Employment Rights Bill

Lord Deben Excerpts

Committee stage
Thursday 8th May 2025 Lords Chamber

[Lord Moynihan of Chelsea (Con)]

My Lords, I would like to add to what the noble Baroness, Lady Fox, said. We are having a good debate and I very much hope to keep it friendly. What the noble Lord, Lord Davies, and the noble Baroness, Lady O’Grady, said, was really rather flying pigs.

I, obviously not like most of the Committee, am old enough to remember the 1970s. I remember the destruction of the British automobile industry by the trade unions. London docks was destroyed by the trade unions. This led, through the 1970s, to the “winter of discontent”, which led to the necessary emergence of a Government under Margret Thatcher who sought to control the trade unions and do something about the destruction they were wreaking on the British economy. We all remember that; I am not fantasising about this. This 150-year story of the great things wrought by the trade unions is really difficult to let go by without saying something.

Right now, only 22% of workers in the UK belong to unions. Why is that? It is because of the destructive nature of those unions. Let us remember that, of that 22%, most are in the public sector. Public sector workers have a monopoly in the areas they occupy and in return are being rewarded by a Labour Government. We saw the sorts of rises, which were completely unjustifiable compared with what people in the private sector were earning, that the Labour Government awarded many public sector trade union workers when they came to power.

We saw how there is—I am not saying anything we do not all know—a wonderful relationship between the unions and the Labour Party. I saw a number—I do not stand here asserting it is true, but I saw it and it seems reasonable—that, since 2011 the trade unions have given £31 million to the Labour Party. Whether that is true or not, we know the figure is of that order. This is wonderful, but it increases the size of government, because of the deals the Labour Government have to make with these trade unions. It increases the cost and complexity of government, and it increases in general the cost of regulation to all employers.

All those things destroy the economic growth which, as the noble Lord, Lord Goddard, said earlier, we are all trying to achieve. I ask the Government please not to give us guff—I hope it is not unparliamentary to say that—about the positive effects of the trade unions. They are destructive.

[Lord Deben (Con)]

My Lords, I wonder whether we are having a discussion for 2025, or one that is deeply mired in history. I find myself in some difficulty listening to either side of this discussion. I say very strongly that trade unions have been, and are, very important, but I also hope that people who watched the annual conference of the National Education Union, all of whose officers have the support of the Socialist Workers Party, may ask why a union like that should have spent more time talking about Gaza than it did about school attendance. We cannot be entirely happy about the circumstances of all trade unions, and this Government are going to have to face those trade unions pressed from that way.

On the other hand, I deeply disagree with the attitude we have just heard about trade unions being destructive. Trade unions have been very constructive in many circumstances, and this is something we should recognise. My problem with the Bill, and my reason for coming to this debate to support my noble friend’s amendments, is related to what the noble Lord, Lord Davies of Brixton—who opened the Back-Bench remarks—said about trade unions: that they were not forced on anyone. They were created by people coming together to work for better attitudes, better conditions and better pay for working in those circumstances.

If people want to do that but want to be independent and not subject to their employers—as the noble Baroness, Lady O’Grady, fears—and if they do not want to be called a trade union, then we ought, in 2025, to give them the powers to make the same kinds of arrangements with employers as a trade union. If we do not do that, this is going to be the one area where this Government will say there shall be no competition or opportunity for people to make a different decision about their future.

We ought to give people that opportunity, and we ought to protect those people by making sure that it is given to them only if they are independent, pay for it themselves and have chosen that particular mechanism. I say to the Labour party Front Bench that none of us who work—as I still do, happily—right across the board with all kinds of companies can think of today’s industry and commerce as if it were like yesterday’s. There are new circumstances and new ways of doing things, and the Bill ought to recognise that. If all it does is solidify the past, we will have missed a great opportunity.

[Lord Davies of Brixton (Lab)]

Before the noble Lord sits down, let me just explain that if an organisation meets the requirements to be free and independent, it is a trade union. Anyone can set up a trade union. If it does not meet the standards—many of which have been set by the party opposite—it is not a trade union and it is not capable of collectively representing its members. There is an illogicality in suggesting that an organisation that is not meeting the standards of a trade union can represent its members.

