Employment Rights Bill

Debate between Lord Leigh of Hurley and Baroness Neville-Rolfe

Committee stage
Tuesday 29th April 2025 Lords Chamber

[Lord Leigh of Hurley (Con)]

My Lords, it is a great honour to follow my noble friend Lady Noakes and the noble Lord, Lord Londesborough. My noble friend and I worked on the Small Business, Enterprise and Employment Act, which I am pleased has provided good use here on in. Of course, she has a most distinguished business career, not just, as we all know, in very large financial services companies but as my president at the Institute of Chartered Accountants, where she interacted with many small and medium-sized businesses. The noble Lord, Lord Londesborough, and I spent the turn of the year discussing the Bill and its ramifications.

I speak as someone who takes a particular interest in SMEs, for reasons I will explain. I am, of course, in full support of this small group of amendments—as are, I think, all business representative bodies. The FSB, which is the UK’s largest employer group, has said that this will

“wreak havoc on our already fragile economy”.

We have had survey after survey: 1,270 companies were surveyed. Two-thirds of them said that they will curb hiring, and one-third said that they would reduce staff as a result of this Bill. The aforementioned Chartered Institute of Personnel and Development discovered that 25% of its members will be considering lay-offs as a direct result of this Bill. The Institute of Directors called it

“a sledgehammer to crack a nut.”

As I mentioned, I am particularly close to the SME sector, not least because, in 1989, I started a small business with one partner and one assistant. I should therefore declare an interest that I still own a chunk of shares in that small business, which, when we started, was called Cavendish Corporate Finance and is now Cavendish plc. At this point I normally take a pot-shot at the Labour Front Bench as not having any business experience to talk of—certainly not in the other place—but I have to be much more deferential in this Chamber, not least because the noble Lord, Lord Leong, two years after I started Cavendish Corporate Finance, started Cavendish Publishing, except, of course, that he had much greater success than me. According to Wikipedia, in his first year made £250,000 profit, which is very impressive, because in my first year I lost money, so I have to be suitably deferential. None the less, I am sure the noble Lord will remember those formative years of starting a business, when one was focused on nothing else but that business. Clearly, we desperately need people to do the same as the noble Lord and me: to take the risk, start a business, have a go and then employ people.

The decision to employ a person is a very big one. It is the toughest decision for the first person, but it is still tough for the second, third, fourth and fifth. As it happens, we now have 220 people employed at Cavendish, but it took a long time to get there and we had to merge with a number of other companies so to do. For many years my small business would have been covered by my noble friend Lady Noakes’s exemption, and it would need it because, to take on people in a small business, you are recruiting someone not just to do a job of work but to join your culture and your aspirations, and to fit in. Sometimes it works and sometimes it does not, and when it does not you have to make difficult decisions to make changes. The fact that we are now allowed to let people go relatively easily encourages people such as me to take a chance and employ someone where I would not otherwise do so.

I am very worried that this Bill will lead to a reduction in business growth and, in particular, in employment. Its main burdens will be borne by small businesses. I think the Minister cited five companies that she said were broadly supportive of the Bill. All but one were larger companies, and one was actually the Co-op—I am not sure that entirely counts. Another was IKEA, but I would be very grateful if the Minister could cite the support from IKEA, because I cannot find it. The SME sector realises that the financial burden that the Bill imposes of some £5 billion will largely fall on it, and it is very worried. So the first issue is financial.

The second issue is operational. SMEs do not have an HR department. They simply do not have the facility to wade through this enormous amount of legislation about how they are supposed to treat their staff. The only way round it is, of course, to deploy an agency at great expense to advise and consult every time there is any HR issue, and it is just another cost for businesses which are, for the most part, feeling pretty fragile, and much more fragile after the horrendous NIC increases that are being imposed on them.

The third hammer blow is that those business just will not hire. They just will not take the risk of hiring new employees, which will, of course, restrict their growth, because the only way a business can grow is to recruit new people with fresh blood, fresh ideas and fresh reach. It is impossible for a business to grow without making hires.

Fourthly, the Bill will make businesses risk averse. The Institute of Chartered Accountants in England and Wales has specifically said that this will make businesses risk averse in all their decisions, because of the extra risks that are imposed on those businesses by the Bill because of the costs and burdens they have to undertake.

Lastly, the fifth problem with the Bill is the lack of consultation. It has been rushed through to meet the 100-day deadline and, as a result, there has not been proper consultation and we are wading through a vast number of amendments that we are trying to get our heads round.

For all those reasons, one accepts that the Bill is in the manifesto and that it has to happen—it is in, in many ways appropriate that it does—but please can we leave out the SME businesses that will struggle with this Bill? Maybe we can bring it in later, suitably amended, but not now.

