Employment Rights Bill

Debate between Lord Hunt of Wirral and Lord Norton of Louth

Committee stage
Tuesday 24th June 2025 Lords Chamber

[Lord Norton of Louth (Con)]

My Lords, this amendment provides the means to check that the Bill, once enacted, achieves the purposes for which it is intended. It is a more comprehensive amendment than several that have been debated already, which provide for a review of certain provisions within 12 months of the Act coming into force. I shall argue that the relevance of the amendment goes beyond the Bill itself.

Too often in the past, legislative success for a Minister was seen as a Bill receiving Royal Assent. In evidence to the Constitution Committee’s 2004 inquiry into Parliament and the legislative process, former Clerk of the Parliaments Sir Michael Wheeler-Booth and Professor Vernon Bogdanor noted that,

“all too often, Parliament forgets about legislation once it has reached the statute book”.

Legislative success should be seen not as getting a Bill on the statute book but rather as delivering on what Parliament intended it to deliver.

As the then leader of the House of Commons, the noble Lord, Lord Hain, told the Constitution Committee,

“there is no point in passing legislation if it is not having the desired impact or it is having a different impact”.

Recognition of that point led the committee in its 2004 report to recommend that most Bills should be subject to post-legislative scrutiny within three years of their commencement or six years from their enactment, whichever was the sooner. In 2008, the Government accepted that Bills should normally be subject to review three to five years after enactment, a policy reiterated by Ministers in recent months. Indeed, in January this year, the noble Baroness, Lady Twycross, reported that the Cabinet Office had written to departments reminding them of the importance of post-legislative scrutiny.

In practice, not all Bills are subject to post-legislative review by departments. Some have undertaken thorough reviews, but the enthusiasm for completing them appears to differ between departments. Earlier this year, I asked whether the Government would encourage departments to emulate the Home Office, which had engaged in detailed post-legislative scrutiny of the Counter-Terrorism and Border Security Act 2019. There is a compelling case for ensuring that, in respect of certain Bills, post-legislative review is put beyond doubt through being embodied in the measures themselves.

There are precedents for including within a Bill a provision for post-legislative scrutiny. The most recent incidence is the Football Governance Bill. The Government, to their credit, accepted the argument that the Bill should provide for post-legislative scrutiny and brought forward their own amendment on Report to give effect to that proposal. The wording of my amendment may appear familiar to the Minister as it is taken from the Government’s amendment to the Football Governance Bill.

Bills that meet certain criteria should contain such a provision. The criteria I propose are that the Bill is large, is complex, makes substantial changes to the law, is contested and has not been subject to pre-legislative scrutiny. Bills that meet some but not all of the criteria may be considered for incorporating such a provision. A Bill that is not large but meets the other criteria should normally be considered for embodying provision for such scrutiny.

Each year your Lordships’ House usually appoints a special inquiry committee to engage in post-legislative scrutiny of an Act or group of Acts, such as the Mental Capacity Act or adoption legislation, that generally do not meet any of the criteria I have mentioned. That we select measures of this type for such scrutiny is not an argument against enshrining post-legislative scrutiny in some Bills but rather the reverse. We steer clear of Acts that are large and contentious. We are not likely to select the measure before us for post-legislative scrutiny in a few years’ time. Our scrutiny should complement that undertaken by government of measures covered by these criteria.

The arguments for post-legislative scrutiny of major Bills are several. There is the effect on drafting—knowing that a measure will subsequently be subject to review helps to concentrate the minds of Ministers and drafters in preparing the Bill. It serves to prompt a clear adumbration of purpose—of delineating the basis on which one will know whether the measure has achieved what it was designed to do. Perhaps most importantly, knowing that it will subsequently be reviewed may serve to reassure critics of the measure. That was especially helpful in the context of the Football Governance Bill. I think it applies in the case of this Bill.

Above all, providing the means of checking whether a measure has or has not met its aims and identifying what needs to be done to rectify any problems with its delivery contributes to good law. The Office of the Parliamentary Counsel has previously defined good law as law that is

“necessary, effective, clear, coherent and accessible”.

I have defined it as law that is well intentioned, well drafted and well implemented. Some of these features need to be checked during the Bill’s passage, but others, especially being effective or, in my terms, well implemented, are best tested through post-legislative scrutiny. As one Minister told this House’s Select Committee on the Mental Capacity Act 2005,

“while getting the Act onto the statute book had been a success, ensuring that it was fully implemented and understood was ‘work in progress’”.