[Lord Deben (Con)]

If that is so, it is very simple: we can all agree to this amendment, with such alterations as are necessary, to make sure that they are independent. Then we can all feel that we have created an answer that suits today. Can we please get out of this yah-booing from both sides—and I mean both sides—about these issues? We have to find a way in which the whole of society can come more effectively together, without constantly determining that we have to do it like we did 100 years ago.

Employment Rights Bill

Lord Deben Excerpts

Committee stage
Tuesday 3rd June 2025 Lords Chamber

[Lord Deben (Con)]

My Lords, I hope the Minister listened with great care to what my noble friend said. I declare an interest as a partner in a small farm. I was walking the fields only yesterday, looking at the disastrous effects of the fact that we have had practically no rain. It is not much more than a year ago that I had to look at the disastrous effects of having too much rain. We are an organic farm, and therefore we have looked after the soil very carefully and suffered less than others during that period. But many farmers were not able to get a harvest or plant because the weather was so bad, and they therefore lost two years.

I believe that we have a real problem of diversity here. We often talk about diversity as if it is about race or ethnic minority, but it is so interesting that no member of the current Cabinet represents a rural constituency or is, as far as I can discover, a country person at all. There are 9 million people who live in the countryside and who are hardly represented at all. To be perfectly fair, the shadow Cabinet does not have, as far as I can find out, anybody who is a country person of the sort we are talking about. This is something that has happened to our society, and we who are country people find it extremely difficult. Therefore, I want to say to the Minister, who is known for his generosity, that it is crucial for this Government to show that they are listening to and thinking about this section of the community.

The seat that I once represented is now represented by a Labour Member. She must find it very difficult to appeal to many of the people who voted for her because it does not appear that the Government whom she supports have really understood how the countryside works—in other words, what agriculture is. I could, of course, make a great statement about the terrible situation of the IHT changes, which were rather peculiar given that no previous Labour Chancellor has ever thought them a good idea. I could make all those arguments, but I want to tone down what I might have said to one single concept: Governments can get the support of the nation only if the nation feels that they understand it—not just bits but the whole of it. The introducer of the previous amendment, who I am afraid is just leaving—I was going to be polite about it—rightly talked about the Bill having to represents both sides of industry. I ask that the Bill also represents different parts of industry, and one of those parts is the rural agricultural scene. My concern is that this has not been looked at through the eyes of the countryside.

It may be that, when the Government do that, they do not want to make any changes, but it does not seem possible for the Government to convince people that those changes are not necessary unless they have done what Amendment 133 asks them to do. All we ask is that the Government look in detail at the effect of the Bill on the agricultural industry.

In ending, I want to say something true and really serious. We are entering a period in which food security will be crucial. Climate change means that we will have less and less opportunity to import from wide areas of the world. I remember, when I was Minister of Agriculture, being interviewed by the cleverest man in Europe, Peter Jay, who said, “We don’t need a Minister of Agriculture because we’ll always be able to import food from somewhere else”. How madly wrong that was. Climate change will mean that we find it more and more difficult to fill our shelves at home. Nothing undermines a Government more than two or three days of people being unable to eat what they want to eat.

Therefore, I say to the Government that I hope that this is a helpful amendment—and, if the Government say that they will not do what it asks, that says something to the 9 million people who live in the countryside and, even more, to the many people who keep food on our plates. No farmers, no food. If farmers are to do the job properly, the Government have to recognise that the weather that farmers deal with, which has always been the thing that is different about agriculture compared with any other industry, is now going to be a difference that is made very much worse, as we have worse and worse examples of more extreme weather. In general terms, the Government—unlike other parties—have been extremely good on climate change and I ask them not to let themselves down on this but to say, “Yes, we will look and see exactly what these provisions will do for agriculture—and, if we find that they need alteration, we will be able to come back with the facts”.

[Lord Roborough (Con)]

My Lords, I support Amendment 133 from my noble friend Lord Sharpe of Epsom. It is a great pleasure to follow my noble friend Lord Deben. In doing so, I draw attention to my registered interests, in particular as a dairy and livestock farmer.