[Baroness Neville-Rolfe (Con)]

My Lords, I think the Government would do themselves a great deal of good if they made special arrangements for small business. They are well precedented: we have the VAT threshold, the employment allowance and the small business audit, and it would be a powerful addition to their forthcoming White Paper or Green Paper on small businesses.

Everyone knows that I often speak in favour of small business and have very good relations with the Federation of Small Businesses, so I obviously support the expert trio of my noble friend Lady Noakes and the noble Lords, Lord Londesborough and Lord Vaux of Harrowden, who we should listen to. To put it simply, either we need some special arrangements for small businesses, or—and it might be even better—we need changes to the Bill to remove the bureaucratic provisions that are going to get in the way of success; to look at the lack of flexibility and remedy it; and to avoid the inevitable huge increase in tribunal cases and the overuse of delegated powers. I encourage the Minister to think creatively in this important area.

House of Lords (Hereditary Peers) Bill

Debate between Lord Leigh of Hurley and Baroness Neville-Rolfe

Committee stage
Tuesday 1st April 2025 Lords Chamber

[Lord Leigh of Hurley (Con)]

I am coming to the noble Baroness, Lady Jones, in a minute.

Of course, we would not do that. Likewise, I believe we can respect where we come from and recognise our rich fabric of community by allowing people who are proven to be good at their job and represent how democracy came to this country over centuries, as power was wrestled from the monarchy, to be allowed to continue to have a presence here.

As a meritocrat, I accept the argument that the best people should be appointed to this House, and it is not as if we would start from here by appointing new hereditaries—although my mum keeps telling me that she reckons I am up for an earldom, but I think that is unlikely. I hasten to add that, in my view, as the noble and learned Baroness, Lady Butler-Sloss, said, anyone in this House who does not contribute sufficiently and appropriately should be asked to leave forthwith. This amendment would allow people who are clearly capable, and who have the hugely valuable assets of institutional memory and years of experience, to remain.

I had in my script to say that the noble Baroness, Lady Jones of Moulsecoomb, is right—it is not an expression I am used to, but she none the less makes the point that the hereditaries in this House fought to come in, through an election, because they wanted to serve.

If we are totally honest with ourselves, there is, as the noble Baroness, Lady Mallalieu, said, a certain randomness as to why any of us are here. The little that I know about the appointment process has shown me that it is perhaps more random than is generally recognised. I suggest to the Committee that to adopt the amendment is to do the right thing for people who have served us well and continue so to do.

We are told that poll after poll supports the abolition of hereditaries, and that might be true—I am not so sure. Even if it is, I think most people would accept that there is room for a very small percentage of Members of this House to come from a hereditary background and be allowed to serve their time. This amendment is in another fine British tradition: for a suitable compromise to be acceptable.

[Baroness Neville-Rolfe (Con)]

My Lords, this is an important Bill, and I am sorry not to have spoken on it before, owing to my commitments on the Front Bench at a busy time for the economy. My noble friend Lady Mobarik is right to press the Government on the transitional arrangements. I will focus on two points in that context. The first is the loss of talent and experience that we face, and the damage that that could do to our scrutiny function at a time of great challenge and change in our country. The second is the pressure that will grow for an elected House if all our hereditary Peers disappear overnight, as currently planned.

I have been reading a book called Judgement at Work by Andrew Likierman, a former dean of the London Business School. He defines judgment as

“the combination of personal qualities with relevant knowledge and experience … to make decisions or to form opinions”.

Length of time in a role, or a succession of roles, improves judgment because prior experiences remain accessible sources of knowledge and provide an understanding of success and failure.

We are lucky to have many long servers among our hereditary Peers—280 years of service, in the words of my noble friend Lord Shinkwin. Many also have experience of responsibility outside government and have learned, over time, to cope with complexity and risk, to listen, to work with others and to know who to trust. Those are all ingredients of judgment—soundness of judgment—as well. In view of what the noble and learned Baroness, Lady Butler-Sloss, said, I should add “hard work” as a very important quality that has been demonstrated by the hereditary Peers.

They also come from across the country. We heard from my noble friend Lady Mobarik about Scotland and from my noble friend Lady Foster of Aghadrumsee about the importance of Northern Ireland representation. They provide a good mix, as we have seen today, with other Members of the House who are often from political backgrounds and very focused on the south-east.

To develop the argument, I will cite three examples. The first is our deputy Conservative leader, my noble friend Lord Howe. He has sat in this House for 40 years and is a master of the art of scrutiny in the most courteous and compelling way. When I arrived, he was a Health Minister and the person whom I and most others chose to model ourselves on—effective at the Dispatch Box, in the tea rooms and in Whitehall. More recently, he steered the difficult legislation on infected blood through the House, working across party to excellent effect. All that experience as a Minister of Agriculture, Health, Defence and at the FCO, and in opposition, is helpful to the Government of the day and to the House as a whole.

