Employment Rights Bill

Lord Leong Excerpts

Committee stage
Tuesday 24th June 2025 Lords Chamber

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

My Lords, I am grateful to every noble Lord for their contribution, and I have listened intently to each and every one of them. I thank noble Lords for their kind words about my previous business career.

We return to the important issue of impact assessments. I appreciate the continued efforts of the noble Lords, Lord Sharpe and Lord Hunt of Wirral, here. It will be no surprise to your Lordships’ House, given the number of separate debates—I think there have been about eight now—we have had on this topic, that the Government view these amendments as unnecessary. Let me recap. We have already published 27 impact assessments, available on GOV.UK, which have been updated where needed as policy has been added to the Bill during passage.

Academics at Warwick University, Oxford University, MIT and UCL all find a positive relationship between job satisfaction and productivity in their research. For example, Simon Deakin, professor of law at the University of Cambridge, said:

“The consensus on the economic impacts of labour laws is that, far from being harmful to growth, they contribute positively to productivity. Labour laws also help ensure that growth is more inclusive and that gains are distributed more widely across society”.


All this evidence is laid out in our impact assessment, which was developed in consultation with external experts. Business supports the view that this will be good for productivity. In a survey undertaken by the Institute of Public Policy, seven in 10 employers said that strengthened employment rights will boost productivity, compared to just 7% who disagreed, and six in 10 employers thought stronger employment rights would have a positive impact on business profitability, while fewer than two in 10 disagreed.

We have worked hand in hand with businesses, trade unions and civil society to understand the impacts of this Bill—

[Baroness Fox of Buckley (Non-Afl)]

There is no doubt that people who are happy at work are likely to contribute positively to the workplace. Nobody, I think, is arguing against that and wants miserable workers with no rights. However, what we are trying to explore is not whether people will have job satisfaction but whether they will have jobs. It is about the unintended consequences of the Bill that might mean that people are not employed; or, indeed, that new jobs are not created because productivity will not go up; or that it becomes too risky to employ, for example, young workers, and so on.

With all due respect to Warwick University’s academics—I went there and I know some of the people who wrote that research, and I am sure that they are happy in their workplace—the truth is that if some piece of legislation ended up unintentionally closing down Warwick University, they would not be happy and productivity would not go up. That is what we are concerned with. It is not a theoretical academic argument about how being happy at work makes you work harder—I know that. But if there is no work, then you are not going to be happy, you are not going to do any work and productivity will go down.

[Lord Leong (Lab)]

I thank the noble Baroness for that contribution. If she can be a bit patient, I have some more positive news for her.

We have worked hand in hand with businesses and trade unions, as I said earlier, to understand the impacts of the Bill on industry and will produce further analysis as required under the Better Regulation Framework. It is worth noting that more doors are opening than closing. In the first quarter of 2025, the UK saw 90,000 businesses created, up 2.8% on last year, while business closures fell by 4.4%. This Government are backing British businesses and British workers, and our Modern Industrial Strategy, published yesterday, is making that real. To give one example, we have boosted the British Business Bank’s capacity to £25.6 billion, unlocking billions for innovative firms, especially SMEs. For the first time, the British Business Bank will be able to take equity in fast-growing tech companies. This has never happened before. That is helping crowd in tens of billions of pounds more in private capital, fuelling growth, creating jobs and driving long-term prosperity. I hope that gives comfort to the noble Lord, Lord Deben.

[Lord Deben (Con)]

I am very pleased with all the research that was done before the Bill and all the research that has been done with it. The only question is: when the Bill goes through, why do not we do the research to make sure that we were right? I cannot understand why we draw the line the moment the Bill is passed, except in the generalities of better regulation. Will the Minister, whose business knowledge is considerable, please accept that businesspeople normally measure by results? Why cannot we measure the results?

[Lord Leong (Lab)]

I thank the noble Lord. I ask him to bear with me—patience here. We are already seeing the results. Just this morning, Amazon announced a £40 billion investment. This means that it has resounding confidence in the UK Government.

