the importance of fossil carbon for material feedstocks, industrial resilience in the UK is undermined and further closures are increasingly likely”.


What a verdict—and it is one that the Government cannot pretend they have not heard. We on these Benches have warned Ministers repeatedly. Industry has warned them repeatedly. Everyone who actually makes things in this country has warned them repeatedly.

But the Government simply will not listen, and the price of this stubbornness is being paid by workers, manufacturers and communities up and down the country. ExxonMobil is not alone; we are seeing exactly the same story in steel. Everywhere you look, energy-intensive industries are struggling with the same crushing energy costs, and the pattern is not subtle. The Government’s energy policy is pulling in the opposite direction to its supposed number one priority of growth. You cannot claim to have a plan for growth while presiding over some of the highest electricity prices in Europe. It just does not add up.

Only a few weeks ago, the US ambassador to the UK, Warren Stephens, warned Ministers that high electricity prices are deterring investment from the world’s strongest economy and our closest ally historically. Then we have ExxonMobil’s UK chairman, Paul Greenwood, who said that the company had spent months warning the Government about the risks to the plant, only to be ignored. He said that

“these are deliberate Government policies that are undermining us”.

When global companies start talking like that, something is seriously wrong.

This closure lands at the same moment that Make UK published a report warning that surging energy costs and cumulative taxes are threatening the future of Britain’s industrial base. Ministers have no excuses left. These are the results of decisions made in Whitehall: a slow-motion sustained act of industrial self-harm. Even Unite and GMB—hardly allies of these Benches—warned Ministers that their ban on new oil and gas development would devastate supply chains and destroy skilled jobs. When both employers and unions are saying the same thing, it seems that only this Government could fail to hear it.

And what exactly has this achieved for the environment? Nothing, because now we simply import more oil and gas instead of producing it ourselves. Meanwhile, the Minister in the other place, the Secretary of State for Net Zero, posts on X claiming that bills remain high due to fossil fuel dependence, yet Ofgem has confirmed that policy costs are the major driver.

Minister can no longer hide from the consequences of their own decisions. We have major international investors describing the UK as “mismanaged” and “uninvestable”. South Africa’s richest woman called Britain a “scary country”, saying that she

“wouldn’t touch it with a barge pole”.

When global investors are talking about the UK in those terms, something has gone profoundly wrong.

As we said during the steel debate a few weeks ago, high energy costs and new unemployment burdens looming from the Employment Rights Bill, plus scatter-brained and ideological policies coming out of DESNZ, are all squeezing the life out of British industry. Will the Government reverse their ban on North Sea oil and gas? Will they stop pouring unaffordable subsidies into wind and solar while heavy industry collapses under the weight of energy costs, or are they determined to preside over a full-scale de-industrialisation? British workers, British industries and British communities deserve a lot better than this; they deserve a Government who listen, support industry and understand growth, and the Government are failing on all three counts.

[Lord Fox (LD)]

My Lords, this is quite clearly a blow for the area of Fife, and especially for the direct and indirect workers of the plant. Just as the noble Lord, Lord Sharpe, said, our thoughts go to them and their families as they seek to find ways of coming to terms with the blow.

The closure will see many highly qualified and specialised workers laid off at a time of severe cost of living pressures. The company has talked about supporting its employers and possible relocation available for some, but what about contractors and the wider supply chain? As far as I am aware, no task force has yet been set up to manage this, so can the Minister please update your Lordships’ House on how the wider workforce will be helped as this crisis bites? It is reported that only around 50 staff are being offered jobs, and nearly 500 miles away in Hampshire. Can the Minister confirm how many have actually agreed to relocate? What are the Government doing to protect and create highly skilled, high-quality jobs located for those who cannot move far from their homes, their communities and their wider family? More generally, much is made of the transition to net zero, which we wholeheartedly support, but there is a danger of the old jobs disappearing more quickly than the new ones are being created, and this mismatch will make growth very difficult, if not impossible.

There has, not unexpectedly, been some finger-pointing—indeed, we just saw some—trying to work out who is to blame for this. But we should understand that this plant has been in trouble and making a loss for five years. If economic and trading environments are causing the closure, both this Government and the last Government are culpable. But I also point to Brexit. All the products made at Mossmorran are exported to the EU. Can the Minister outline how much Brexit contributed to the plant’s demise? Given that there will no longer be these exports from the plant, what is the effect on our balance of trade?

This is, of course, a further blow for the Scottish economy and UK-wide manufacturing, and it comes fast on the heels of other company closures. The common denominator seems to be a combination of long-standing depressed demand alongside the policy environment—and the overwhelming issue, as noted by the noble Lord, Lord Sharpe, is the cost of energy. Energy was a problem when the noble Lord was in government and it remains a problem now. This is not to downplay today’s news confirming the £420 million a year committed to reduce electricity costs for the UK’s most energy-intensive industries—but that is jam tomorrow; it does not start until 2027.

There is a desperate need for further and more rapid intervention, as many UK chemicals operations face risk of closure before the British industrial competitiveness scheme, as it is called, comes into effect the year after next. There also remains considerable uncertainty about which businesses will benefit from this new support. Can the Minister fill us in on what the process will be for deciding which businesses and sectors qualify for this subsidy? What specific steps are the Government taking for the here and now? We understand what is happening in 2027, and we have seen the long look into the future that is called the industrial strategy, but what is happening now? We need to find a way of making sure that there is long-term investment in our manufacturing and chemicals industry.

The Scottish Government have a responsibility for the economy and jobs in Scotland, so why is there no meaningful mention of them in the Statement? Will the Minister outline what conversations were being had with the Scottish Government and when, and how the Minister sees the role of the Scottish Government going forward?

To conclude, energy-intensive industries are in decline across the UK. Every chemical business across the UK is paying more for its energy than competitors elsewhere, as was the case under the noble Lord, Lord Sharpe, as much as 400% higher than in America. Closures at Grangemouth, Prax Lindsey and now Mossmorran risk forcing downstream operators to import resources at higher cost. Britain’s once dominant chemical industry is continuing to suffer. The UK’s chemical output has reached its lowest level for a decade. The latest business survey of members of the Chemical Industries Association shows that 60% of chemical businesses report falling sales with a further 20% seeing no growth. More worryingly, many report strategic reviews.

Closures reduce our already dwindling industrial capacity and reduce our ability to deliver essential materials for our country’s critical national infrastructure, be it health, energy, food or defence. If the Government want to continue to have a chemical industry, then we need much more action to address these unsustainable costs.

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

I thank the noble Lords for their statements today, and I entirely agree that our thoughts are with the workers and the families of those affected by the closure.

While this Government inherited a precarious economic position from the previous Administration, it is imperative that we continue to move forward and pursue the right pro-innovation, pro-business policies which generate growth. We were disappointed to learn of Exxon’s announcement of the closure of its Fife ethylene plant. This follows months of engagement with the company and a commitment to explore all the opportunities to retain the site’s operations. However, it is my understanding that there was no credible buyer for the plant. Of course, if there are potential purchasers who wish to explore what is possible, the Government would be happy to work with them. We would be happy to find a solution, whether that is the ongoing operation of the plant or repurposing the site for new uses.

As noble Lords will know, the Government and ExxonMobil have been discussing the operating environment around the plant since April, and officials endeavoured to meet Exxon every week since August. Last weekend, Ministers from across government were in contact with the company to discuss this decision, and I expect there will be further conversations over the coming months. The Minister for Industry was clear that the Government are prepared to step in and support industry where it is feasible to do so, as we did with Harland & Wolff, Tata Steel and most recently British Steel. Sadly, in this instance, the Government are not able to provide support without a fundamentally sound business proposition. No intervention would represent value for money without one.

We know that it is a concerning time for those affected, which is why our focus is now on supporting the workforce. The Minister for Industry met Unite to explore options for supporting the affected employees, and Exxon is taking steps to mitigate the impact of its closure decision, as any responsible company would, with some employees being retained to support the decommissioning of the site and others being offered relocation and training packages to Exxon’s other assets at Fawley and Southampton. Discussions about the precise allocation of those roles are ongoing and I cannot confirm at this time exactly how many people have decided to make the transition to other sites. Regrettably, this falls short of supporting the entire workforce in finding new employment, which is why the Department for Work and Pensions is engaged in supporting those impacted. Officials in the department are also in contact with representatives from Fife Council and the Scottish Government and are working together on a task force to provide further support. Today, my right honourable friend the Secretary of State for Scotland met the Scottish Government and the Fife local authority to convene the first of those discussions and will continue with that task force over the coming months.

I stress that this closure is not representative of UK industry as a whole. Through our modern industrial strategy, we are channelling support to the eight growth sectors of the economy, including clean energy, defence and advanced manufacturing—all areas in which Scotland is incredibly strong. Far from being uninvestable, since July, we have seen more than £250 billion of investment committed into the UK, alongside 450,000 jobs. Only recently, we have seen further investment into AI growth zones and small modular reactors.

Both noble Lords talked about energy costs. Your Lordships know that bringing down energy costs for British businesses is a key part of our industrial strategy. Although it is important to note that electricity costs were not a major factor behind this site’s closure, we are pressing ahead with unprecedented support for our energy-intensive industries so that they can properly compete and win in the global economy. Last month, we pledged to increase the discount on electricity network charges from 60% to 90% for businesses in sectors such as steel, cement, glass and chemicals; this discount will slash costs for a whole host of businesses not just in England but across the UK. We know that around 550 of our most energy-intensive businesses will save up to £420 million a year on their electricity bills from next April thanks to this one change.

To that end, our new British industrial competitiveness scheme, announced for consultation today, will reduce electricity costs for more than 7,000 eligible manufacturing businesses. We want to save them up to £40 per megawatt hour, or up to 25%, from April 2027; that will cover the foundational and frontier areas, as defined in the industrial strategy. This will be subject to further consultation, as set out in the papers today.