My second example is the noble Lord, Lord Londesborough, with whom I have had the pleasure of working on amendments to the national insurance contributions Bill. He worked as a foreign correspondent at the start of his career, but he is a serial entrepreneur and was able to produce spreadsheets on the impact of the NICs changes on small businesses he was involved with—which the Treasury unfortunately had refused to provide. It would be a great pity to lose that practical business voice. Some life Peers, including myself, speak in the House with the benefit of business spectacles, but, of course, we get out of date as we cease to be involved with business day to day. Keeping voices such as that of my noble friend Lord Londesborough would help us to reach sound, common-sense judgments from experience.

Thirdly, the noble Lord, Lord Vaux of Harrowden, has an impressive background in finance and he brings that to our debates and committees. The noble Lord, Lord Shinkwin, noted the hereditaries’ important role in committees. I highlight the valuable role the noble Lord, Lord Vaux, played in particular as chair of the House’s Finance Committee. He may not thank me for saying so, as the concept probably will not see the light of day, but he suggested to me the brilliant idea of dealing with the restoration of the Palace of Westminster by building a small US-style service tower in one of the courtyards, no doubt in Pugin style, and then concreting in the basement services. This novel idea would reduce the risk of fire and of asbestos contamination during the renovation and, I suspect, would cost much less. The point is that it shows the value of critical thinking—we must not lose that.

That brings me on to my second theme. I think the current mixture of Peers appointed by successive Prime Ministers, especially if there are not too many of them, Bishops and the historic element, just about works, partly because of the mix of views, experience, age and skills that are represented. Without those who are currently hereditaries, it becomes much more difficult to justify a wholly appointed House. Moreover, giving a lot of power to the great and the good on HOLAC would not help at all. I believe that, if we indulge the brutal decapitation of the hereditary Peers later this year, we will rightly face growing demands for an elected House. Noble Lords should reflect on this and on the discussions today around my noble friend’s amendment before they vote on this Bill. In the words of the right reverend Prelate the Bishop of St Albans, we need evolution, not revolution.

National Insurance Contributions (Secondary Class 1 Contributions) Bill

Debate between Lord Leigh of Hurley and Baroness Neville-Rolfe

3rd reading
Tuesday 4th March 2025 Lords Chamber

[Lord Leigh of Hurley (Con)]

I want to raise an objection to the earlier remarks of the noble Lord, Lord Eatwell, which accused us of making amendments to spray public funding around. We made a number of suggestions as to how government could raise revenue in other ways, and government does flex itself, as we have seen in the increasing defence expenditure and reduction in overseas aid, which is a perfectly reasonable thing to do outside of a Budget.

When the chief executive of a hospice says publicly that, as a result of this legislation, people may die in greater pain and agony than would otherwise be the case, I think it is perfectly reasonable for this to be drawn to your Lordships’ attention and for amendments to be discussed.

[Baroness Neville-Rolfe (Con)]

My Lords, I am concluding for the Opposition on this amendment. We are content with the amendment, which we see as a technical, tidying-up amendment.

National Insurance Contributions (Secondary Class 1 Contributions) Bill

Debate between Lord Leigh of Hurley and Baroness Neville-Rolfe

Committee stage
Thursday 6th February 2025 Grand Committee

[Baroness Neville-Rolfe (Con)]

My Lords, I rise to move the amendment in my name and that of my noble friend Lord Altrincham, and to support the amendment tabled by my noble friend Lord Leigh of Hurley. These amendments are not merely technical adjustments; they represent a critical step in recognising and supporting the social care sector, which remains indispensable to our society.

Amendment 47 proposes an increase in the employment allowance available to employers in the social care sector, raising it from £10,500 to £20,000 per tax year. This increase is of profound importance. Our social care providers are grappling with rising operational costs, staffing challenges and the ever-present need to deliver high-quality care to some of our most vulnerable citizens. By enhancing the employment allowance, we are providing smaller employers with essential financial relief that will help to sustain their operations in the light of the brutal national insurance increases, retain skilled and valuable staff and invest in the quality improvements that our social care users so desperately need.

For too long, the funding constraints on social care providers have meant that many have had to make painful compromises, such as reducing staff numbers, cutting back on training or deferring vital infrastructure improvements. These compromises ultimately diminish the quality of care provided and place additional strain on an already overstretched system. Increasing the allowance would acknowledge that social care is not a peripheral service, but a core pillar of our public support system, deserving of the same robust backing as the NHS, which is being compensated for the additional NICs charges.