[Baroness Verma (Con)]

We are talking about small and medium-sized businesses too, and they are not all going to be tech companies; they are not all going to be Amazons. They are small or medium-sized companies that keep most cities and towns going.

[Lord Leong (Lab)]

I thank the noble Baroness for that. I, together with my ministerial colleagues, speak to businesses every day, whether they are tech companies, other businesses or whatever. Yesterday, I had a conversation with Small Business Britain, and we talked about this Bill and most of its members have confidence in this Government. We talk to all businesses.

I come back to Amazon: basically, what it means is £40 billion. It is creating 4,000 new jobs across the UK, which is a major boost to our tech and logistics sector. The latest Lloyds Business Barometer survey shows that business confidence is at a nine-month high, with a rise in hiring expectations among businesses. This is proof that our plan for change is working. Britain is open for business, and the world is taking notice. There is simply nothing more I can add to the noble Lord’s argument. This analysis—and we will continue to do impact assessments—will be done, and I therefore ask the noble Lord to withdraw Amendment 310.

[Baroness Lawlor (Con)]

My Lords, before the Minister sits down, may I just clarify whether he said that 90,000 jobs were created in the first quarter of 2025, or was it 290,000? I missed the exact figure. It is my understanding that, in the first quarter of last year, with which the comparison has been made by the Minister, there were 248,000 new entrants. The Minister spoke of new jobs, but our impact assessment is on new entrants to the market and there were 248,000 in the first quarter of last year. If the 90,000 refers to new jobs as opposed to new entrants into the workforce, that is a different comparison.

[Lord Leong (Lab)]

I thank the noble Baroness for giving me the opportunity to say this again. In the first quarter of 2025, the UK saw 90,000 businesses created. Business creation was up by 2.8% over last year, while business closures fell by 4.4%.

[Lord Hunt of Wirral (Con)]

My Lords, this has been such an important debate. We have been throwing statistics around the Chamber as if they had just been invented. The very latest statistic that I have in front of me, published in Business Matters, is that:

“Britain has recorded its highest number of company closures for two decades, with the final quarter of 2024 seeing 198,046 businesses struck off the official register”.


That is hot from the press. We have really been debating—

[Lord Leong (Lab)]

My Lords, I must challenge the noble Lord. There are many reasons for business closures. Companies get struck off for all kinds of reasons. Unless we drill deep down into what that figure is comprised of and whether the reasons are insolvency or companies being dormant, it will be difficult just throwing figures around.

[Lord Hunt of Wirral (Con)]

Is that not exactly why we need to measure the impact? That is what this debate has been all about. The Minister has done my job for me, but he has not accepted any of the amendments.

I thank my noble friend Lady Lawlor very much indeed, not only for the facts and figures that she gave us but for how she stressed that there has been, is perceived to be and is taking place an increase in the regulatory burden. Looking ahead, there are more compliance costs to come. Why does the Minister not accept that there is a need for an independent impartial measure? That is what these amendments seek. My noble friend Lord Deben, with all his unrivalled experience in building up businesses, is arguing that we need to check, to look ahead and to ensure that we can measure the impact of this legislation. Who is going to be right? The Government are saying, “Trust us, we’re right, we know what’s best, this will increase growth”. Yet their own impact assessment says that it will not.

Therefore, when you analyse all the facts and statistics that are coming forward, surely there is a very strong argument that we need an independent impact assessment. I agree with my noble friend Lady Verma that, if our roles were reversed and the Minister, with all his experience, was sitting on this side of the House, these are the amendments that he would be pressing for, because he knows how important it is to measure the impact of legislation and regulation. The noble Baroness, Lady Fox of Buckley, spoke of measuring what is happening now against what the Prime Minister promised in cutting the amount of regulatory burden and reversing the managed decline. It was good that she reminded us of those key words. Yet, as she said, this legislation is jam-packed with regulation. Her warning that this legislation is a recipe for lawfare is a warning to us all.

I agree with my noble friend Lord Swire that there is a need for a low regulatory framework at a time when our competitors are embracing artificial intelligence and all the new techniques while we are increasing the regulatory burden. I do not think that the noble Lord, Lord Palmer, got the answer that he was looking for from the Minister. Although he may not agree specifically with each individual amendment, he does believe that there is a clear message here that we must take on board.