On the point about engaging and working with the devolved Governments, the Scottish Government have been heavily involved in the ExxonMobil discussions, with meetings at the highest level. I thank my colleagues, both there and in the UK Government, who have been engaging on this issue for such a long time and trying to find a way forward. We will continue to work constructively together both to support the hard-working employees of the Fife plant and to ensure that they are fully supported over the coming weeks and months.

--- Later in debate ---

[Baroness Lloyd of Effra (Lab)]

Yes, I am quite happy to write as a follow-up. I think I said £250 billion, and I originally meant to say 45,000 jobs. I apologise; that was my error—but I can follow up on that point.

[Lord Fox (LD)]

Just to prolong the agony for slightly longer, when the Minister was answering the noble Lord’s question on oil and gas, she came up with a long list of very creditable investments and changes that are going on. When I was asking my question, I referred to the relative speed of creating jobs versus losing them. Does she accept that it is much easier and quicker to lose jobs than to create them? It is very important that this creative process keeps pace with the destruction process, otherwise we will lose even more skills than we are already.

[Baroness Lloyd of Effra (Lab)]

It is indeed very important that we continue to create jobs in highly productive, well-paid sectors, and that we provide the skills and training to a broad base of young and older people to take advantage of that. Whether that is through large, single-site companies or through the plethora of SMEs that can create jobs, it is important that we continue to focus on the productivity of our economy, so I agree with that point.

Employment Rights Bill

Lord Fox Excerpts

Consideration of Commons amendments and / or reasons
Monday 17th November 2025 Lords Chamber

Moved by

[Lord Fox]

Leave out from “House” to end and insert “do insist on its Amendment 1B.”

[Lord Fox (LD)]

I thank the Deputy Speaker for his expert guidance. Your Lordships could be excused for a sense of déjà vu, perhaps because we are back in your Lordships’ House with the same issues we discussed on 28 October. They remain unresolved and, indeed, not addressed in any meaningful way.

Since the last very similar session of ping-pong, I have had an engaging meeting with the Lords Ministers and their officials, and I thank them for that meeting. The prospect of that meeting gave me a sense of anticipation. I expected some sort of legislative rabbit to be pulled out of the Government’s hat at that point, but no—there was nothing. At first, I thought something substantive was being concealed for tactical reasons, perhaps ready to be flourished in some dramatic prestige at the moment that pleased the Ministers. But it has become increasingly clear that not only is there no rabbit in the care of the Benches opposite but there is actually no hat. If there is a hat, it exists elsewhere, and for that I have some sympathy for the Ministers opposite, because they sit bare-headed at the moment, with nothing to offer.

Time has passed, however, and, if the Government’s position has not changed, what has? Well, the business environment has got worse. September saw negative growth in GDP, per capita productivity fell in the last quarter and unemployment rose to 5% as recruitment cooled. Yet this ping-pong represents a doubling down—but for what? The Government’s manifesto vowed to “make work pay”, and we agree with that. None of these amendments confound this. My Motion A1 does not in any way dent the worker’s right to convert zero hours to guaranteed hours. What it does is streamline the administration of that right. I explained last time that Motion A1 merely avoids unnecessary work, helping SMEs that have limited administrative capacity to get on with focusing on growing their business and, hopefully, creating more jobs. But, in the absence of an amendment in lieu today, I will insist on this.

Moving on to the amendment of the noble Lord, Lord Sharpe—Motion C1—we have consistently raised concerns about seasonal work. I welcome the Minister’s careful description of the issues in the current legislation—the problem being, of course, that there is outstanding consultation and outstanding details that make it difficult. We are not 100% happy with the noble Lord’s drafting, but we feel that it is a starting point for further conversations of the nature the Minister just brought up. We will support Motion C1 if it is voted on. Sorting the impasse on these Motions and those in subsequent groups requires political gumption. In the end, I suppose it will be up to No. 10—I understand that it might be preoccupied with other issues at the moment.

I close with one last statistic, this time from the Work Foundation at Lancaster University. There are now 1.79 million people out of work and looking for a job. With economic inactivity stable at a staggering 21%, the number out of work appears to be rising not due to increasing inflow but rather due to limited outflow caused by difficulties in finding work. That is 1.79 million people. The Government did not address the arguments we put two weeks ago, and therefore they deserve the same response as last time. I beg to move Motion A1.

[Lord Leigh of Hurley (Con)]

My Lords, as the noble Lord, Lord Fox, said, here we are, back again.

In the ping-pong debate last time, the noble Baroness, Lady Lloyd of Effra, stated:

“The Government have engaged extensively with stakeholders on their make work pay reform since August 2024. A major part of this engagement has been to seek the varied views of SMEs. As of 15 October, we had engaged directly with more than 250 stakeholders. This included 139 businesses, of which 75 were SMEs. This approach to engagement will remain throughout the various consultations”.—[Official Report, 28/10/25; col. 1246.]

--- Later in debate ---

[Baroness Lloyd of Effra (Lab)]

Of course, we have had many discussions and there have been amendments during the passage of the Bill as a result of some of the consultation we have had with all social partners. We made amendments to the Bill on Report in respect of fire and rehire and the school support staff negotiating body—all sorts of changes or amendments have been made through the consultation process. We have also set out a clear plan for implementation, so that each milestone is there and there is a consultation before that, so that all businesses, large and small, can have the right amount of time to prepare and to get the guidance they need to implement these measures.

[Lord Fox (LD)]

My Lords, I thank the Minister for her response. I very much welcome the objective that she set out of reducing red tape. I remind her that the Bill contains 170 statutory instruments. In my experience, every statutory instrument leads to at least one regulation, so perhaps when next she stands up, she can commit to retiring at least one regulation, if not two, for each one that the statutory instruments bring in on the tail of the Bill, if indeed it ever becomes an Act.

The Minister also talked about a moral duty in respect of zero hours. I share that moral duty. Nothing in Motion A1 resiles from that moral duty, and on that basis, I would like to test the will of the House.

--- Later in debate ---

[Lord Vaux of Harrowden (CB)]

My Lords, I want to speak to Motion B1. Like, I think, many noble Lords, I start to become a bit uncomfortable when we have multiple rounds of ping-pong; and I generally hesitate to vote against the Government in more than one round, but I am expecting to make an exception in this case, for four main reasons.

First, I firmly believe that introducing day-one unfair dismissal rights will cause real and permanent harm to young people and others who are seen as higher-risk hires, such as those who have been on benefits for a long period, ex-offenders and people who have had long career breaks, perhaps because of parental or other caring obligations. When I say permanent, I mean that; if you are unemployed for a year, it becomes considerably more difficult to get on to that ladder and to make a success of your career. This is really important.

I am supported in that belief by every business group. The noble Lord, Lord Sharpe, has listed many such groups; I would add another: the Institute of Chartered Accountants in England and Wales, of which I am a member. There is the Resolution Foundation, the Tony Blair Institute, and perhaps most importantly, the Government’s own impact assessment, which is very clear on this. I would love to hear the Minister’s views on his own impact assessment—he has never actually addressed that point. None of the several Ministers in this place or the other place has made any coherent argument to the contrary. So I put the question very simply to the Minister: will restricting the reasons that may be used to dismiss someone during a probation period, and thereby opening up the risk of an employment tribunal from day one, make it more or less likely that an employer, especially a smaller employer, will take a risk on, or give a chance to, a young person with no experience? Is it more or less likely? It is very simple. I think most of us know the answer to that. Is he going to argue that his own impact assessment is wrong?

Secondly, this measure directly contradicts other government policy. The Government’s youth guarantee, something I am strongly in favour of, will offer every eligible young person who has been on universal credit for 18 months guaranteed paid work. To do that, you need employers who are willing to give them a job and to take that risk. Why would an employer do that if they can be taken to the employment tribunal from day one if the employment does not work out? It does not make sense.

Thirdly, despite, frankly, the clear harm that this will do, the Government have not provided any evidence that the change will create any material tangible benefits for workers. No evidence has been provided to show that the qualifying period is being abused or is causing actual harm. There is no evidence provided in the impact assessment; there is evidence that doing this will cause harm, but none about the harm we are trying to solve. No evidence has been provided in this or the other place.

The Resolution Foundation is also very clear: if we are going to harm the life chances of young people, which is what the Government confirm in their impact assessment, we must have real evidence that there is a genuine greater benefit, not just the usual statement that it cannot be right that someone can ever be dismissed for no reason.

Fourthly and finally, I want to look more closely at the claim that this is a manifesto commitment. It is in the manifesto, but it is part of a wider commitment that includes the explicit commitment:

“We will consult fully with businesses, workers, and civil society on how to put our plans into practice before legislation is passed”.


We have heard several times today that the Government will consult afterwards. They might argue that that is because the rules for the probationary period will be in a statutory instrument.

Let us unpick this light-touch probationary period the Government are talking about. The problem is that the Bill expressly and specifically sets out the reasons why someone can be dismissed from day one during that probationary period, meaning that it is not genuinely a probationary period. Under the Bill, it cannot become a light-touch probationary period; that is simply impossible, given the way the Bill is drafted. I would love to understand more about the light-touch probationary period because we have had no detail about what it really means. However, the employer is obligated by the Bill—the Act, should that come to pass—to give specific reasons which are limited by the Bill. It cannot be light-touch, so I would like to understand better what the Government mean by that.

There is a possible way forward, however, which is where I start, perhaps, to part company with the Opposition. It is because the Bill sets out that there have to be specific reasons for dismissal that is the problem—that is what allows the employment tribunal to get involved during a probationary period and all the rest of it. I wonder—I am thinking aloud—whether there is a solution to the problem by taking that element out.