This Bill clearly meets the criteria I have outlined. It is large, complex, makes a substantial change to employment law, is clearly contested and was not subject to pre-legislative scrutiny. The Committee has considered more than 330 amendments over 11 days. There are clearly disputes about the principles it embodies and its effect. Putting a provision for post-legislative scrutiny in the Bill, thus ensuring such scrutiny, meets the purposes I outlined.

The Minister may remind us that the Bill will be eligible for post-legislative review in any event, but this amendment puts it beyond doubt. If the Government have confidence in the Bill, they should have no problem in accepting the amendment. Critics may be reassured that, as with the Football Governance Bill, its effects will be reviewed. The amendment sets out the review to be undertaken before the end of a period of five years, and what the review in particular must assess. It also requires the Secretary of State to publish an invitation to interested parties to make submissions on the operation of the Act.

As I say, the provisions replicate those in the Football Governance Bill, omitting only the parts that are specific to football and do not lend themselves to replication in other measures. I urge the Government to build on what they have already achieved in the Football Governance Bill and establish best practice in embodying within this Bill provision for post-legislative scrutiny. Utilising the criteria I have detailed limits the number of Bills that merit such a dedicated provision. This Bill does merit such a provision, and I hope the Minister will demonstrate that the Government have the confidence to embrace it. I beg to move.

[Lord Hunt of Wirral (Con)]

My Lords, I welcome the opportunity to pay tribute to my noble friend Lord Norton of Louth. He is not only a great author and academic, but he is regarded as a world authority on constitutional issues, and he has certainly been described as the greatest living expert on Parliament, so we take very seriously his very constructive suggestion for post-legislative scrutiny.

However, I rise to speak to Amendment 335, standing in my name, which would introduce a sunset clause ensuring that the Act will expire after three years unless the Secretary of State demonstrates that it has led to a net increase in employment. I do so against a background of economic data emerging in recent months painting a deeply concerning picture of the UK labour market. The UK’s jobless rate ticked up to 4.6% in April, while payrolled employment has fallen sharply, according to official figures covering the period when the Budget tax hikes on businesses came into effect.

We had an understanding that some of us would attempt to put together an overall view of what is happening in the jobs market at present, but the response from the business community to this Bill has been unambiguous and deeply troubling. The Institute of Directors has published research showing that more than seven in 10 business leaders—72%—believe that the Bill will have a negative impact on the UK’s economic growth. This is not a marginal concern expressed by a vocal or unrepresentative minority; it represents a clear majority of all those who create jobs in our economy.

Even more alarmingly, half of business leaders reported that they would be less likely to hire new staff as a direct consequence of this legislation. Let that statistic sink in. We are therefore considering legislation that, according to those who make the hiring decisions, will directly reduce employment opportunities for British workers.

These employment figures do not exist in isolation. They form part of a broader pattern of economic decline that, sadly, has accelerated since this Government took office. The combination of increased employer national insurance contributions, the various tax rises announced by the Chancellor and now this additional regulatory burden create a perfect storm of disincentives to business investment and job creation.

We are now witnessing the practical consequences of economic policies cobbled together on the basis of wishful thinking and political prejudice by people with little or no first-hand experience or understanding of how businesses operate in practice. When costs rise, businesses must respond. They cannot simply absorb infinite increases in regulatory compliance, tax obligations and employment-related expenses. The rational response is to reduce costs where possible—and, unfortunately, employment costs are often the largest element in business operations as well as the most unpredictable.

Throughout the debates on this Bill, both the Ministers opposite and their colleagues in the other place have maintained that it will not harm employment. They have repeated this assertion with remarkable consistency, despite mounting evidence to the contrary. This represents either a fundamental misunderstanding of basic economic principles or a deliberate choice virtually to ignore inconvenient evidence.

The Government appear afflicted by a sustained delusion that they can simultaneously increase the costs and complexity of employment while maintaining that employment levels will be unaffected. This surely defies both economic logic and empirical evidence. It is rather like claiming that one can increase the price of a product while ensuring that demand will remain unchanged, simply by insisting that it must be so.

We have to entertain the possibility that we on these Benches are wrong. Perhaps the business community is wrong. Perhaps the Office for Budget Responsibility is wrong. Perhaps the employment statistics are, at best, misleading. Perhaps the correlation between increased business costs and reduced hiring is merely coincidental. Perhaps economic theory and established business common sense are for the birds. My amendment is designed to test the Government’s confidence. If Ministers are indeed confident that this Bill will benefit workers and boost employment, they should graciously accede to this amendment and demonstrate to us all their unshakeable iron confidence that this is not, after all, an unemployment Bill.