I am most grateful to my noble friends for their supportive comments for British farmers. I have asked in Written Questions and in debates whether the Government would commit to keeping detailed and timely data on the number of farmers and family business owners taking their own lives in the run-up to the introduction of the reduced inheritance tax reliefs, due in April next year. So far these requests have been denied or ignored. We know that a number already have taken that dreadful step—and, as the deadline approaches, the risk will only rise. It would appear to be callous in the extreme that the Government refuse to take responsibility for this tragic human cost of their Budget decisions. Will the Minister commit to keeping and publishing the data in a timely manner?

Farming has unique employment challenges, as others have already mentioned in this short debate—and as indeed the whole country is now aware, thanks to the popularity of “Clarkson’s Farm”. Arable crops and silage need to be harvested when the weather allows and when they are ready for harvest. This leads to high-pressure operations at short notice and often at anti-social hours. It is not unusual to see harvesters and wagons operating well into the night until the dew starts to form. If staff are not available to operate that equipment at the optimum time, it can lead to reduced yields, higher drying costs or even the failure to harvest a crop at all.

In the livestock and dairy sectors, staff are also required to be available to work flexibly. In livestock, this can mean being available for callout to inspect the health of animals, assist in lambing and calving, and recapture escaped animals. In dairy, cows need to be milked at regular intervals from one to three times a day, depending on the system being employed. If that regular schedule is not followed, animal health can be threatened and milk yields suffer.

In the fruit and vegetable growing industry, the fruit and vegetables need to be picked when ripe and when the market demands it. Contracts governing the supply of these goods to retailers and processors can be highly onerous and punitive when conditions are not met. It is essential for this industry that it can employ workers to meet these needs and contract terms.

Unfortunately, agricultural employers need to have staff who are committed to working flexibly, and access to staff who are willing to work when the work is available. The Bill makes it more difficult for employers to refuse employee submissions for flexible working requests. While these submissions can already be made from day one, employers can refuse them on the grounds of inability to fill the gap from reduced hours, or the detrimental impact on business performance or meeting customer demand. The higher bar set by the Bill is likely to make it harder to protect the business.

The Bill applies unfair dismissal rights from day one of employment versus the two years currently in law. We are yet to see the timetable to be proposed, creating significant uncertainty. I have first-hand experience of the damage that a new, unsatisfactory employee can do to a business, even without any malice, and being able to remove them at short notice when the poor performance is revealed is critical. In that case, due to the nature of dairy farming, it took over a year for the poor performance to come to light. The widespread industry reliance on casual workers is threatened by restrictions on zero- and low-hours contracts and the potential for those to obtain a right to guaranteed-hours contracts.

Paying fees for cancellation of shifts at short notice is also impractical in farming. While it is easy to see why the Government might want to penalise employers for potentially capricious and harmful decisions around shifts, the timing of work in farming is often not predictable. Therefore, it does not make sense to penalise farmers even more than they are already for changing weather.

The Bill is a massive threat to the viability of British farming. The extent of that threat will be known only when the Government have decided when employees’ probationary periods will end, when a casual employee gains permanent employment rights, and when notice has to be given of a shift cancellation. I ask the Minister why this work has not been done already and why are we debating a Bill when the extent of its negative impact is unknowable.

The English farming industry has been targeted by this Government, with dramatic reductions in delinked payments, the abrupt cancellation of SFI applications, the imposition of inheritance tax and the withdrawal of the rural services delivery grant being the highlights. We now read in the papers that the spending review is likely to slash the farming budget, offering little hope that government support will improve. Farmers also now face greater competition from heavily subsidised overseas farmers with little or no environmental obligations. On top of that, as my noble friend Lord Deben highlighted, our arable farmers are struggling with low crop prices and extremely dry weather damaging yields.

Let us at least accept this modest amendment to the Bill to allow an open appraisal of the impact on the sector after a full annual cycle, when the terms of the Bill are fixed and in force, and ensure that the information is available to make changes that might prove necessary. This Government have claimed to be pro business and pro growth. Will they, at last, show some support to this business? I hope that the Minister will listen to this debate, depart from his brief and offer encouragement.