For those reasons, I am inclined to support the Opposition on Motion B1. I urge the Minister to take this seriously. As the Resolution Foundation put it so well, let us not

“needlessly put employers off hiring”.

[Lord Fox (LD)]

My Lords, we have heard four very good speeches, and I do not intend to repeat them. I listened very carefully to the Minister and, unusually, I will read what he said in Hansard rather than just saying I will, because there was some interesting stuff there. I picked out the phrase, “We will not compromise on the fundamental principles of the Bill”. It would help if those could be set out because they are currently in the eye of the beholder.

The Minister also raised the notion that someone who had worked just less than two years should not be unfairly dismissed. The amendment of the noble Lord, Lord Sharpe, recognises that point fundamentally but there are 730 days between day one and two years. We do not have to go from 730 to one; there are stages. We may disagree on that.

The noble Lord, Lord Vaux, pulled out the issue of light-touch rules and the criteria for fair dismissal in the Bill. I have some problems with the noble Lord’s suggestion, because if it is not in primary legislation, it will come as secondary legislation. We all know that His Majesty’s loyal Opposition never kill secondary legislation—I am looking at them. We would like to from time to time because it should happen; there should be a sense of jeopardy in secondary legislation, which currently there is not. Without that sense of jeopardy, I am not happy with taking things out. However, if it is in primary legislation, the consultation is not worth anything because it is already there, so we might as well forget about that.

Trade Act 2021 (Power to Implement International Trade Agreements) (Extension to Expiry) Regulations 2025

Lord Fox Excerpts

Monday 10th November 2025 Grand Committee

I therefore have two questions to put to the Minister. First, what are the Government’s plans to undo some of the damage done to our phytosanitary standards and to farmers by the Australian trade deal? Secondly, what plans do the Government have to improve the level of democratic scrutiny over trade deals in the future?

[Lord Fox (LD)]

My Lords, on the point made by the noble Baroness, Lady Bennett, about not being obtuse, it is compulsory to be obtuse on this subject.

I again welcome the Minister to the Dispatch Box, with him having made a very accomplished maiden speech on the previous occasion which I boldly attempted to interrupt. This job may not have taken much selling to him by the Government, but I hope they told him, as I said to his predecessor, “What you’re really going to have to do is statutory instruments with a group of people who contracted Stockholm syndrome having been in the same room with the Conservative Front Bench literally for weeks”. I congratulate him and welcome him to his first statutory instrument on this.

As we have heard, the purpose here is to continue to extend the powers of the Trade Act 2021 beyond the end of the year. Why would you let a power lapse when you could keep it going? The answer I would infer is “just in case”. I am sure that no government would accidentally let go of powers, so that is perhaps the motivation. However, it is with these powers that the Executive partially exercise the royal prerogative which they use to maintain control over trade deals—what we sign, what they contain and how they are implemented.

Having happily spotted that the noble Lord, Lord Lansley, would speak, I did not prepare a whole bunch of detailed questions on this statutory instrument. I did, however, prepare a broader critique of the scrutiny process that exists for trade deals and their like.

As the noble and learned Lord, Lord Goldsmith KC, who chairs the International Agreements Committee, remarked in the front piece of a recent report on trade scrutiny,

“Treaties have the potential to raise matters of very great public importance”,


including trade agreements, but also other treaties such as the Rwanda treaty and the Chagos Islands agreement. He went on:

“Government has the power to negotiate and conclude treaties but it is important that Parliament can hold it to account effectively for its actions”.


That is where I am going to focus my speech; I am not going to challenge the validity of this statutory instrument, but I want to look at the scrutiny gap a little more, because it is a way of welcoming the Trade Minister to a really important matter. I hope that he will see the need for helping to improve Parliament’s grasp on what is happening.

When this statutory instrument was debated in the Commons, my friend the MP for Richmond Park—that is the Richmond in Surrey—Sarah Olney, gave the process a clinical demolition. She noted up front:

“The Liberal Democrats strongly opposed the Trade Act 2021, as it failed to provide sufficient parliamentary scrutiny of future trade agreements and risked weakening the UK’s high standards on health, food, labour and the environment”,—[Official Report, Commons, Second Delegated Legislation Committee, 4/11/25; col. 5.]


and we heard a little of that just now.

The then Bill passed through the House of Commons in 2020 without amendment, despite cross-party efforts to introduce greater transparency and accountability. I tabled quite a few amendments in the Lords, as did others, but Sarah tabled amendments requiring transparent investment courts for investor disputes. This was to ensure human rights considerations in trade negotiations and to mandate assessment of trade agreements. Those, along with other opposition amendments—such as protections for the NHS and food standards—were voted down by the then Government.

We believe that trade deals have been weaker without these imperatives. We warned that the omission could lead to deals that lower standards or allow foreign influence over our public services. Now, as then, we believe that the 2021 Act grants excessive powers to Ministers, excluding MPs and your Lordships from meaningful involvement. It also provides no guarantee that UK standards, public services or democratic accountability will be protected.

The Lib Dems are not unique in calling for greater scrutiny. The most recent report from your Lordships’ International Agreements Committee—the one on which the noble and learned Lord, Lord Goldsmith, commented —is entitled Treaty Scrutiny in Westminster: Addressing the Accountability Gap. The news release for the report states that it

“concludes that the current statutory process for parliamentary scrutiny of treaties under Part 2 of the Constitutional Reform and Governance Act 2010”—

or CRaG, as it is affectionately known by its devotees—

“is a weak and insufficient mechanism for securing meaningful accountability. The process has not changed significantly since the 1920s”.

Indeed, the Grimstone undertaking is about the most significant change that has happened since 1920. That is not hyperbole; it is a fact. Of course, in the 1920s, treaties had rather less impact on domestic affairs—they did not reach into public services or domestic standards in the way they do now—so we believe that too much discretion is given to the Government to act in ways that enable them to evade detailed scrutiny.

The news release further states that the report

“acknowledges that there is a balance to be struck between the flexibility the Government needs to negotiate and conclude treaties in the national interest and the transparency and scrutiny which the public interest requires. However, while the treaty scrutiny procedure codified in the 2010 Act”—

that is, CRaG—

“places some limits on the autonomy which the Government enjoys in international relations, the legislation tilts the balance too far in the Government’s favour. The report finds that the UK scrutiny process is weak in comparison with most other countries … The report concludes there is a powerful case for legislative reform and calls on the Government to engage seriously in a dialogue with Parliament … about this. Recognizing that legislative reform will take time, however, the report also recommends steps to make scrutiny under the current framework more effective provided the Government shows sufficient … will”.

I commend the report to the Minister; he should have a look at it because it is, obviously, very important to the portfolio that he now holds.

We Liberal Democrats will not vote against this draft statutory instrument, of course, but we will continue to call for reforms to ensure transparency and fairness in, and public scrutiny of, future trade policy. I look forward to the Minister’s reflections, as a newcomer, on trade policy and its scrutiny.

[Lord Hunt of Wirral (Con)]

My Lords, I join noble Lords in welcoming the Minister. I too participated in the debate on the steel industry, mentioned by the noble Lord, Lord Fox, where we had the benefit of two maiden speeches from the two new Ministers, the noble Baroness, Lady Lloyd, and the noble Lord, Lord Stockwood. Looking back, that was a really good, wide-ranging debate. I thought this would be a very narrow, rather simple statutory instrument to deal with, having looked at it—until my noble friend Lord Lansley got up. It may be that it applies only to continuity agreements, but thanks to the noble Baroness, Lady Bennett of Manor Castle, and the noble Lord, Lord Fox, we have entered a much wider debate. If I were the Minister, I would welcome that, because it gives him an opportunity to set the framework in the ways that my colleagues have outlined.

Having said all that, this instrument merely seeks to extend for a further five years the power under the Trade Act 2021. This power enables Ministers, including those in devolved Governments, to make regulations to implement the non-tariff provisions of continuity trade agreements with so-called partner countries—those that had agreements with the European Union before the UK’s exit. This instrument does not change the substance of the policy; it merely extends the time within which that power may be used from December 2025 to December 2030.

The rationale is that it will bring legal certainty and flexibility to implement existing and future agreements. I understood that it is particularly directed to those agreements under discussion with Switzerland and Turkey. I hope the Minister will be able to explain the context and answer the questions posed by my noble friend Lord Lansley. I would also like to know what has happened concerning the agreement under discussion with the Republic of Korea; the Minister may well be able to explain why he omitted to mention it.

Continuity and predictability in our trading relationships are indeed important for British businesses and exporters, particularly small and medium-sized operations. It is also sensible that the devolved Administrations can continue to use this power where matters fall within their competence. From paragraph 6.6 of the Explanatory Memorandum, on the legislative and legal context, I understood that the devolved Governments had been asked and were consulted on the power in Section 2(1). What happened in those consultations and what responses were received from the devolved Governments?

Then we have the whole question of parliamentary scrutiny of trade agreements, which has been raised in this debate. It would be very helpful if the Minister could give us some outline of what his approach will be and the approach of his department. I would also like to press him on several points of oversight and accountability.

First, the powers granted under Section 2(1) must always be exercised within the statutory protections set out in the Trade Act. I instance employment rights; environmental standards, already referred to; animal welfare; data protection; and the integrity of our publicly funded healthcare services. It would be really helpful if the Minister could give us assurances on those points. Secondly, I would like him to give us a little more context about how this five-year period has been calculated. It must be used wisely. The power was always intended to be a transitional mechanism following EU exit. From looking back at those debates, already referred to, it was never seen as a permanent feature of trade policy. We therefore expect the Department for Business and Trade to report in due course on how frequently the power has been used and whether a further extension beyond 2030 will genuinely be necessary.