--- Later in debate ---

[Baroness Cash (Con)]

My Lords, I support the amendment tabled by the noble Lord, Lord Sharpe, and the comments made by the noble Baroness, Lady Fox, who covered quite a few of the points I planned to make. I want to speak specifically about young people.

Speaking very recently in front of a committee, Employment Minister Alison McGovern said that

“the situation for young people is a big worry for me at the moment”

and that:

“A lot of our young people—nearly 1 million—are effectively on the scrap heap”.


Those are not words I would have chosen myself; they are her words to a cross-party committee.

We have heard a lot of statistics during today’s debates. I will just add a few more. There are 1 million people not in education, employment or training, which includes a lot of young people. In addition, we have massive numbers of people receiving sickness benefits. All these young people will be a risk for employers.

The Minister is quite right that there has been an uptick in new businesses starting, but there is a serious downturn in the number of jobs created; unemployment is rising year on year, month on month since this Government took power; and the tax rises in the Autumn Budget are beginning to really kick in. We have seen that in the written submissions by numerous business organisations to the Government, other groups and Peers in this Chamber, begging—pleading—with us all to make their case about the significant costs they are already facing due to the national insurance rises. We can see it in real time. This amendment is a request to monitor the situation and come back with an impact assessment on perhaps the most vulnerable people in our society.

To show that these young people really want to succeed and want to have an opportunity, I will read the Committee a couple more numbers that the Minister is probably already well aware of. Some 60% of young people under the age of 30 would love to start a business, 9% of them have done so and 18% more of them would like to do so this year. These are the most vulnerable young people in our society. They are our future, as our demographics are getting older, and we are going to become more and more reliant on the economy that they generate. I have said it before, and I will say it again and again in this Chamber: Governments do not create growth; businesses create growth. We are now looking to these young people to start businesses and take risks on employing others. I urge the Government to, at the very least, come back having monitored that there is no impact on them and no further impact on the loss of employment that could ensue.

[Lord Leong (Lab)]

My Lords, I am grateful to all noble Lords who have spoken. I refer to the point made by the noble Lord, Lord Jackson, about letters. I assure him that it is no coincidence that when we make a commitment and say that we will write, we write. I make sure that my officials write to everyone to whom I have promised a letter within 10 working days. If the noble Lord has not received letters from us, I welcome the challenge of being put on the spot to ask why the letters are not there.

I have a couple of points. I am a firm believer in social mobility. When I exited my business, some 20 years ago, I was very much involved in a social enterprise that went into state schools to ensure that state pupils were able to get out of their shell, be better and make something out of their lives. I am a firm believer in social mobility, and this Government take social mobility seriously. We do not just talk about it; we action it.

To support our commitment to ensuring that everyone, no matter their background, can thrive, we will commence Section 1 of the Equality Act 2010 in England:

“Public sector duty regarding socio-economic inequalities”.


As an example, the socioeconomic duty will require specific public bodies to actively consider how their strategic decisions might help to reduce the inequalities of outcomes associated with socioeconomic disadvantage. We are also now taking forward work to make sure that commencement of the duty in England is as effective as possible in driving efforts across the country to break down barriers to opportunity and making sure that there is no glass ceiling on people’s ambition.

I refer to the point made by the noble Lord, Lord Sharpe. We debated unfair dismissal and probation periods on day five of Committee, which was 21 May. We debated sick pay on days two and three of Committee, which were 8 and 13 May. We have debated some of these points at length.

I refer to the point made by the noble Baroness, Lady Cash, about some of the 1 million young people who are not in employment, training or education. We recognise that, and we are doing something about it. Since the general election, 500,000 more people are in work. At same time, we are improving access to NHS appointments; some 3 million people have been seen by medics in NHS appointments.

