Employment Rights Bill

Lord Stoneham of Droxford Excerpts

Committee stage
Monday 16th June 2025 Lords Chamber

[Baroness Coffey (Con)]

My Lords, jumping to Clause 92, I shall start by addressing Amendment 271ZZB in my name. It refers to the annual report that the Secretary of State would be expected to make on the extent to which they have undertaken the enforcement functions. I have a particular problem with suggesting that it is acceptable to have in primary legislation:

“As soon as reasonably practicable after the end of each financial year”.


There have been plenty of other reports which say that things will not fit the grid slot, or that all these other things that get in the way. We get promised a child poverty strategy, then we discover it will arrive probably about seven months after originally planned. Those sorts of things are the reason I have simply suggested that this should be done within three months. I have seen that happen for other things, such as the Environment Act, where a specific timing is put on reports. To me, this is no different in that regard, so something as sloppy as that should not be left in the Bill.

Clearly, we are now on to Part 5, a really chunky part of the Bill that deserves detailed consideration. The previous Administration started this idea of bringing together the different enforcement bodies, and I think everybody is united on this. It is noteworthy that the Labour Government, in the variety of papers they have put out, say that they are going far further than any of that. That is why this needs careful consideration.

In this Bill, not only do we see significant changes in employment rights and in the scope of what is here, but, as has been pointed out, this is also a radical change in who gets to do it. As the noble Lord, Lord Carter of Haslemere, pointed out, I would be interested to find anywhere else within government—perhaps the Civil Nuclear Police and the Armed Forces—that would have this level of direct control by the Secretary of State.

That said, I will explain why I have some sympathy with the Government in how they are going about this. I am also very struck by Amendment 269, tabled by my noble friend Lady Noakes. Setting out the advice the board has given to the Secretary of State would not be unprecedented, because this is exactly what the Office for Environmental Protection does on matters involving environmental legislation. By the way, Ministers are not expected to ask—nor do they have to ask—the OEP for advice, but they can. However, the OEP can and does publish the advice that it gives, solicited or not. That open transparency, to which my noble friend Lady Noakes referred, in how these powers are being used would be welcome to give confidence in this new body. We will be debating, perhaps on Wednesday rather than today, why I think some of this is so novel. It certainly merits all that scrutiny.

More broadly, I completely understand what the noble Lord, Lord Carter of Haslemere, is saying about the extent of the powers being given. I have some sympathy and, in another group, I talk about these enforcement officers—who used to be known as labour market offence officers—and combining all these different agencies and how that comes together. For example, the Environment Agency is a regulator that has powers to investigate criminal offences. It started an investigation on 18 November 2021, and at no point would it ever brief Ministers on the progress or intimate details of that investigation. To this date, it still has not brought any charges. We recognise that the public expect somewhat more of Ministers nowadays, powers having been set out, and that it is possible for all these things to happen. If Ministers are then, effectively, locked out from what is going on in terms of this operational independence, I can understand why they are keen to have a closer relationship with what is going on.

I will explain this in more detail in the other group, but having it as an executive agency with this advisory board provides an element of scrutiny but not the independent oversight, which is why the framework to which the noble Lord, Lord Carter, refers is important in trying to get this balance in whether people are behaving themselves in applying the law. I am not suggesting that any civil servant or any enforcement officer would necessarily want to go rogue, but they would have that extra oversight, with such significant powers. Let us be candid: a Secretary of State does not have the time to go through every single assessment of every operation that would be expected under the widened scope of legislation that this new agency will be enforcing.

I have some sympathy with the noble Lord, Lord Carter, who wants to see a pretty tight grip on what is going on, but I understand why the Government have set it out in the way that they have. Nevertheless, as my noble friends on the Front Bench pointed out, that aspect of oversight is important. As has been explained, considering how small businesses will handle this gets us into pretty tricky stuff.

By the way, I fully supported the development of the Gangmasters and Labour Abuse Authority. That is where a lot of the powers that may seem pretty tough in this Bill originated. How can I put it? Some people, whether in aspects of modern slavery or otherwise, can be pretty tough employers. I understand why some of what is, in effect, emergency access to offices and documents is needed: to make sure we tackle the abuse of workers. Overall, however, this is going to be a sensitive area. I encourage the Government to be as open and transparent as possible, and to consider not only the level of scrutiny but also the transparency in terms of reports—which would be, I am sure, welcomed by the Government and, candidly, by people relying on these agencies to do this work for them in the future.