--- Later in debate ---

[Lord Stockwood (Lab)]

I am very grateful to noble Lords for their generous welcome and continued acknowledgement of my novice status in quite a technical debate, alongside the comments and questions they have put to the Government. To reiterate, these regulations are crucial to the Government’s trade agenda. We anticipate that we will be required to domestically implement deals currently under negotiation that will greatly benefit UK consumers and businesses.

I turn to answer the questions raised in the debate, starting with the noble Lord, Lord Lansley, who asked about the necessity of the Trade Act powers in today’s legislative context, with regard to live negotiations. The question was whether the powers in the Trade Act are still necessary. The answer is that negotiations with partner countries are ongoing, and I would not like to pre-empt any future talks that may take place. The powers in Section 2 have been used for statutory instruments relating to procurement, but also for free trade agreement implementation—for example, the mutual recognition agreements—as well as for the Trade (Mobile Roaming) Regulations and the Chemicals (Health and Safety) Trade and Miscellaneous Amendments Regulations. We therefore believe that the ongoing management of our trade agreements justifies extending the power.

I should have said upfront, by the way, that if I do not go into enough detail I am happy to write rather beyond the narrow range of this debate. I look forward to having broader conversations outside the Room as well.

The second question was from the noble Baroness, Lady Bennett, about protections for phytosanitary standards in future trade agreements. During the passage of the Trade Act, my party worked hard to ensure the inclusion of robust safeguards in Section 2. These guardrails require that any regulations made under Section 2 must uphold existing UK statutory protections in key areas, including environmental protection. A full list of these guardrails can be found in Section 2(5) and 2(7). Preserving our world-class standards is a priority and we will not compromise on any of them for our trade policy.

A number of noble Lords raised a secondary question about future plans for democratic scrutiny of trade deals. We believe that the current statutory and non-statutory commitments governing the scrutiny of free trade agreements are robust and fitting for a country with our constitutional make-up. Our scrutiny arrangements are similar to and, in some areas, better than other Westminster-style systems, such as Australia, New Zealand and Canada, but our non-statutory commitments include, for new FTA negotiations, that the Government will undertake a public consultation or a call for input. Should a relevant Select Committee publish a report on these objectives and, should it request one, we will facilitate a debate, subject to parliamentary time.

Furthermore, during negotiations, the Government will publish regular updates and provide regular open briefings for all MPs and Peers. Post signature, the Government will—

[Lord Fox (LD)]

I am sorry—I can at least intervene at this point. The point that the Minister has made on a couple of occasions is not exactly right. The report that the International Agreements Committee put forward says that the idea that the way in which our democratic process is organised somehow means that countries that are like ours are the same as us is fundamentally not true. The evidence is laid out in the report that I mentioned in my speech. I ask the Minister to go and read it, and perhaps discuss it with his department.

On the subject of parliamentary time, without getting into too much detail on CRaG, the only way in which a trade deal can be delayed is by the Commons having a parliamentary debate, and the only way in which the Commons can have a parliamentary debate is by the Government granting them one. The evidence suggests that that does not happen, so it is a deeply flawed relief valve in the system and something that would, again, merit reconsideration.

[Lord Stockwood (Lab)]

I thank the noble Lord for his follow-up question. This Government are trying to go beyond the statutory requirements.

The noble Lord, Lord Fox, asked this question earlier: is CRaG inadequate in the modern context? I will go away and read the report so that I have a further written answer for him, but I come back to the idea that CRaG provides an effective and robust framework for the scrutiny of treaties that require ratification, including free trade agreements. Although it was formally legislated for in 2010 under the previous Labour Government, its origins date back more than 100 years. Under CRaG, the Government must lay relevant treaties before Parliament for 21 sitting days before it can ratify them. Parliament has the power to prevent ratification; in the case of the House of Commons, it can do so indefinitely.

In line with the Government’s commitment to transparency, we have gone well beyond the statutory requirements for CRaG and provided comprehensive information to Parliament to support its scrutiny of our trade policy approach. In addition, no trade agreement can in itself alter our domestic legislation, and any changes to our UK legislation that are required for trade agreements will need to be scrutinised and passed by Parliament in the usual way. However, I take the noble Lord’s comments on board; we will come back with a fuller answer.

On the noble Lord’s other points, which were about protections in trade agreements for human rights, animal welfare and the NHS, as I have said, preserving our world-class standards is a priority. We will not compromise them in our trade policy. Regulations 2, 5 and 7 contain safeguards in the areas mentioned by the noble Lord, Lord Fox; we will ensure that they are upheld. None of our FTAs, which are not covered by this power, has undermined our NHS or domestic standards. Parliament has debated this matter at length in its debates on the Australian FTA, the New Zealand FTA and our ascension to the CPTPP. Both required primary legislation.

The noble Lord, Lord Hunt, asked a question about devolution. DBT Ministers wrote to their counterparts in the devolved Governments on 11 August 2025 to inform them of our intention to lay this SI before Parliament. In keeping with our commitment to transparency, we also shared a draft version of the SI for comment. In addition, we committed to maintaining the safeguards around the Section 21 power, as laid down in the Trade Act 2021.

On the question about the use of this SI’s power, before laying the SI, the Government reviewed whether the circumstances were such that the power in Section 2(1) ought to be extended; this provided an opportunity for the power in Section 2(1) to be reviewed. It was HMG’s conclusion that an extension to the power would be necessary. It is possible that the power in Section 2(1) may be relied on to enable the effective domestic implementation of major forthcoming trade agreements with key partners, such as Switzerland and Turkey, but also for the ongoing maintenance of existing agreements.

[Lord Lansley (Con)]

The Minister has again referenced Switzerland and Turkey. Let us leave Switzerland to one side because there is a pretty comprehensive continuity agreement between the European Union and Switzerland, which we have replicated.

Where Turkey is concerned, I want to stick with the question of mutual recognition agreement on conformity assessments. As I understand it, the European Union’s agreement with Turkey does not include a mutual recognition agreement on conformity assessment, although the negotiations between the United Kingdom and Turkey around an extension of a free trade agreement in future might include such a thing; we do not have to decide whether it would or would not. If such an agreement were entered into with Turkey, that would create an agreement with Turkey beyond the scope of the agreement that constituted the continuity agreement because it would include something that was not in the original continuity agreement with the European Union. My question is, therefore, very simple. The Minister does not have to answer it now; he can take it away and have a think about it. If we were to agree with Turkey something that was not in the European Union-Turkey agreement and, hence, not in the continuity agreement that we signed way back in 2021, could it be implemented under the Trade Act 2021 or would that require additional primary legislation?

[Lord Fox (LD)]

We could extend the same question to the situation with Korea, where my understanding is that the current continuity agreement is being rolled over again prior to the negotiation of a new deal. Were a new Korea deal to be negotiated, the question would be the same as the one put by the noble Lord, Lord Lansley.

[Lord Stockwood (Lab)]

I thank noble Lords for those follow-up questions. I am reliably informed that both of those negotiations are under way at the moment, so I will come back with a full answer in writing, if that is okay. I am grateful for the support across the Committee for these draft regulations.

Steel Industry (Special Measures) Act 2025

Lord Fox Excerpts

Thursday 23rd October 2025 Lords Chamber

[Lord Fox (LD)]

My Lords, there may be far fewer of us here today than there were in April, but the concentration of steel expertise was raised accordingly. That caused me to have to reach back in my own experience to at least try to come up with something. I worked largely for the users of steel, but in my last corporate role I worked for a company that owned an electric arc furnace in the United States to produce powder metallurgy from used cars. Standing in front of an arc as the electricity goes into the crucible, you can viscerally feel that power that is used to melt scrap metal; it is quite an experience, and it puts in context what these much larger arcs must be doing.

I congratulate the noble Baroness, Lady Lloyd, on her maiden speech. There were moments later on when I felt like I was gatecrashing a reunion but, leaving that to one side, I look forward to her role going forward in your Lordships’ House.

I was also delighted to be on the Benches when my noble friend Lord Mohammed made his speech because he established a point at the beginning: of course there are mills and plants, and there are supply chains, but they all lead to communities, which lead to families and people. That is why I turn to the noble Lord, Lord Hannan, and say: yes, we must be careful about nostalgia, but we have to remember where this industry has come from, what it has meant and what we have to do to try to make sure that its people can come along with whatever the future strategy is. I was grateful that the noble Lord, Lord Mohammed, put us in that position.

We have this debate today because of the amendment that we pushed for during the original passing of the Bill, and I hope it will bring some scrutiny. To that end, I will probe quite a few of the issues, and I hope the noble Lord, Lord Stockwood, will have the chance to answer every one of my questions and to give his maiden speech. But, if he is unable to do so, I hope that the people sitting in the Box behind him will be able to respond in due course.

As we have heard, there is plenty to discuss and there are plenty of questions to ask. A lot has happened since that debate in April, but some things have not happened. The blast furnaces in Scunthorpe were not shut down, which is a very good thing, and we should applaud that process. Then, in July, the US President did not double tariffs to 50%; that left the UK at 25%—but, of course, subject to future whim as yet unknown. These days, that seems like a win, but given that less than a 10th of our steel exports are to the USA, it is very much less significant than what may or may not be happening with our relationship with the European Union.

As we have heard, the EU’s 50-50 proposal would be pretty devastating to half of the 80% of our exports that go there. This was announced in October and, as we have heard, it is subject to approval from member states, the Parliament and WTO negotiations. It would cut quotas from the UK into the EU by half and create a new 50% tariff applied to all imports above that slashed quota. That would leave tariff-free exports at 18.3 million tonnes for the UK—a 47% reduction from 2024.