[Baroness Cash (Con)]

I would like some clarity regarding the employment numbers, because unemployment has been rising and is higher. We know from a number of City firms that graduates are struggling to get jobs, even in supermarkets. We have 33% fewer jobs for graduates. I just want the Minister to clarify the increase that he referred to and where that is coming from.

[Lord Leong (Lab)]

I thank the noble Baroness for that remark. I will get officials to write, setting out the detailed analysis of where this unemployment is and where new jobs are being created. I want to make absolutely sure that we get this right. We have already improved the NHS waiting list, and something like 3 million people have already accessed their appointments.

On the point about the impact assessment, which I will not labour, this analysis, as I have set up in many preceding groups, will be done. That includes social mobility. There is no point me standing here and repeating what I have just said. All this will be done. I therefore ask the noble Lord, Lord Sharpe, to withdraw Amendment 313.

--- Later in debate ---

The noble Lord also mentioned the Attorney-General’s much-praised Bingham lecture last November. In many ways, it is sad that the Attorney-General—who was in the Chamber earlier—is not here to give us his view of whether this conforms with the very high standard he set in that lecture. This amendment would do exactly what I would have thought the Attorney-General would like to see. It would give Parliament time to scrutinise changes, give businesses time to prepare and, probably most important of all for us as legislators, give us the opportunity to understand fully the real-world consequences, intended or otherwise, of these regulatory shifts. I strongly support these three amendments.

[Lord Leong (Lab)]

I am grateful to all noble Lords who have spoken. I thank the noble Lords, Lord Carter of Haslemere and Lord Fox, for Amendments 317, 326 and 329, and the noble Lord, Lord Palmer, for moving the amendment in the name of the noble Lord, Lord Fox.

Amendment 317 in the name of the noble Lord, Lord Fox, is on guidance for small businesses. Ensuring that businesses are supported to implement these reforms is fundamental to the successful delivery of the plan to make work pay. We have committed to providing guidance to ensure that all stakeholders have the information required to make necessary adjustments. We are engaging closely with employers of all types from a range of sectors to understand how the Government can best support them in their preparations.

Support may look different for different sectors, sizes of company, regions and so on. We want to make sure that we properly consider the needs of different employers and respond in the most effective way. This could include a variety of tailored guidance and support. The amendment risks preventing the Government taking the type of tailored approach that we hope will be most effective. Our forthcoming implementation road map will set out our plans for consultation and implementation of the Bill’s measures.

Our Employment Rights Bill delivers the most significant upgrade in employment rights in a generation, creating a modern, fairer labour market. We will continue to consult and engage to make sure we get delivery right. We will produce guidance, provide support, allow time to prepare, and ensure the enforcement landscape works. I make it clear that I agree with the noble Lord that it is in everyone’s interest that small businesses are properly supported to implement the Bill, and the Government are committed to doing so.

Amendment 329 from the noble Lord, Lord Fox, would make commencement of all the Bill’s measures contingent on the approval and publication of statutory guidance. This would unnecessarily delay commencement of measures that can be delivered more quickly. We are committed to supporting small businesses and will ensure that timely and targeted guidance is delivered where relevant.

I turn to Amendment 326 from the noble Lord, Lord Carter. I have read the entire Bingham lecture from my noble and learned friend the Attorney-General. Nowhere in his speech did he say that statutory instruments should not be used. As most noble Lords know, employment legislation uses true statutory instruments because they save parliamentary time, as mentioned in the Attorney-General’s speech, so that we can get more of this on the statute book.

I reassure the noble Lord that the Government have sought to limit the use of the Henry VIII powers within the Bill and believe our approach to their use is proportionate. I can also reassure the Committee that the Government already have robust plans in place to assess and review the impacts of this Bill. The noble Lord’s amendment would add unnecessary bureaucracy to this and other necessary powers in the Bill. It would also, in effect, duplicate work that the Government are already committed to undertaking.

Take, for example, the power in Clause 132(6). This allows the Secretary of State to update, expand or otherwise modify the list of bodies specified in Schedule 9 to the Bill with which information may be shared by the fair work agency. It is a Henry VIII power, subject to the affirmative procedure. The Government believe this is an entirely appropriate use of such power and the DPRRC also raised no concerns.