[Lord Stoneham of Droxford (LD)]

My Lords, my noble friend Lord Goddard is disappointed that he is unable to speak on this group this evening. Given the multiple groups of amendments concerning the fair work agency, we will restrict our comments to this group. The Department for Business and Trade has set out the rationale for the fair work agency, suggesting the current system of employment rights enforcement is fragmented and inefficient. We agree. This fragmentation causes confusion for both workers and employers and leaves many breaches, such as underpayments, unchallenged. The Bill aims to establish the fair work agency and will consolidate existing bodies responsible for enforcement, abolishing those authorities and transferring their functions.

However, there remains some uncertainty about the agency’s precise scope and responsibilities, how it will relate to existing organisations, the level of funding it will receive, how it will access and use data, and the mechanisms for compliance and oversight. Although the Bill includes data-sharing provisions and the Minister has highlighted further detail, these issues will be key in determining the agency's effectiveness.

On powers and oversight, many enforcement powers currently held by other bodies will be transferred to the fair work agency, including powers of entry. New powers, particularly in relation to HMRC, will also be introduced. Oversight of these powers is planned to be provided through independent policing standards authorities, but it is important that the limits to these powers are clear and that they are exercised proportionately.

Regarding resourcing, it is understood that around £600 million is currently allocated across the authorities being restructured into the new agency. I am sure that discussions with the Treasury on the appropriate level of funding are ongoing, but is the Minister confident that this figure will provide the resources needed to meet the scale of the agency’s mission?

Bringing enforcement functions together in the fair work agency should improve the Government’s ability to tackle labour market abuses, including serious issues such as modern slavery. It is also acknowledged that previously, fragmented responsibilities caused confusion, duplication and ineffective enforcement, so this consolidation aims to provide a clearer, stronger enforcement framework.

I will not speak at length on the amendments put forward by the noble Lord, Lord Carter, but what he said was very wise. He raised important questions about the advisory board’s composition and enforcement powers which deserve further consideration by the Minister and the Government. Given the wide-ranging powers the agency will have—from workplace inspections to civil penalties and criminal enforcement orders—it is only right that Parliament has a clear opportunity to scrutinise how these powers will be used in practice.

Before the agency becomes operational, there should be clarity around its remit, resourcing and relationship with other enforcement bodies, and around the structures of accountability that will apply. This is particularly important for small and medium-sized businesses, which often lack the internal capacity to navigate complex regulatory frameworks. Advance scrutiny and a clear published framework would offer reassurance to both workers and employers that the agency’s approach will be proportionate and well targeted. We would welcome the Minister’s further explanation of how the Government intend to maintain transparency and accountability, to ensure balanced representation on the advisory board, and to keep Parliament informed throughout the phased implementation of the fair work agency.

Finally, I seek clarity on the Government’s timeline for the agency’s full implementation and how they plan to keep Parliament updated on progress. These are significant institutional changes and deserve close attention. I look forward to the Minister’s response.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)]

My Lords, I am grateful to all noble Lords who have tabled amendments in this group, all of which pertain to the governance of the fair work agency and its relationship with government. While I appreciate and respect the spirit in which they have been made, I must set out why the Government do not believe they are necessary or appropriate.

Amendment 263ZA in the name of the noble Lord, Lord Sharpe, has good intentions; however, in practice, it introduces unnecessary rigidity into a system that already works effectively. Currently, enforcement officers undergo extensive training; for example, HMRC officers complete an 18-month programme that equips them with the skills and knowledge they need. This is a robust and proven process. There is no evidence that adding a legislative requirement for qualifications would improve outcomes. Moreover, this amendment would reduce flexibility. It would impose a legal burden that could hinder recruitment, especially when enforcement needs evolve rapidly. Finally, it is important to note that Clause 87(6) already gives the Secretary of State the power to specify which powers an officer may exercise in the appointment. This ensures appropriate oversight and safeguards without the need for additional legislation.

Similarly, Amendment 263ZB, also tabled by the noble Lord, Lord Sharpe, is, in practice, unnecessary and creates duplication. The powers granted under the Bill already require enforcement officers to provide written notices such as a notice of underpayment. These are not optional; they are embedded in the operational framework. Moreover, current enforcement bodies such as the Employment Agency Standards Inspectorate already maintain detailed records of inspections. Officers also operate with a strong emphasis on consent and co-operation, often arranging visits in advance and documenting their findings thoroughly. Introducing a statutory requirement for additional reporting and oversight risks creating administrative burdens without adding meaningful value. It could divert resources away from enforcement and into bureaucracy. This amendment seeks to legislate what is already standard practice; it is not needed in the Bill, and I urge noble Lords to reject it.