I of course associate myself with the cry from the noble Lord, Lord Liddle, for us to join a customs union, but, leaving that to one side, I was interested when the Minister said that, in the event that such a thing happened, the Government would take any necessary action. I wonder what legal framework the Government will apply to take any such action. The EU has trade defence instruments, but we do not have the same instruments—we chose not to adopt those post Brexit. So our relationship with trade retaliation and the WTO, and our stated aim to maintain international law, is quite a compromised position. I would be interested to hear from the Government how such retaliation measures could be justified within international law.

Turning back to the US, can I ask whether the Government are still working on their stated aim of securing 0% US steel tariffs, which was paraded at one point during the various discussions? Nothing has surfaced. Is this now officially dead?

When we look at this sector—we have heard about the various elements—it really is a sad tale, in many senses, of a sector in decline: of a rescue and sale, and re-rescue and further decline, in a series of downward steps to leave us in the position we are in now, with a very small steel industry, as we have just heard. Essentially, all our steelmakers face a huge challenge, and most if not all are being propped up by the Government. In response to the suggestion of the noble Lord, Lord Hannan, that we kick those props down and see what happens, I think we know what would happen if the Government did not act as they are and had not acted as they did.

On the future ownership structure, we heard from the Government—from Jonathan Reynolds—that they would like a sector partner going forward. Yet with honourable exceptions such as Tata, past experience has shown that the sort of businesses willing to take on the mantle of a partner are often ones that fail to come up with the capital model or to do what needs to be done. That will be a challenge for our new Investment Minister, and it would be useful to understand how he and his department will go about finding that sector partner and where they might look.

All this begs a question that each of you in many ways has probed: what is the future purpose of steel in Britain, and what will the strategy seek to make happen to deliver that future shape? The Government closed their consultation more than six months ago but have yet to present any outputs relating to strategy. June’s industrial strategy and the corresponding August advanced manufacturing sector plan referenced steel as an important industry but committed only to a future steel strategy. That provides no certainty or clarity for a sector that desperately needs things to cling on to.

I think there is, on paper, a Steel Council. Can the Minister tell us how many times it has met, whether it has reviewed a draft of the steel strategy and whether it has approved the strategy? Where will the strategy be signed off: by the Secretary of State, the Prime Minister or the Treasury? More than that, when it is eventually launched, how will the strategy be implemented? It is in implementation of strategy that we find so many shortfalls.

With steel we have seen something interesting: there was necessary frenetic activity in the run-up to the Government stepping in. There were dramatic tales of actions taken under the cover of darkness, if not by Johnny Reynolds then by some of his colleagues, to secure the future of the blast furnace. That is great—but there has not been much of a narrative since then. What is actually happening?

Moving on, I have more questions. Where are the Government in their negotiations with Jingye? The Minister painted a slightly rosy picture of their relationship with Jingye, which I find interesting and perhaps hard to understand. In my understanding, Jingye is seeking many hundreds of millions of pounds in compensation for what the Government have done. Have they ruled out handing any public money to Jingye, or is it just a matter of how much and when? If they agree to pay it any money, where will that money come from? Will it come from the steel rescue plan or from a separate Treasury fund? That steel rescue money is already in demand. As we have heard, £500 million has gone to Tata towards the installation of the electric arc furnaces, but in Scunthorpe costs are being incurred too. As the Minister said, £270 million has been provided, ostensibly for working capital and things such as raw material. But there will be ongoing costs, and it would be helpful to understand, given that the £270 million is a downpayment, the likely monthly ongoing cost that will be drawing down from the steel fund.

Looking forward, having saved the furnaces, the Government need to determine how that can ever be cost effective. That really relates to much of what we have heard already. In September 2024, Jonathan Reynolds told the House of Commons that the Government’s preferred option was a transition plan in Scunthorpe to more electric arc furnaces. If they started now, we would not have an arc furnace there until 2030. How is the blast furnace to arc furnace transition in Scunthorpe ever to be financed, and indeed be financeable?

In the short term, internal markets have been identified for the product in Scunthorpe, but most of those markets are things that have not happened, are not happening and may happen some time into the future. The whole structure of the market for Scunthorpe is not there. Given that the cost of Chinese and other steel is substantially cheaper for most of the sort of steel that has been identified for Scunthorpe, again, how do the Government square the circle on costs while maintaining what they want to do?

I will not go into energy costs, because your Lordships have done it so well, except to say that there are ways of reducing the cost of electricity by delinking it from the cost of gas—our leader, Ed Davey, has been very clear and detailed on that. That would be a start for the industry.

The steel industry has stood as a great pillar of British industrial strength, but we have had historical decline, policy drift, mismanagement, bad commercial marriages and external market pressures, which have put us, frankly, at the point of near-extinction. Perhaps it is the best of all possible worlds, unless we understand what the optimal activity is and what the optimal scale for that activity is across the country. That is what we are waiting for in the strategy. We have to decide what we are going to do, and it certainly is not doing everything everywhere. I ask the Ministers to take on board the absolute necessity to be focused in what we do.

This is an important industry; it is one that we value, but one that we need to target and focus. It is quite clear that we cannot remain where we are now. We need to know where we are going—and very soon.

--- Later in debate ---

[The Minister of State, Department for Business and Trade and HM Treasury (Lord Stockwood) (Lab) (Maiden Speech)]

My Lords, I am pleased to respond for the Government and I am grateful to my noble friend Lady Lloyd for initiating this debate. Based on the comments, it seems I am the only one who has not worked with her in a previous life, so I look forward to working alongside her in both the Department for Business and Trade and this House over the coming months.

I begin by thanking my noble friends Lord Glasman and Lord Kennedy for the generous introduction to the House and recognising the warmth and generosity of spirit with which my fellow Members and staff have welcomed me. It is the greatest honour of my life to take my seat among you. Honour is the right word because I know that, from where I come from, there are very few people who get to sit with noble Lords. As was mentioned, I grew up in Grimsby, after the Cod Wars of the 1970s. It was an industrial town like so many others and, as happened to so much in that generation, globalisation and international politics created unforeseen consequences for the town that I love.

My mum and my grandmother raised me and my three brothers alone. It is a strange synchronicity that she passed three years ago and it is her birthday today, which I only found out when my brother texted me this morning. Growing up, I never knew my dad. We grew up in a council house and, while we did not go hungry, there was a constant stream of red late-payment reminders coming through our letterbox. I remember often feeling cold and seeing frost on the inside of our windows in winter—in fact, I am still paranoid about the thermostat in my own home today, which drives my family mental.

Knowing what I know now, I realise these circumstances do not often lead to prosperity, yet here I am among noble Lords in the House of Lords. If noble Lords will indulge me briefly, I think it is important for me to pay tribute to the support that got me here today: my mother and grandmother, who in challenging circumstances always did their best for us; my three brothers, for keeping me grounded and connected to the town that I love; my wife and children for their love, laughter and security, which allowed me to go out in the world and be myself; importantly, the innumerable people who took a chance on me and backed me to succeed; and, finally, our welfare state, without which I would not be on this earth, let alone in this House.

It is because of those people and institutions—and, let us be honest, a little bit of luck as well—I was able to succeed in business, taking my life and career from the docks in Grimsby to call centres, eventually to the world of entrepreneurship, and even today I own a stake in my boyhood club, Grimsby Town FC. Incidentally, it gave me the previous greatest honour of my life when we beat Manchester United, which the noble Lord, Lord Rook, mentioned—I know the noble Lord, Lord Lamont, a fellow Grimsby Town fan, will appreciate that.

It is very fitting for me personally to be giving my maiden speech in a debate about steel. Just half an hour away from Grimsby lies Scunthorpe—our great football rivals, not least because of our similarities. We are both industrial towns but, while Grimsby’s economy struggled for decades to weather the shift in geopolitics and trade dynamics, Scunthorpe has a chance now to succeed, thanks to this Government’s intervention—not only Scunthorpe, but the region, which, thanks to the incredible work being done locally, is poised to capitalise on the opportunity of the clean-energy transition and the investment and good jobs that this transition will create. I understand our accomplishments are not a cure-all. There is still much work to do to ensure a bright future for our steel industry, but had we not undertaken those steps six months ago, the road ahead would look very different.

I had the privilege to be in the room in Scunthorpe with friends and the PM on the day the announcement was made, and the community was given a lifeline and a chance to begin their own renewal. If the people of those steel towns need hope for the future, they should look no further than Grimsby, which has begun its own renewal, at the centre of the nation’s offshore wind industry, which is bringing in good, well-paying jobs and raising living standards in the town. If there is one lesson from Grimsby’s renewal, it is this: progress is possible, but only when people come together, shoulder to shoulder, to play their part.

Before I come on to the comments about the steel industry in this debate, it would be remiss of me in my new role as Minister for Investment not to respond to the comments from the noble Lord, Lord Hunt, about disincentivising foreign direct investment. The recent evidence demonstrates that, even in the eight weeks I have been in the role, the UK investment environment is thriving. We are committed to a 10-year industrial strategy as a party. As an entrepreneur, I believe that we are in a situation for turnaround. We have a clear plan, we recognise the problem and now we need to execute. I am happy to have a follow-up conversation with the noble Lord on that matter, but it would be remiss of me not to mention that before I start.

I now turn to some specific points made in the debate. I want to start by recognising all the personal connections in the comments of those who spoke, particularly the noble Lords, Lord Mohammed and Lord Prior, and the noble Baroness, Lady Bloomfield, whose parents worked in the industry. As this is my first time addressing this House, I trust noble Lords will forgive me for oversights or questions unanswered. I appreciate the noble Lords, Lord Fox and Lord Sharpe, giving me the opportunity to reply to detailed questions in writing, which I will take them up on, so thank you for that.