Specifically on the power in Clause 151, I reassure the noble Lord that, where possible, amendments to other pieces primary legislation that are required as a result of the Bill’s provisions have been made in the Bill itself. This includes amendments in Schedule 1 that are consequential on the provisions regarding zero hours in Clauses 1 to 5; those in paragraphs 5 to 19 of Schedule 3 that are consequential on the changes regarding unfair dismissal; and the provisions in Schedule 10 that are consequential on the provisions in Part 5. However, it is possible that further provisions will be identified that require consequential amendments. Allowing these to be made by regulations will mean they can be made without delay and with appropriate levels of parliamentary scrutiny. The power is constrained as it will allow amendments only where they are consequential on the provisions already made in this Bill.

Supporting employers to understand the requirements of the Bill is key to achieving the objectives of the plan to make work pay. I hope noble Lords are assured of the Government’s firm commitment to effectively and appropriately support stakeholders in preparing for employment rights reform.

This will be my last time speaking in Committee on this Bill, so—

[Lord Hunt of Wirral (Con)]

If this is the last time the Minister is going to speak, I should point out that he started off by telling us about the road map, which his noble friend promised we would see shortly. In his closing remarks, would he like to tell us when we will see it? Will it be tomorrow, or next week? We would like to see it as soon as possible; indeed, we would love it if he could publish it now, before he finishes his closing speech.

[Lord Leong (Lab)]

It is tempting, but I can assure the noble Lord that it will be published very, very, very soon. How is that?

Like I said, this is the last time I will speak in this Committee. I want to take the opportunity to express my gratitude to all noble Lords for their extensive engagement and the robust way in which we have debated this stage of the Bill’s passage. I pay particular tribute to the noble Lords, Lord Sharpe, Lord Hunt and Lord Fox, and to the noble Lords, Lord Goddard and Lord Palmer, for standing in so ably for him. Like the noble Lord, Lord Hunt, I wish the noble Lord, Lord Fox, well in his recovery and look forward to welcoming him back.

Let me be clear: this Government welcome scrutiny—that is the purpose of this House—but scrutiny must be grounded in the present and focus on the issues at hand, not lost in the echoes of decades-old political arguments. Some contributions, regretfully, seem to have been more intent on reviving grievances from the 1970s than addressing the needs of today’s Britain.

This Bill delivers on a clear manifesto promise. It is part of our plan for change, built not on rhetoric but on the practical need to provide security for working people and long-term renewal for the country. This is where our focus lies—not on refighting the past but on fixing the future. We continue to welcome serious challenge, and we expect debates to be robust, but we also expect them to be proportionate, honest and forward-looking.

As we approach the end of Committee this evening, we on this side look forward to constructive and collaborative meetings and engagement with all noble Lords ahead of Report. With that said, I respectfully ask the noble Lord to withdraw Amendment 317.

[Lord Palmer of Childs Hill (LD)]

On behalf of my noble friend Lord Fox, I thank the noble Lord, Lord Hunt, for his support, which was so eloquently put. I also thank the Minister for his detailed reply.

When the Minister started speaking, I thought he would use his valedictory remarks to say that he was actually going to agree with something. There was great promise that he would agree to the amendments—these reasonable amendments—as all they would do is give guidance to small businesses to show them what the legislation is. Then, I lost: he will step down without going out on a positive note, which is very sad. His argument was that all the amendment would do is delay things. Sometimes, delay is good. Delay can be good if you get it right. Too often things are done precipitately, and delay is the better alternative.

What is the answer from the Minister? We shall have more statutory instruments. I have dealt with statutory instruments in the 15 years I have been in this House. Quite honestly, we discuss them, but we never vote. There has been no vote that I can remember, and statutory instruments are a means for the Government to tell us what they are going to do, and we have to nod in agreement.

Where do small businesses stand in all this, without any real guidance? They are left in a morass. The Minister has gone off in a cloud of glory, but I still do not have an answer as to whether anything will be implemented. Sadly, I beg leave to withdraw the amendment of my noble friend Lord Fox.