Turning to Amendment 263C, the Bill already provides limitations on what powers officers can exercise through letters of appointment. I appreciate the noble Lord’s desire to ensure that enforcement officers exercise powers in a way that minimises disruption and harm to individuals and businesses, particularly as they will be extensive powers. This includes their powers to enter premises to determine whether there has been non-compliance. However, while these powers are by nature disruptive, they will be required to be exercised proportionately and reasonably, and, where possible, officers will carry out their duties on a consensual basis. In practice, this means officers will correspond with a business in advance to arrange a reasonable time and date before they visit, and they will also generally enter during business hours.

It is also worth noting that we are setting up the fair work agency as an executive agency of the Department for Business and Trade. Enforcement officers will therefore be civil servants who are subject to the usual standards of public life and will be required to operate in line with the Civil Service Code. The fair work agency will take a balanced approach to carrying out its role. This is in everyone’s interests.

Future of the Post Office

Lord Stoneham of Droxford Excerpts

Monday 18th November 2024 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My Lords, I thank the Minister for the Statement. Like my honourable friend Andrew Griffith in the other place, I am pleased that the Government are building on the work of my right honourable friend Kevin Hollinrake to hasten the payments to the victims of the Horizon IT scandal. I am grateful to the Minister for this important update. Will she commit to regular updates going forward?

We learned with regret last week that the Post Office feels that it has no choice but to make radical decisions, announced by the chairman in the transformation plan, to reduce costs. We are told that this potentially threatens 115 branches and 1,000 jobs. This news prompts a variety of questions to the Minister. First, the Statement makes it clear that the Government expect the Post Office to consult postmasters, trade unions and other stakeholders. How disappointing that the communities that rely on these services have not been specifically mentioned. Surely the Minister agrees that the Post Office’s customers are an important group that should be consulted. Can the Minister therefore reassure the House that where closures are threatened, local communities are fully involved in the consultation process? Can she also assure the House that this will not herald another front in the Government’s current assault on rural communities, as epitomised by the family farm tax, and that the Government will review the family farm tax and other measures that affect rural communities to see how we can better support them?

In announcing these plans, the chairman of the Post Office said that the changes to national insurance in the Budget have made business more difficult for post offices. Can the Minister tell the House whether an impact assessment on the changes announced in the Budget for the Post Office was prepared and, if not, why not?

Business rates and national insurance contributions are going up. The threshold for paying them is going down, and obligations around the minimum wage are going up. It is impossible to conceive that, taken individually, these measures have not had some impact on all small businesses, but collectively they are devastating. As I do not believe that the Government would have been irresponsible enough to make these changes without assessing their likely impact, can the Minister commit to publishing all impact assessments?

The Post Office chairman made clear that his plans are subject to government funding. Can the Minister make a commitment that such funding will be forthcoming? Business rightly hates uncertainty.

Finally, it is welcome that the chairman has committed to increasing the number of banking hubs to 500 by 2030. We welcome that but, as my honourable friend in the other place noted, the devil is in the detail. I will repeat his question: has the Minister engaged with colleagues in the Treasury to discuss the impact of last week’s news on the banking framework negotiations, which are essential to underwrite this rollout of hubs?

[Lord Stoneham of Droxford (LD)]

My Lords, I welcome the noble Lord, Lord Sharpe, to his new Front-Bench role. The Post Office organisation is another problem area left by the previous Government. The Horizon compensation payments are still moving too slowly; there is confusion over the new IT systems in the Post Office; and the Post Office has been suffering from a lack of leadership for an organisation dealing with severe competitive pressures. Now we face, in recognition of high overhead costs, the announcement of the possible closure of 115 Crown post offices, with further damage to our high streets.

I have two initial questions. First, are the Government looking at simplifying the Horizon compensation process and speeding up decision-making? Secondly, is the expectation that many of the Crown post offices will be replaced by sub-post offices and franchise operations? On high streets and in rural areas, long-term sustainability of the post office network is vital to many communities, not least for those who cannot currently use digital alternatives to the post office services for cash, banking and financial services. Liberal Democrats have put forward proposals for the mutualisation of the Post Office. This would also give sub-postmasters more independence and control. It is welcome that the Government have announced broader reforms for the organisation and will publish a Green Paper next year. Can the Minister assure the House that this will include consideration of how mutualisation could ensure that the Post Office is fit for the future?

Will the Government also take this opportunity seriously to consider how to strengthen the role that post offices play in our communities so that they can offer more local services, from community banking to government services?