As for when the steel strategy is coming, and the delay to the September steel council, raised by the noble Baronesses, Lady Hunter and Lady Smith, the noble Lords, Lord Hunt, Lord Mohammed, Lord Bilimoria, Lord Liddle and Lord Prior, and the noble Viscount, Lord Eccles, the Government are very clear that there is a future for steel-making in this country. That is why we intervened in April to keep Scunthorpe’s blast furnaces lit. The company is now hard at work to secure the future of British Steel.

This will not be without its challenges. Noble Lords will recall that Jingye acquired British Steel in 2010 at a time when the business was already in distress. Since then, it has faced persistent difficulty in market conditions, and regrettably, the company has not yet succeeded in returning the business to profitability. I support the comments recognising the incredible work of the management in this intervening and difficult period.

The support for British Steel has been mentioned. Although no long-term decisions have been made and taken in respect of the Scunthorpe site, I reassure the House that discussions with the owner are ongoing, and our policy and strategy work continues at pace to develop the optimal approach. This Government remain steadfast in their commitment to economic growth in north Lincolnshire.

For the avoidance of doubt, British Steel belongs to Jingye. The actions taken by His Majesty’s Government to date, including under those provisions of the special measures Act, do not constitute nationalisation. Rather, they represent a temporary, targeted intervention, designed to ensure the uninterrupted production of British steel.

That said, we have been very clear that securing the long-term future of steel-making in Scunthorpe will require significant investment. Such investment will support modernisation and decarbonisation, protect skilled jobs and safeguard the interests of the taxpayer.

On the question raised by the noble Lords, Lord Hunt and Lord Mohammed, on the sunset clause and the future of the special measures Act, noble Lords will recall that during the emergency debates on the special measures Bill, there were calls for a sunset clause in the proposed legislation to limit the duration of the Government’s powers to intervene in the steel industry. I recognise the ongoing desire for clarity regarding the future of the Steel Industry (Special Measures) Act.

As promised, the Government have been updating both Houses regularly on the powers in the Act and how they are being used. I further assure the House that once directions to British Steel are terminated, we will update Parliament on the repeal of the special measures Act.

On Tata Steel, raised by the noble Lords, Lord Hunt, Lord Bilimoria and Lord Murphy, and the noble Baronesses, Lady Bloomfield and Lady Smith, the decision to close the blast furnaces at Port Talbot was a commercial one, taken by Tata Steel in January 2024 under the previous Conservative Administration. By the time this Government took office, the process was already well advanced. Noble Lords will be aware that the first furnace ceased operations in June 2024 and the second followed in September.

However, we negotiated an improved deal with Tata after just 10 weeks in office, with better support and protections for workers, including the most generous voluntary redundancy package Tata has ever offered. We have since fully allocated the UK Government’s £80 million contribution to the Tata Steel/Port Talbot Transition Board to help people learn new skills, support the supply chain and protect people’s mental health. That this funding has been delivered in under a year is a testament to this Government’s commitment to the community impacted by Tata Steel’s UK transition to greener steel-making.

The electric arc furnace’s groundbreaking in July and the start of the work on the new pickle line in September are pivotal milestones demonstrating practical delivery of this complex project. These developments not only secure the future of steel production in Port Talbot but position the UK at the forefront of sustainable industrial transformation. At this point I would like to recognise the noble Baroness, Lady Smith, for her passion about her community and for her questions, which I deeply appreciate.

The topic of industrial energy prices came up often, raised by the noble Lords, Lord Hunt, Lord Mohammed, Lord Bilimoria, Lord Murphy and Lord Hannan. Since the 2010s, these prices have risen by more than 50% in the UK. Today, UK industrial energy costs are approximately 30% higher than those in Germany, 50% higher than those in France and more than four times those of the most competitive states in the United States.

Energy-intensive industries, including foundational sectors such as steel and metals production in Port Talbot and Scunthorpe, and vital industries such as glass, cement, steel and chemicals, are the backbone of our manufacturing economy. Due to their high-grade electricity usage, these sectors are particularly sensitive to increases in electricity prices. They employ around 400,000 workers and contributed £30 billion in gross added value in 2019, representing 1.5% of our national economy.

These businesses are indispensable to maintaining a resilient manufacturing base across the UK, which is why the Government provide relief to over 500 companies in these industries, supporting them with increasing industrial electricity prices due to the increased renewable policy costs. We do this through two key mechanisms: the British industry supercharger and the EII compensation scheme. These programmes ensure that our energy policy does not deter investment or production in the United Kingdom. They keep electricity prices competitive compared with international competitors and ensure that thousands of British jobs are safeguarded.

As part of our modern industrial strategy—

[Lord Fox (LD)]

My Lords—

[Lord Stockwood (Lab)]

I am aware that there are many questions; I guarantee that we will respond to them in full in writing.

As part of our modern industrial strategy, the Government have proposed deepening the support provided by our British industry supercharger by increasing the level of network charging compensation from 60% to 90% by 2026. We have consulted on this proposal and will respond in more detail in due course. This Government remain steadfast in their commitment to ensure that our energy-intensive industries are not disadvantaged by our transition to net zero. We will continue to support these sectors, which are vital not only to our economy but to our national resilience and prosperity.

I turn to the questions about global excess capacity and market-distorting practices by China, raised by the noble Lords, Lord Hunt, Lord Mohammed, Lord Bilimoria and Lord Liddle. As my noble friend Lady Lloyd of Effra set out in her remarks, we are calling out the practice of some countries that are choosing to flood the market with cheap steel in a bid to quash healthy competition. She joined Ministers from partner countries at the global forum on steel excess capacity in South Africa earlier this month, and the UK has lobbied hard to develop a comprehensive framework for joint action to redress global steel excess capacity by June of next year. The noble Lord, Lord Hunt, asked specifically about discussions with the WTO, and the UK regularly challenges China’s market-distorting practices during bilateral meetings, at the WTO’s subsidies committee and in other settings.

I turn to the topic of EU and US tariffs, raised by the noble Lords, Lord Bilimoria, Lord Murphy and Lord Liddle. The Government want to do everything they can to mitigate the impacts of tariffs raised by international partners. The UK will always defend its critical steel industry where required, and we will continue to explore stronger trade measures to protect UK steel producers from unfair behaviours.

On the recent announcement by the EU on proposed new steel trade measures on imports to replace the current steel safeguard, we are in close contact with the European Commission to understand the details of this proposal. This decision was not targeted to the UK but would be highly concerning for many steel producers and their workers, so we have been meeting with the steel industry to understand its impacts. As ever, this Government are committed to defending our critical steel industry.

Moreover, thanks to the strength of the UK-US partnership, the UK remains the only country to benefit from a preferential 25% tariff on steel and aluminium on all our exports to the US, avoiding the global tariff of 50%. That has reinforced the UK’s position as a trusted source of high-quality steel and aluminium. We have already committed up to £2.5 billion of investment, including through the National Wealth Fund, to rebuild the steel industry and continue to explore stronger trade measures to protect UK steel producers.

The UK has a robust trade defence system in place, including the UK’s existing steel safeguard measures. While the UK steel safeguard will expire in June 2026, in line with the WTO rules, we held a call for evidence from 26 June to 7 August to gather stakeholder views on the future policy options, and we are keeping all options under review to defend our critical industry. As set out in the trade strategy, the international trading landscape has rapidly changed, and we are sharpening our toolkit to respond to these increased threats.

To some of the points that the noble Lord, Lord Fox, made—I will have to write to him personally on many of them—I concur with his views on the fact that our families and communities should be at the heart of this debate. I remind the House that at present there are proposals and that we will not be drawn on the UK’s response to EU tariffs, but we will continue to take a cool-headed approach.

The UK Steel Council has met on three occasions, in January, April and July, and the next meeting is scheduled for 4 November.

On the question of our relationship with Jingye, the Government are engaged in a constructive dialogue with Jingye, in line with our commitment to a pragmatic commercial solution.

In closing, I just want to reiterate my thanks to all noble Lords who spoke in today’s debate. I want to convey my appreciation for their valuable contribution of insights and thank them for their generosity in allowing me to give written responses to many of the questions, particularly those asked at the end. I guarantee that we will provide written answers to anything I have missed.

My noble friend Lady Lloyd and I have set out the Government’s long-term vision for a strong, resilient, productive steel industry in this country that is primed for long-term success, driving growth in the communities that depend on our steel industry and help build it—the same communities that I spoke about in my opening remarks. The Government want them to feel and see the benefits of our plan for change and the decade of national renewal that we promised, and I look forward to working with noble Lords in that ambition.

Sanitary and Phytosanitary Measures

Lord Fox Excerpts

Thursday 4th September 2025 Lords Chamber

[Baroness Jones of Whitchurch (Lab)]

My Lords, as I say, we see huge advantages to our reset with our European partners. The fact is that UK agri-food trade with the EU has, since 2018 to 2024, fallen by 21% for exports and 7% for imports. It is important that we re-establish those relationships so that our own trade can benefit from the new opportunities that we will have with the reset arrangements following that common understanding with the EU.

[Lord Fox (LD)]

My Lords, I think we are all grateful to the noble Viscount for causing the Minister to put her trade hat on. It is good to discuss trade. The Financial Times recently reported an influx of Australian steak, which is undercutting British beef. Does the Minister agree with what the Liberal Democrats said at the time: that the Australian FTA, which was made in haste by the Conservative Government of the time, sells out British farmers? What will her Government do to try to protect them from this problem?

[Baroness Jones of Whitchurch (Lab)]

My Lords, we remain committed to our high agriculture and food standards. As the Trade and Agriculture Commission report has confirmed, all food and drink products imported into the UK will still have to meet our existing import, food safety and biosecurity requirements. We have not lowered our standards to join the CPTPP. For example, hormone-treated beef and ractopamine—I knew I would fall when attempting to pronounce that—pork remain banned in the UK, as will other products affected by pesticides. We will maintain our existing food standards.