Moreover, this amendment recognises the unique cost structures within the social care sector. Unlike other industries, social care providers face significant regulatory and operational burdens. They must meet stringent care standards, invest in specialised training and often operate in environments where margins are exceptionally thin. They are the backbone of a sector that touches so many lives. The Local Government Association estimates that the NICs charges create £1.77 billion in additional costs for councils, with £637 million for directly employed staff and £1.13 billion through indirect costs, via commissioned providers, including £628 million for adult social care alone. These are big figures.

There is also an important symbolic dimension to these amendments. By focusing on the social care sector, we are sending a clear message that the care of our elderly, our disabled and our most vulnerable is a national priority. This sector has often been on the back foot, underfunded and overlooked. Today we are recognising its importance and taking concrete steps to bolster it. In doing so, we honour the dedication of countless social care workers who deliver care with compassion, often under extremely challenging circumstances.

In conclusion, these amendments will provide a much-needed boost to the employment allowance for social care providers and introduce a mechanism of accountability that will ensure that the measures are delivering the intended benefits. They are a testament to our commitment to support a sector that is foundational in the well-being of our communities. I urge my colleagues to join me in supporting these amendments, recognising that those struggling with disabilities and an ever-ageing community, partly thanks to the miracles of modern medicine, need our help. We need to invest in a stronger, fairer and more caring society.

[Lord Leigh of Hurley (Con)]

My Lords, I rise to support Amendment 47 and my own Amendment 65, which is yet another request for an impact assessment. I raised the issues that small businesses and charities will have at our last session, but I shall focus on the social care sector, for some of the reasons that my noble friend Lady Neville-Rolfe has explained. This sector faces particular challenges, and to apply a one-size-fits-all to every employer in the UK is in this instance simply heartless and smacks of a policy rushed through without proper consideration of the particular issues in the sector.

The recent Budget, while providing additional funding to social care, does not go far enough to meet the needs of a sector facing increased costs from the rising national living wage and employers’ NI contributions. There is the £600 million grant, which we assume is to be shared between adult and children’s social care, but it is far from sufficient to address the estimated £3.7 billion increase in costs facing providers due to the changes announced in the Budget, which represent the 10.6% increase in pay from April 2025.

We know of course that councils will be expected to fill much of this gap through council tax precepts and local revenue, but, even with the £600 million grant, there is still a £1.3 billion shortfall that local authorities have. That figure relates only to the basic costs of providing care, with no consideration of inflation, the resources required to address ongoing workforce challenges, or the increased capacity, as my noble friend Lady Neville-Rolfe mentioned, of a growing ageing population. Because of this, there are reasons to believe that the estimates of a £2.24 billion gap for older person residential care is a conservative figure. If this is added to the homecare deficit, reported to be £1.76 billion, and the unquantified gap for working-age adults, the total gap between the average fee paid by local authorities and the actual costs of providing care could be significantly higher than the £4 billion.

I appreciate that these figures are so large that it is possibly difficult to take them all in and relate to them. If I may, I shall look on a micro basis at organisations I happen to know about personally. I am sure that each of us has a connection with such an organisation locally. In my case, I have connections with Jewish Care, which is Anglo-Jewry’s leading health and social care charity for the Jewish community in London and the south-east. It touches the lives of 12,000 people every week—including, of course, Holocaust survivors.

Jewish Care operates nine care homes, which provide a range of services, including fabulous residential care and also dementia care, mental health care and nursing care. It manages four retirement living schemes and an assisted living scheme, nine community centres and three centres for people living with dementia. My interest is that I was a trustee of Jewish Care, and I am still a proud fundraiser for it. I have been a patron for more than 25 years. I am grateful to Jewish Care for sharing with me its concerns, which reflect those of the whole industry.

In context, Jewish Care raises some £20 million in revenue donations—voluntary gifts. The total increase in workforce costs as a result of this Budget is estimated by Jewish Care at £1.1 million. The increase in the percentage for NICs from 13.8% to 15% increases the workforce costs by £400,000 and the lowering of the threshold, which we all know about, results in a further £700,000—hence £1.1 million.

Of course, it is disproportionately affected because it is a large employer with very many part-time staff. The immediate impact is that carers’ salaries will not be raised, as would otherwise have been the case. It will also force the charity to make choices about how care homes are operated and, just as importantly, to divert investments in other community-focused services. One specific example is that, until the announcement of the NI increases, it was planning to open a much-needed dementia day centre. It was all planned and ready to go, but these additional costs have forced Jewish Care to put that on hold. This is real damage that the Government are causing to people’s lives, and it is particularly poignant because both Wes Streeting and the Prime Minister proclaimed themselves, as recently as last June, just before the election, to be huge supporters of this charity and its objectives.