During many of the Horizon debates, when the Government were on the Opposition Benches, speakers often reminded us that then Ministers were the owners of the Post Office. The Secretary of State has levers to pull, so the fundamental question is how the Government choose to use this leverage now. Can the Minister confirm that the Government will use this ownership to ensure that, whatever happens, local communities will continue to have long-term access to Post Office offerings—all the services, including DVLA and passport services, that currently are on offer?

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)]

My Lords, I also welcome the noble Lord, Lord Sharpe, to his new role. I look forward to working with him on the many issues that we will no doubt discuss. I am pleased to have this opportunity to keep the House updated on the future of the Post Office, but before I start it is worth reiterating the point made in the Statement:

“the Government inherited a Post Office that is simply not fit for purpose, following”,

frankly,

“disinterest from the previous Government, a toxic culture in head office and years of under-investment”.—[Official Report, Commons, 13/11/24; col. 806.]

That is the legacy we are now grappling with.

I would like to keep the House updated on the need very urgently to ensure that all postmasters who have been victims of the Horizon scandal get full and fair redress. Anyone who has heard some of the individual stories will know how difficult it has been for affected postmasters. It is important that the Government deliver on this commitment to speed up the delivery of redress. This issue is occupying us, and we are determined to resolve it.

Noble Lords will know that the number of cases settled with full and fair compensation has nearly doubled in the past four months since the Government came to power, compared with the four months prior to that. We have also taken steps to make it easier for postmasters who were victims in this scandal to get full and fair redress quickly, not least by fixing some payments for those applying under the Horizon shortfall scheme and for those applying under the Horizon convictions redress scheme, which was launched in July. Nevertheless, we need to do more, and I assure noble Lords that we have our foot on the accelerator.

The noble Lord, Lord Sharpe, asked about the Budget. Clearly, we had to make tough choices in the Budget to fix the foundations of our economy and restore economic stability. We make no apology for that. The alternative to taking action was more economic instability, more austerity and more decline. There are mitigations in place to protect small businesses. These include an increase in and expansion of the employment allowance to simplify and reform employer national insurance contributions. There is also a permanent reduction of 40% of business rates relief for eligible retail properties.

On who was consulted and whether the Government engaged with the Post Office on its strategic review, Ministers have of course been kept informed and have met with Nigel Railton, the new chair. His announcement clearly sets a useful ambition for the future of the Post Office, but these changes depend on funding, which will be discussed through the spending review. The noble Lord, Lord Sharpe, asked who will be consulted. As we have made clear, it will be all stakeholders. That will include any of the communities that might be affected, but no decision has been made on any of those potential closures. We very much hope that alternative activities can be found for all those post offices so that they can remain in business, but the noble Lord will know the difficulties in all that because they are currently making a considerable loss. Nevertheless, we will consult.

The Government have a manifesto commitment to look for ways to strengthen the Post Office network, in consultation with sub-postmasters, trade unions and customers. The Post Office is required by government to maintain a network of 11,500 branches; the Post Office has confirmed that its transformation plan will not impact that commitment.

On the long-term future of the Post Office, the Government are clear that there is more that can be done and we will be considering what customers, communities and postmasters would like to see from a modern Post Office network. The noble Lord rightly said that there is a future; we see a good future for post offices, not only increasingly as banking hubs, potentially, but in providing a means for people to access all the public services the noble Lord mentioned. So there is a good, strong future if we can get the Post Office’s finances on an even keel.

The Post Office’s directly managed branches, which are the loss-making element, need to be addressed. The Post Office is in dialogue with the unions and postmaster representation bodies about future options for those branches. As I say, no decision has been taken by the Post Office on any specific locations and, whatever the outcome, the Post Office will continue to deliver a network of at least 11,500 branches, as required by the Government.

The need for rural provision is a point well understood by the Government. We recognise the important role that post offices play in their communities, and it is clear that branches in some rural areas often play a particular role as community hubs. Mr Railton’s announcement is not about changing the access criteria that the Government set for the Post Office, which would ensure a network of branches across the country, including in rural areas.

Finally, the noble Lord raised the issue of mutualisation. The Government have made it clear in our manifesto that we will look for ways to strengthen the Post Office network in consultation with sub-postmasters, trade unions and customers. Our department is working on this at an early stage, and a wide number of options are being explored, including long-term structural options such as mutualisation.

I stress again to noble Lords that we see a positive future for the Post Office network. This is not a question of managed decline; it is a positive vision for the future. We just need to get the nuts and bolts right at this stage.