Employment Rights Bill

Lord Fox Excerpts

3rd reading
Wednesday 3rd September 2025 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My Lords, I also express my gratitude to noble Lords on all sides of the House for their excellent contributions throughout our deliberations on this Bill. Their expertise, knowledge and careful scrutiny have been invaluable. I also thank the Ministers for the briefings and meetings, and indeed for the extensive correspondence by letter, that they provided during the course of these proceedings. I also thank the Bill team and the Ministers’ private offices. Further, I place on record my thanks to the Public Bill Office for its diligent work on amendments and to all the staff in your Lordships’ House who, as the Minister said, enabled our debates to continue sometimes late into the night with such professionalism. I also extend my thanks to our researchers on these Benches, Abid and Henry, who have been fantastic throughout.

We take a slightly different view as to the Bill. We think it is a terrible Bill. It is terrible for workers, businesses—particularly small businesses—and the economy as a whole. There is no support from anywhere in the business community for this legislation. The Office for Budget Responsibility has made it clear that the worst is yet to come. Unemployment has risen every single month under this Government. The latest figures show that the rate is now set to reach 5%, which is the highest since the pandemic. That is not a blip—it is a trend. It is the direct result of misguided economic choices, and if this Bill proceeds, the situation will only deteriorate further.

The Chancellor has deepened the difficulties. Long-term borrowing costs have surged to their highest levels since 1998, undermining stability and confidence. The spending plans are incoherent; when set alongside the provisions of this Bill, the picture is nothing short of a looming economic disaster.

The Bill imposes nothing new except new costs and burdens on business. A recent survey conducted by Peninsula, the UK’s largest HR and employment law consultancy, revealed that 68% of respondents believe that this legislation will have a negative impact on business. More than half expressed concern about the increased likelihood of tribunal claims—an inevitability under these provisions, with so-called day one rights and the ill-thought-out restrictions on workplace culture. Even the Government’s own impact assessment confirms those risks.

The noble Lord, Lord Katz, confirmed by letter that the Government are funding provision for some 33,900 tribunal sitting days, yet the backlog already exceeds 50,000 cases. It does not take a genius to calculate that it would take a year and a half simply to clear the existing caseload before even beginning to address the new claims that will inevitably arise as a result of this legislation. Indeed, the Government’s own impact assessment accepts that the introduction of the so-called day one dismissal rights will increase claims by around 15%. So, while I commend the Government’s actions in recruiting new judges, the Bill still piles more pressure on to a system that is already creaking, creating delay and uncertainty for employers and employees alike. My noble friend Lord Young of Acton tells me that the Free Speech Union has a belief discrimination case before the employment tribunal that has been given a hearing date of July 2027.

One cannot help but observe that the Bill appears designed less to support workers or employers and more to resuscitate the relevance of trade unions. We have already seen the damaging consequences of the Government’s approach in the handling of the junior doctors’ dispute. By also reducing the threshold for workplace recognition to potentially as little as 2%, they are preparing the ground for a surge in unionisation, leaving small businesses, many of which have no experience of dealing with unions, completely unprepared.

We should be mindful of the darker history that accompanies union power. In the 1970s and 1980s, communities were torn apart by the toxic culture of so-called scabbing. Workers who chose, for reasons of conscience or necessity, to cross a picket line were branded as traitors and subjected to intimidation and ostracism. That tyranny of the minority silenced individual choice and left lasting scars on families, workplaces and entire towns. It is precisely that environment which this Bill risks rekindling, where the decision of a small fraction can dictate the livelihoods of the many and where those who simply wish to work are punished for it. One can only admire the courage of the union barons opposite for their own act of scabbing today in crossing the PCS picket line to be here.

At the same time, the Government’s own impact assessment is clear that the central economic challenge is productivity, yet what Ministers fail to acknowledge is that poor productivity is overwhelmingly found in the public sector, where entrenched union practices have eroded efficiency and soured industrial relations. Instead of addressing that, the Government now seek to import those very problems into the private sector through this legislation. That will undermine competitiveness, discourage investment and damage growth.

The Bill also takes a regressive step with regard to political funds. The Government propose that contributions to a union’s political fund should once again be made on an opt-out basis rather than an opt-in. This undermines the principle of genuine consent. It also raises serious questions of accountability and transparency. I note that the certification officer requires unions to disclose payments above a de minimis threshold of £2,000, and that many unions are already making only two or three such payments a year. Those transactions, one assumes, are recorded in their internal accounts, so it should be no more than a simple matter of cut and paste to include them in the statutory return. Why, then, was this described by the Minister in her exchange with my noble friend Lord Leigh of Hurley as a “notable administrative requirement”? Is this to be the His Majesty’s Government’s standard position on disclosure requirements for other organisations in future?

Reference has been made to practices prior to 2016, when opacity prevailed. Yet rather than strengthening transparency, the Government seem intent on encouraging concealment. That is an approach that stands in stark contrast to the regime applied to companies, which must provide full disclosure of political donations. Ministers argue that members can access the information through the usual democratic means of a voluntary organisation, but there is in truth no such process. There is no requirement for unions to provide this information to their members at all. If the Government are serious about transparency, they should be insisting on openness, not enabling the reverse.

I feel that I should also inform the House that, for reasons best known to itself, an organisation called the General Federation of Trades Unions has invited me to various events at the Trades Union Congress conference. The programme contains, among other things, a session on what is described as “Employment Rights Bill #2”. Some might say that such a Bill would administer the coup de grâce after the firing squad of this Bill. It also features a session entitled, “¡Viva La Solidaridad! Stand with Latin America Against Trump”. I confess that I laughed when I read that. That is not serious politics; that is infantile and pathetic. If the TUC truly wished to offer international lessons, it might instead examine the havoc that socialist leaders and their trade union counterparts have wreaked on Latin American economies, particularly where solidarity has too often meant shared poverty, collapsing currencies and vanishing investment. We on these Benches are rightly focused on the future of British businesses and their employees, and the TUC should do the same.

I would also like to highlight Clause 30, concerning the right to be accompanied, which was tabled by the noble Lord, Lord Palmer of Childs Hill.

[Lord Fox (LD)]

The noble Lord, Lord Sharpe, has reminded me of what I have been missing while I was in a hospital bed in agony. Can I remind him that the Companion says:

“Any remarks should be brief and should not … reopen debates at previous stages of the bill”?

[Lord Sharpe of Epsom (Con)]

I am delighted that the noble Lord, Lord Fox, is back in his place. It is always a pleasure to be on the receiving end of his wit and repartee. He will be very pleased to know that I am winding up. Also, I am complimenting one of his colleagues—he ought to have waited.

Clause 30, tabled by the noble Lord, Lord Palmer of Childs Hill, was agreed on Report with cross-party support. Like other noble Lords across the House, we urge the Government to keep this provision in the Bill. It offers greater choice and protection for workers. To remove it would be a backward step that would disproportionately harm vulnerable groups, including disabled workers, young people and members of some ethnic minorities. That would be anti employment rights. I trust that Ministers will not seek to undo it.

For all its faults, I am glad that we have been able to make some improvements to this Bill as it leaves your Lordships’ House: retaining the 50% threshold for strike ballots to protect workplace democracy; introducing a right to request guaranteed hours; and ensuring clarity by setting out a clear probationary period and reference period for workplace dismissals, giving employers the certainty that they need. We hope that the Government will consider these amendments carefully in the other place and even take this opportunity to rethink the entirety of the Bill.

Employment Rights Bill

Lord Fox Excerpts

Committee stage
Monday 19th May 2025 Lords Chamber

[Lord Lucas (Con)]

My Lords, I very much agree with the noble Lord, Lord Cromwell. That a Lucas can agree with a Cromwell demonstrates the healing power of time—it has taken only 400 years.

I support the amendments in this group, particularly Amendment 101. I very much like the amendment from the noble Baroness, Lady Chakrabarti, because it would draw in what happened to my friend who went through the NDA process. I like Amendment 147 because, as the noble Lord, Lord Cromwell, said, this should all be about producing better behaviour. You want an incidence of bad behaviour to lead to better behaviour, not to disguise and cover-up. That ought to be the fundamental drive of the process.

To add a couple of sidelights, I am told it is very much current employment practice to ask, when taking a reference from a previous employer, whether an NDA has been signed. If the answer is yes, you take that employment no further—so NDAs can be really damaging things to sign. It is therefore important that someone signing one has achieved the fully informed consent that the noble Baroness, Lady Kennedy of The Shaws, referred to.

Another aspect of obscurity is in tribunal awards. I note, for instance, that tribunal awards that really criticise what has gone on in a school remain private. They never get sent to Ofsted. We ought to be using that tribunal process and what it has discovered to produce change. Where these things cannot be made public, as is often the case, they ought none the less to get into the system in a way which encourages better behaviour in future.

[Lord Fox (LD)]

My Lords, this has been an important debate. As the noble Baroness, Lady Goudie, said—I apologise if I have mispronounced her name—most if not all speakers have worked on these two important and connected issues for years. That has been reflected in the quality of the speeches we have heard. It also reflects the fact that progress has not been made. We need to make progress here.

The traditional approach from Ministers in situations such as this is to say, “These are important issues and we agree something needs to be done”, and then either “We need more consultation”, as my noble friend pointed out, or “This is not the right vehicle for these issues”. Those are the two excuses that will be given. The point on consultation has been well made by my noble friend and the noble Lord, Lord Cromwell. As for whether this is an appropriate vehicle, just look at this Bill. It is well over 300 pages and covers almost every aspect of employment. To say there is no room in this Bill—I am pre-empting what may or may not be said—would be wrong. There is more than enough space in this Bill to cover these issues.

