Fair Work Agency: Small and Micro Businesses

Lord Fox Excerpts

Wednesday 17th December 2025 Lords Chamber

[Lord Leong (Lab)]

My noble friend is right draw attention to this matter, on which she has long been a thoughtful voice. In 2024, the Low Pay Commission estimated that some 20% of workers paid at or around the wage floor were underpaid the minimum wage. Analysis conducted by the Resolution Foundation suggests that 900,000 UK workers per year have their holiday pay withheld, worth some £2.1 billion. A similar analysis published by the Trades Union Congress estimated that 2 million workers do not receive their holiday pay and entitlements amounting to more than £3 billion per year, and 1.8 million workers do not even receive a pay slip. My noble friend is absolutely right. We need to crack down on these shambolic practices, and the Fair Work Agency will address them.

[Lord Fox (LD)]

The Minister has already said that this new body will involve existing bodies, many pointing in opposite directions in their reporting. The Gangmasters and Labour Abuse Authority points to the Home Office, the Director of Labour Market Enforcement points elsewhere, and there will be bits of Treasury in there. This will not be a simple exercise in creating a new organisation. During the passage of the Bill, my Amendment 277 sought a full review of the process for this before the enactment of the Bill. The then Minister declined but undertook to do extensive consultation. Can the Minister confirm that that consultation will still happen? Can he give your Lordships’ House some idea of when the statutory instruments required to enact this organisation will come? When are the Government expecting it to be fully operational?

[Lord Leong (Lab)]

I thank the noble Lord for reminding us of his amendment in Committee. As far as I know, and I will obviously correct by way of a letter, the consultation is happening and statutory instruments—secondary legislation—will follow suit. We hope to get this up and running by April 2026.