Employment Rights Bill

Debate between Lord Moynihan of Chelsea and Lord Evans of Rainow

Committee stage
Tuesday 29th April 2025 Lords Chamber

[Lord Evans of Rainow (Con)]

My Lords, I will speak briefly to Amendment 1 from the noble Lords, Lord Fox, Lord Sharpe and Lord Hunt. Paragraph (c) would

“make provisions about pay and conditions in certain sectors”.

My noble friend Lady Stowell of Beeston made some very good points about the tech sector—those entrepreneurs and businesses of the future. It was very important to hear what she had to say. However, I wish to stand up for the hospitality sector. Do any of the Members opposite know what it is like to run a hospitality sector business and the challenges of employing people to cater and serve in that sector?

UKHospitality recently launched the social productivity index, which shows that the hospitality sector is also a key driver in socially productive growth, not only contributing to economic expansion but fostering social mobility and regional development. With 57% of the workforce working 30 hours or fewer per week, the sector offers flexible employment options that make it particularly accessible to students, carers and parents—I do not know how many noble Lords in this Chamber today at some stage in their career worked in hospitality, but it is an excellent first opportunity to get into the world of work.

Unfortunately, in broad terms, the proposed changes in the latest set of amendments to the Bill seem destined to result in a framework of requirements that are more likely to hinder than to promote growth in the hospitality sector. In particular, without further addressing the concerns of businesses and considering alternative options, it is felt that the Bill is likely to lead to reductions in staff recruitment, the rate of wage growth and the level of investment. The Bill looks likely to hinder hospitality businesses and restrict growth. It seems to assume that all employers are bad actors with regards to their dealings with their staff. This is patently not the case for the majority of businesses, which recognise the need to recruit and retain staff and ensure they are supported and secure at work.

There still appears to be a disregard for seasonal business models and unpredictable trading in sectors such as pubs and wider hospitality businesses, which are required to adapt quickly to changes in trade patterns determined, for example, by weather or other events outside their control. A reduction in businesses’ ability to respond quickly and proactively to changing demand will undoubtedly result in higher operating costs. That will naturally need to be met by either increasing prices, reducing other staff costs or reducing investment.

These impacts are compounded by the Budget announcements on employer NICs and national living wage rates. Spiralling employment costs will be exacerbated by the additional cost and administrative burdens that the Bill will layer on top, all impacting investment and growth. The unintended consequences of this Bill are slower wage growth and recruitment. I am sure the Minister does not intend that to be the case. Can she reassure the Committee that it will not be the case if the Bill goes ahead as it is?

[Lord Moynihan of Chelsea (Con)]

My Lords, I support this important amendment and endorse the serious concerns just now expressed by the noble Lord, Lord Fox, and my noble friend Lord Hunt of Wirral. I declare my interests as a businessman, an entrepreneur and an investor.

The noble Baroness, Lady O’Grady of Upper Holloway, questioned the need for a stated purpose for the Bill. I am not sure what the logic is there: the most likely reason for a Bill having no purpose is a lack of clarity by its sponsors as to what they are trying to achieve. The noble Baroness, Lady Carberry of Muswell Hill, complains that the list stated in the amendment is non-exhaustive, which I agree with, and then somehow jumps to the conclusion that no list at all would be preferable. Again, I am afraid the logic of that escapes me.

I am far less experienced than my noble friend Lady Neville-Rolfe, but I feel that there is always an obvious advantage in having a purpose clause. In the case of this Bill, I am sure the Government must agree that those who will face the task of interpreting the meaning of the Bill in the future should be given as much clarity as possible, through a purpose clause, as to why the Bill was passed and what its purpose was. Courts in the future will far prefer to have a lucid statement of what the new law sets out to accomplish, rather than being given too wide latitude and freedom to interpret the Bill in this way or that. So I commend the overall objective of the noble Lord, Lord Fox, and hope that the amendment, or similar, will form part of the eventual Bill.

This very lengthy Bill will, if passed without a purposes section, be more open to abuses of the extensive powers it contains. This amendment would put a few appropriate, albeit modest, restraints on the ability of a Government to go too far in applying these powers. To be clear, this proposed purpose clause from the noble Lord, Lord Fox, is just a start and, for me, not completely satisfactory by any means. The list is indeed not exhaustive. In addition, the additional amendments would burden companies with yet another compliance code of conduct, which will serve to send sensible non-executives screaming from the room and possibly off to Dubai. We have to let boards focus on managing their businesses, serving their customers and making sure it is a well-run business, not having to implement new compliance code after new compliance code that will only ever be observed with lip service.

On this point of a non-exhaustive list, I wish to add to the list of purposes of the Bill, in addition to the wording that my noble friend Lady Neville-Rolfe suggested, an additional purpose of supporting, improving and not reducing flexibility in employment relationships. We will move on to the issue of flexibility in the next group of amendments, so I will not expand on that point here, but I recommend the addition of that purpose, as well as the wording proposed by my noble friend Lady Neville-Rolfe, to the list in Amendment 1.