As the noble Baroness, Lady Morrissey, said, this was debated in the Commons and my honourable friend Layla Moran also had an amendment on this issue, but the Bill came here without it. The safe way of making sure that this can survive contact with a very large majority at the other end is for the Minister to take this on and put it in the Bill on the Government’s behalf. We have heard a lot of excellent speeches from the Minister’s own Benches, as well as across the Floor. Clearly, we can all agree on both these issues. The Minister should stand up and say “We will take this on, work with all interested parties and produce two amendments for both of these issues” to address what has clearly been going on for too long without being resolved in legislation.

[Lord Sharpe of Epsom (Con)]

My Lords, I agree that this has been an extremely interesting debate. I thank all noble Baronesses—they are mostly Baronesses, with some noble Lords—for their contributions. In particular, the noble Baroness, Lady Kramer, deserves singling out for her very thought-provoking introduction to this group.

As my noble friend Lord Hunt of Wirral pointed out in the previous group, every individual should feel safe and supported in their working environment. We recognise that NDAs have deviated from their original purpose, which was to protect trade secrets and intellectual property, as the noble Baronesses, Lady Kennedy of The Shaws and Lady Goudie, pointed out. They have been abused in some circumstances, particularly where they are used to silence the victims of misconduct, which includes sexual harassment.

However, we must also acknowledge there are some cases where NDAs may serve a legitimate purpose. Some individuals may wish to resolve disputes privately, without the need for public disclosure. It is important, therefore, that we do not take a blanket approach but instead consider the context in which NDAs are being used. Many of the amendments acknowledge those simple facts. Having said that, we also need to consider the wider impact that NDAs might have—for example, in cases of medical malpractice. How can society and the medical profession learn from mistakes that are not made public?

It is clear that further scrutiny of NDAs is essential. The potential for abuse cannot be ignored, and we must ensure that any agreement entered into is fully informed and entirely voluntary. I will briefly speak as a non-lawyer, because I was particularly taken by Amendment 281, in the name of the noble Baroness, Lady Chakrabarti. Like the noble Lord, Lord Cromwell, I was rather shocked that such an NDA might exist even under the current regime. How can one sign a legally binding document that prevents the disclosure of a breach of the law? With apologies to my noble friend Lord Hunt of Wirral, I say that only the legal profession could manage the perverse logic to invent such a thing.

As we have seen, particularly in the NHS, whistle-blowers are often the individuals who bravely speak out against wrongdoing, misconduct or unethical practices that might otherwise go unnoticed. Their courage in raising concerns is critical to maintaining trust and ensuring that the organisation remains committed to the highest ethical standards.

Both noble Baronesses, Lady Kramer and Baroness Jones of Moulsecoomb, referred to the NHS. I looked into this earlier, and in one high-profile case, the NHS spent over £4 million on legal action against a single whistleblower, including a £3.2 million compensation settlement. This sparked criticism from Professor Phil Banfield, the chairman of the British Medical Association, who argued that whistleblowing is often not welcomed by NHS management. He emphasised that NHS trusts and senior managers are more focused on protecting their reputations than addressing the concerns of whistleblowers or prioritising patient safety. That is clearly a very unacceptable state of affairs, and that example alone suggests that the Government should take these amendments extremely seriously.

I am sure that the Minister is about to stand up and offer to have further discussions on this subject. We will pre-empt her and volunteer to take part in those discussions. There is clearly much more work to be done in this area. I look forward to hearing the Minister’s remarks.

Employment Rights Bill

Lord Fox Excerpts

Committee stage
Monday 19th May 2025 Lords Chamber

[Baroness Carberry of Muswell Hill (Lab)]

My Lords, I did not want to interrupt the noble Baroness when she was speaking. However, I refer her to Section 26 of the Equality Act 2010, with which I am sure she is familiar, as an EHRC commissioner. That is where the relevant test is set out.

[Lord Fox (LD)]

My Lords, this has been an interesting debate. It is difficult to know where to start, so I thought I would do so with a couple of parish notes. To the noble Baroness, Lady Noakes, I say that the young man who was on the other end of her call was required by contract to read out a script. If he had deviated from the script, he would have been dismissed. The noble Baroness was not guilty of harassment, but of a lack of empathy concerning his contract. To the noble Baroness, Lady Deech, I can report that hummus is for sale in the Co-op in Bow. Indeed, following the cyberattack, that was about all it had for sale. To the noble Lord, Lord Londesborough, I say that were he taken to court in the circumstances he describes—though I think that unlikely—for being grumpy in a football ground, all he would have to do was say where he was, and the judge would let him off on mitigating circumstances.

When the noble Lord, Lord Young, was announced as a peer I was very pleased, because I thought he would add something to your Lordships’ House from which we would benefit. To a great extent, that has revealed itself today. Through a cleverly and carefully constructed straw man argument, he has set up today’s debate. That straw man has been paraded, hoisted aloft, by a series of speeches either wittingly or unwittingly misapprehending the purpose of Clause 20. Before I begin to discuss that, though, let me say that I have been worrying about the use of the word “banter”. That word causes me to worry, and I will explain why to the noble Lord, Lord Young. For as long as I can remember, it has been used as a defence: “It was only a bit of banter”. It was only a bit of banter, but what was it? It has been justifying racism, sexism and homophobia since time immemorial. I was very surprised, therefore, that a man who understands words in the way the noble Lord, Lord Young, does, should use that phrase. The alliteration may work; but I am not happy with the word “banter”.

As I understand it, the point of the Bill is not the noble Lord’s straw man of policing personal conversations; the point is to take on the problem of workplace bullying by customers and users of particular facilities, and ensure that the employers adequately defend the workers, particularly those who have to interact with the public and who may otherwise feel exposed.

I would like briefly to drag this debate into the area of the practical reality for many people, often young, who work in industries where contact with customers is unmediated. After graduating, I ran a bar for a year, and I know what it is like for people working in those environments. They are largely in service industries—the very industries that some of your noble Lordships seek to absent from the Bill. My understanding of this part of the Bill is that it aims to protect people from having to withstand unreasonable behaviour. If we were to throw out that objective in the way that some of these amendments suggest, that would be to declare that we do not care about the plight of those employees and how they are treated.

The noble Baroness, Lady Fox, talked about the customer always being right. That is one of the problems. In the past, bosses have taken the side of customers against employees because they need the trade. In a way, the clause seeks to address that. There are other potential economic benefits, too. For example, many people talk a lot about recruitment problems in the service industry. One of the ways of enhancing such jobs would be for potential recruits to know that their employer has their back. Many good employers already do that; but everybody needs to know that there is an expectation across the board that they will be protected.

To echo my cry at the start of Committee, we need to see how the Government expect this to operate. Here, I join forces with the noble Baroness, Lady Noakes. We need to see what the draft regulations will look like and understand how the guidelines will interpret those regulations, so that your Lordships can be calmed and brought down from the current position.

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[Lord Fox (LD)]

Was the noble Lord in the Chamber at the beginning of the debate?

[Lord Murray of Blidworth (Con)]

I was—I was sitting over there. I apologise to the noble Lord, Lord Fox, for speaking after him. I am sure he is welcome to speak after me if he disagrees with anything I have to say.

Obviously, I am a barrister, as are many of the contributors this evening. I practised in the employment tribunal and in human rights, and I am a member of the Joint Committee on Human Rights. The Joint Committee wrote to the Government in respect of the Bill, expressing concerns that were reflected by the Equality and Human Rights Commission: in particular, the potential for a conflict between the right to freedom of expression, guaranteed by Article 10—as we have heard from various noble Lords—and the Article 8 right to a private and family life. That balancing exercise would be difficult for many employers to carry out.

The previous iterations of measures of this type included safeguards which have been omitted from the Bill, as the noble Lord, Lord Young, pointed out. In the Worker Protection (Amendment of Equality Act 2010) Act 2023 there was a measure that sought to place a duty on employers to take reasonable steps to prevent sexual harassment of their employees, and which is now Section 40A of the Equality Act. During its passage through Parliament, that Bill included provisions which sought to introduce a duty on employers to prevent non-sexual harassment of their employees by third parties. That was Clause 1 of that Bill, as brought from the House of Commons. That provision failed. It would have required all reasonable steps to have been taken to prevent harassment of the employee, solely because they did not seek to prevent the expression of an opinion in circumstances where the conduct constituting harassment involved a conversation in which an employee was not a participant.

In short, the Government have so far failed to answer the question from the Joint Committee about their reasoning for not including a similar carve-out for overheard opinions in the new duty in Clause 20. That was echoed in the original iteration of the Equality Act 2010, passed by the previous Labour Government, under Section 40(2) to (4). That would have required an employer to be liable for third-party harassment where they had failed to take such steps as would have been reasonably practicable to prevent the harassment. However, to be liable, the employer would have had to have known that the employee had been harassed by a third party on at least two other occasions.

The Government have decided not to adopt the same three-strike policy taken in the equivalent provisions or in the earlier potential measure proposed in the 2023 Act. Instead, we have a rule-making power that is said to provide what steps are to be regarded as reasonable. To my mind, that sits uneasily with the mandatory terms set out in new subsection (1A). For those reasons, it should not be part of this legislation.

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[Baroness Jones of Whitchurch (Lab)]

My Lords, I presume that it is where employees are based here in the UK, but if I am wrong I will write to the noble Baroness and clarify that.

In conclusion, I am grateful to all noble Lords for tabling these amendments but, for the reasons set out, the Government cannot support them. The Government are on the side of workers, not abusers. We will ensure that workers have the fair protections at work that they deserve. I therefore ask that Amendment 83 is withdrawn and that Clause 20 stands part of the Bill.

[Lord Fox (LD)]

I asked the Minister to set out in detail how future regulations and these clauses will work in practice. I hope she is able to take that on board between Committee and Report.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I will attempt to update your Lordships’ House on these issues at the time the noble Lord has suggested.