Employment Rights Bill

Lord Katz Excerpts

Committee stage
Tuesday 24th June 2025 Lords Chamber

[Lord Hunt of Wirral (Con)]

My Lords, I rise to speak to this amendment and, frankly, to express a degree of disbelief that such a proposal should have been made. With due respect to the noble Baroness, I do not believe that this amendment is a serious contribution to the debate on fair pay or responsible corporate governance. It is a piece of performative and ideological showmanship—a throwback to a worldview that sees profit as a vice, wealth as inherently suspect and enterprise as something to be managed, limited or downright punished. The idea that government should impose a legal maximum pay ratio—a flat arbitrary ceiling of 10:1 between the highest-paid and lowest-paid employees in every organisation—is not just unworkable but, I believe, economically illiterate.

First, this proposal would be a gift to bureaucracy and a curse to business. Every company, from high street shops to high-growth tech firms, would have to monitor and police every single form of pay—salary, shares, bonuses, pensions and benefits in kind—just to ensure that they do not cross an artificial line. Do we really want our job creators to spend their time calculating compliance spreadsheets instead of investing, innovating and employing? Secondly, it would actively disincentivise growth and ambition. High-performing individuals—those who drive investment, lead exports and create jobs—would simply leave and take their talent elsewhere.

The noble Baroness mentioned Amazon. I join the Government in welcoming the further investment that Amazon is making. As a matter of record, Amazon employs circa 75,000 people in the UK. No one is on zero hours, and the minimum annual starting salary is between £28,000 and £30,000 a year. It provides flexible working opportunities from day one, including term-time contracts, which allow parents, grandparents or carers guaranteed leave during school holidays. It offers paid parental and bereavement leave. Amazon also offers guaranteed hours from day one, and employees have the choice of full-time or part-time contracts. It is important to put the record straight. Since 2010, Amazon has invested more than £64,000 million in the UK, and £12,000 million in the last 12 months, and supports a network of around 100,000 UK-based small and medium-sized businesses. I welcome the opportunity that the noble Baroness has given me to put the record straight.

To go back to the noble Baroness’s amendment, it would mean that employers would be forced to avoid hiring lower-paid staff altogether, just to protect the ratio. What would be the result? There would be fewer jobs, less opportunity and more outsourcing—the very opposite of what a fair and inclusive economy should look like, hitting the least well-off, the most vulnerable and those at the margins of the labour market.

My third point is that this is not fairness; it is levelling down. It is virtually saying, “Don’t succeed too much, don’t reward excellence, don’t grow too big or too fast or be too profitable”. That is not fairness—it is anti-growth, anti-aspiration and anti-business. I must tell the noble Baroness that this amendment looks like it would be more appropriate in a Maoist economic manifesto, delivered to his revolutionary cadres, rather than a serious proposal for modern employment legislation. What this amendment reveals is not a serious attempt to solve a policy problem but a mindset that is suspicious of success, dismissive of wealth creation and entirely detached from economic reality. Against that background, I look forward to hearing the Minister’s response, which I hope will agree with mine, that this is an amendment that should not be accepted.

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

My Lords, let accord break out across the Table. I thank the noble Baroness, Lady Bennett of Manor Castle, for tabling Amendment 320. I do not share the disbelief of the noble Lord, Lord Hunt of Wirral, in hearing it, but only because I probably have more than the passing acquaintance with bits of the Green Party manifesto that he perhaps does—and that is the only reason for it.

It is right that companies should be sensitive to wider workforce pay when setting pay for those in the boardroom and other senior leadership positions. Company law and wider regulation already address that point. First, the Companies Act requires that UK listed companies must disclose and explain each year the ratio of their CEO’s pay to that of the company’s lower-paid and average-paid employees. Secondly, under the UK Corporate Governance Code, listed companies are asked to review workforce remuneration when setting directors’ pay and engage with employees to explain how executive pay aligns with wider company pay policy. Taken together, these measures provide important transparency and accountability in how UK listed companies deal with pay and incentives across the whole employee base.

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[Lord Sharpe of Epsom (Con)]

My Lords, I thank the noble Baroness, Lady Bennett, for bringing forward this amendment requiring a review of safe homeward transport for workers. I also welcome her back from her brief visit to the Maoist utopia on her last amendment. The safety and well-being of workers, particularly those finishing their shifts late in the evening, is a matter of significant importance. Many sectors operate outside traditional working hours, and the challenges faced by employees in securing safe and affordable transportation home after 11 pm are real and varied.

Understanding these issues is crucial, especially for vulnerable groups, including women and girls, for whom late-night travel can present heightened risks. It is also important to recognise that safe transport arrangements can contribute positively to worker morale and retention and may even play a role in reducing crime or accidents. The review has the potential to shed valuable light on current practices and challenges and provide a basis for informed discussion about how best to support workers who face late-night journeys home. I look forward to the Minister’s response.

[Lord Katz (Lab)]

My Lords, I thank the noble Baroness, Lady Bennett of Manor Castle, for tabling Amendment 321. We recognise the concern underpinning the amendment and agree that workers finishing late at night should be able to travel home safely and affordably. We are aware that for some workers, particularly those in hospitality, healthcare and security, late shifts can pose challenges when public transport options are limited. We also acknowledge and welcome that some employers, including firms in the City of London, have taken proactive steps to support their staff with safe transport home.

While we do not believe that it is appropriate to legislate for a review at this time, I hope I can reassure your Lordships’ House that we are committed to supporting workers’ well-being and safety. That commitment is evident throughout the Bill. For example, as we discussed on the second day of Committee in early May—another opportunity for a history lesson, it seems so long ago—the Bill strengthens the right to request flexible working from day one of employment. This flexible working provision empowers workers and employers to agree working patterns that better suit individual circumstances, including, where appropriate and reasonable, avoiding late finishes. We are also taking steps to improve enforcement of existing rights and to ensure that employers meet their obligations to provide safe working conditions.

Although it is not the subject of this legislation, the Government are also committed to reviving, rejuvenating and investing in public transport, not least through the Bus Services (No. 2) Bill, the creation of GBR, improvements to rail services and the huge amounts being invested across the country, particularly in the north, in new transport projects, all of which will provide a greater level of options and service for not just people working late but those who want to enjoy the night-time economy and to use public transport more generally.

While we cannot support this amendment, we share the underlying concern and will continue to work to ensure that all workers are protected and supported. I therefore ask the noble Baroness, Lady Bennett, to withdraw her Amendment 321.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I thank those who have participated in this brief debate. I am glad that the noble Lord, Lord Sharpe of Epsom, and I can agree that there is an issue here and I thank the Minister for his response. I do not think that offering flexible working will really work with a pub or restaurant—that option will not be available. On public transport, for the workers affected, overwhelmingly we are talking not about grand infrastructure projects but local buses, which have been massively decimated over the last decade. None the less, the point has been made and I beg leave to withdraw the amendment.