Employment Rights Bill

Lord Deben Excerpts

Committee stage
Tuesday 24th June 2025 Lords Chamber

[Baroness Lawlor (Con)]

My Lords, I support this group of amendments in the name of the noble Lords, Lord Sharpe of Epsom and Lord Hunt of Wirral, calling for an impact assessment requiring an independent analysis on different measures. I have added my name to three of them. Amendment 310 asks for an impact assessment on business, new entrants and start-ups, while Amendment 311 asks for a productivity impact reporting, and Amendment 319 asks for a new clause on assessing the impact of the regulatory burden on businesses.

Amendment 310 would require an impact assessment on new business entrants and small start-ups, including the impact of administrative and financial costs. Why do we need this? We know from ONS data that the story of business start-ups from 2016-17 to 2023-24 was one of steady increase, from 664,750 new start-ups in 2016-17 to 800,000 in 2022-23. We know from other data, from an analysis for NatWest bank and the Beauhurst Group, that for the last calendar year 846,000 new businesses were registered, bringing the total to a record high of 6.63 million last year. Just under one-third of that, 248,000, in the first quarter was, sadly, a figure not sustained by the end of the year, with a 25% drop in business formation as the year progressed.

Of course, headline figures should be read with caveats entered. Here are just three. Quite a few new companies do not survive their first or indeed their second year. One tech and computer entrepreneur once told me that you would expect in his sector at least one or two failures until you got to a success; it was almost the necessity to fail that brought success. Difficult circumstances, such as an economic slowdown due to exceptional causes or external shocks, may have an impact on new start-ups taking off. Indeed, some companies will simply be reformations of existing organisations and businesses.

These may be the ordinary reasons why we see start-ups not doing so well, but one common obstacle to getting a new business off the ground or making a success of it is the burden of too much of the wrong—and unnecessary—regulation. The Government and the public will need to know the impact of this measure, after a year or at a period to be agreed between the Government and opposition parties, to see whether the decline in new applicants that we saw at the end of 2024 will continue in the first year of operation and, if so, what steps we may need to take to mitigate this. New businesses are our lifeblood. They help replace the stock of zombie businesses which go out of business and rightly fail in the competitive economy to which my noble friend Lord Hunt alluded.

This Bill, as others which the Labour Government have proposed or enacted since 2024, penalises employers and businesses and introduces a device of damaging politicisation and ideologically driven changes to favour certain vested interest groups over the interests of business, the whole UK economy and the people of this country, who depend on a strong, prosperous and competitive economy to find and keep a job to pay their bills and to pay the tax revenue on which their public services depend.

The Bill’s burdens on all will impose a multitude of additional costs—through employee rights without corresponding obligations or duties, and additional duties and costs on employers—uncertainties, as many of the proposals in the Bill will be decided by regulation, and costs to businesses trying to plan. They weigh the law against and involve cost and compliance burdens for an employer or business, as my noble friend has explained, not only in respect of the rights of employees but through procedures that vary from record-keeping and handling equality action plans in Part 2 to the new law on industrial relations, which is in favour of trade unions and changes or repeals measures that have been around since 1992 and, by and large, have brought peace and harmony to the labour market of this country and the prosperity we need.

These burdens will make for grave uncertainty, given the range of powers that will be exercised, as I have mentioned, by a Minister who may reflect the ideological bent of the current Government to direct their powers against business, employers and the UK economy in favour of those who pay for the Labour Party through political funding—we have had many a debate on that in this Chamber. They are to be finalised through consultation and announced later. Surely, it is not too much to temper such militancy by giving the public and the Government of the day an analysis of what the costs of the regulatory burdens will be so that any adverse impact can be measured and mitigated.

Amendment 311 calls for an assessment of the impact of the Act on productivity. My noble friend has said that the Government recognise in their own impact assessment that the productivity gain will be small. UK productivity is already significantly lower than that of our competitors in the G7—the US, Germany and France—but we will discuss international competitiveness later so I will not speak on that now. However, as a result of this Bill, we expect productivity to decline further by sector and by employee. We know that around 70.9% of workers in the UK work in firms with labour productivity below the mean. It is very difficult to envisage that productivity will increase as a result of the regulatory burdens in this Bill.

If growth is the aim of this Government, we need to increase productivity dramatically. This will not be achieved through an ever-shrinking workforce and the contraction of business activity; at my last count, our labour market had lost 115,000 workers since this Government came to power. Nor will it be achieved by burdening business—and, as my noble friend Lord Hunt mentioned, its capacity to invest in new people, plant and technology—by increasing the money needed to pay for the extra compliance and regulatory costs of this Bill, rather than investing in the production of goods and services, and the training of the people who produce.

I support this amendment, as I do the others, so that we shall have a real measure, based on independent, impartial data, that will shed daylight on the impact of the Bill on these three counts and help the people of this country—and the Government—to press for change, should we need it.

[Lord Deben (Con)]

My Lords, I remind the Committee of my interests in both consultancy and the hospitality industry. I have really come to help the Government on this bit of the Bill, because the problem they have is that very few of those who are working on the Bill run businesses. I have run businesses all my life, except for the time when I was a Minister, and, as I read the Bill, I am very concerned that it has been written by people who have not run businesses. They do not understand the damage that they do to employment and new business. I hope every Minister will admit that to themselves, whether or not they have run businesses and met these problems. Have the civil servants who advise them, or the political advisers from their parties, run businesses and seen these problems for themselves? If the answer is “Not much”, “Not many” or “Not overall”, surely they ought to see whether they have got it right.

Frankly, I do not think they have got it right, but I am very happy to be proved wrong. I do not think they have got it right because I know what has happened in the businesses with which I am associated. I know that we are employing less, because that is the only way we can pay the increased demands on employers. I know that the balances that we have to make now are not to the advantage of staff recruitment. Above all, I know that if I were starting a new business, the temptation not to do so would be very much greater because of the complications that the Bill, and previous actions of the Government, place on us.

That puts me in a position in which I do not think the Bill is, in large measure, a good one. But I am prepared to be proved wrong if, by clear investigation, we look at the results of what happens and take account of it. The problem is that if this Government are going to carry out effectively many of the policies with which I agree—more than I agree with some of the policies on this side of the House—they must prove to the public that they listen and are prepared to look at the facts.

I came to this debate to plead with the Government not to say, “Oh well, this is what we are told by people and we think it is a good idea. It fits in with our obligations and our attitudes”. Instead, they might say, “We will argue in both the House of Lords and the House of Commons, and at the end of it we will see whether we were right. We will see whether the Opposition were right or we were. If we show we are right, we have a really good position to say to the public, ‘There you are, we said we were right and we have been proved right’”. They might say now that they are not even going to find out whether they are right, not going to measure it and not going to accept these amendments.

The noble Baroness, Lady Lawlor, and I disagree on most things. Both of us, though, think that it would be a good idea to check to see where we are. I do not understand why representatives of the trade unions are not getting up and saying to the Government, “Look, we think we’re right and we think you’re right, so check it and independently show that it is right”. Instead of that, the Government are admitting, frankly, either that they do not know or that they fear they would be proved wrong. I want a Government who are brave enough to say, “We’ll actually put it to the test. We’ll actually accept these amendments and we’ll find out who’s right. If we’re wrong, we’ll change it. If we’re right, we’ll crow like mad over those people who told us we were wrong”.

--- Later in debate ---

[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.

--- Later in debate ---

[Lord Hunt of Wirral (Con)]

I have many, many—

[Lord Deben (Con)]

Can the noble Lord, Lord Monks, mention any occasion on which the Official Opposition of the time demanded it?

[Lord Hunt of Wirral (Con)]

My noble friend is quite right. I was going to make a rejoinder by demonstrating that, with Margaret Thatcher assessing, when you proposed a piece of legislation, you had to make sure that you had done your homework and carried out every possible impact assessment, as you would be closely cross-examined on each and every piece of legislation. I worry that this Bill has been rushed through in the first 100 days and no one has carried out the sort of test that Margaret Thatcher would have imposed. Therefore, I am so grateful to the noble Lord, Lord Monks, for reminding us of that criterion, which we ought to bear in mind.