Employment Rights Bill

Committee (9th Day) (Continued)

21:00:00

Amendment 263

Moved by

263: After Clause 86, insert the following new Clause— “Consultation on trade union legislation(1) The Secretary of State must initiate a consultation on the effects of the provisions in Part 4 of this Act on the operation of the Trade Union and Labour Relations (Consolidation) Act 1992. (2) The Secretary of State must lay before each House of Parliament, no sooner than eighteen weeks after the initiation referred to in subsection (1), a report on—(a) the outcome of that consultation, and(b) the Government’s proposals for changes to the legislation referred to in subsection (1).”Member’s explanatory statement This new clause requires the Secretary of State to undertake a consultation on the operation of trade union legislation.

My Lords, Amendments 263 and 330 standing in my name require the Secretary of State to conduct a consultation on the effects of the provisions in Part 4 on the operation of the Trade Union and Labour Relations (Consolidation) Act 1992 and to report on the outcome and any proposed changes. It is a modest proposal, even a restrained one, but, make no mistake, it is a necessary amendment and a crucial one. What we have before us in Part 4 is not the result of careful planning, measured engagement or evidence-based policy. No, what we have instead is a so far unconsulted set of sweeping reforms to trade union law inserted on Report in the other place with little scrutiny and even less transparency. I believe it is extraordinary that provisions of such weight, which could dramatically alter the balance of industrial relations right across the country, should arrive in this House having not been through a proper public consultation. The provisions would allow the Secretary of State to rewrite fundamental aspects of how trade unions operate, how they are recognised, how they interact with businesses and how ballots are conducted. This is not a footnote to the Bill. This is, I believe, a redrawing of the boundaries of employment law and industrial relations. It has been done without engaging employers, without informing the HR community and without giving those who will be most directly affected any chance to prepare. We must ask ourselves who, precisely, was consulted. It certainly was not business. It was not those employers, large and small, who will be forced to navigate the implications of this legislation. We are left to presume that only the trade unions were consulted, or at least advised, because the changes serve their interests almost exclusively. They have access to workplaces in ever-broadening circumstances. There is the weakening of independent oversight by stripping powers from the certification officer; the dilution, or in some cases outright removal, of long-standing ballot thresholds that were introduced to protect the legitimacy of industrial action; and the potential for significant changes to trade union recognition processes that could alter the employer-union relationship fundamentally—all to be done by secondary legislation. That point cannot be emphasised enough. These changes are not in the Bill. They are hidden in the detail that is to be brought forward later through regulations, through statutory instruments, through mechanisms that allow for no amendment and only limited debate. That is no way to legislate on matters as fundamental as the recognition of trade unions or the conditions for lawful industrial action. These are not administrative details. These are foundational questions of how workers and employers interact under the law. They deserve full, open, transparent scrutiny. They deserve proper consultation. Perhaps most galling of all is that even when the Government speak of consultation, they do so with inconsistency and confusion. I draw your Lordships’ attention to two statements by the Minister for Employment Rights in the other place, Mr Justin Madders. On 7 May he stated unequivocally: “No decision has yet been made by the Government as to whether or when to exercise this power. Therefore, there is no planned timetable for consulting on it at present”. No decision, no timetable, no consultation—yet less than a month later, on 3 June, the same Minister declared: “The Government will consider what criteria to assess whether to lower the recognition threshold in due course, including through the public consultation process”. We go from no consultation to a planned consultation in the space of four weeks. This is not just a contradiction. It is, sadly, becoming a symptom of a Government who are making policy on the hoof and who are unable or unwilling to provide clarity on matters of legal and constitutional significance. Let us talk plainly about what that power is. It is the power to reduce the threshold for trade union recognition to just 2%. No justification is offered for that number. There is no White Paper, no consultation document, no cost-benefit analysis, no report from ACAS, no statement from employer organisations or trade bodies, not a single name that the Government can point to that supports the reduction of that recognition threshold to just 2%. Yet here we are, with Ministers potentially claiming this power to change that threshold by statutory instrument, out of reach of substantive parliamentary control. Why is it 2% and not 20% or 50%? If the Government believe that a change is needed, surely a change should be in the Bill and the rationale should be available to all stakeholders, including this House. If the Government are not prepared to provide that rationale, surely we are entitled to suspect that it has not been thought through. How will employers respond to these changes? What of the small businesses, the charities, the start-ups, the growing firms that have never had to deal with trade union recognition processes before? They are not anti-trade union. They are simply unprepared, yet under these proposals they may soon be required to accommodate access, to facilitate recognition and to engage in statutory processes for which they have no guidance, no support and no warning. These employers are being thrown into an environment of legal uncertainty, an environment shaped not by consultation or consensus but by expediency. It is also abundantly clear that the Government have shown little interest in listening when they have, in the past, consulted. On those parts of the Bill where consultation has occurred, however limited, the views of employers and professionals have largely been ignored. We are hearing consistently that business voices are being drowned out and that legitimate concerns about workability, proportionality and unintended consequences are being brushed aside. What then is the purpose of consultation, if it is treated as a procedural formality rather than a genuine dialogue? Let me repeat again for emphasis: on trade union recognition itself, there has been no consultation. It was confirmed in the other place. To move forward with such a major change in industrial relations law without even the courtesy of asking stakeholders their views is frankly an abdication of responsible governance. I do not stand here as someone hostile to trade unions: far from it. I recognise their historic role and their ongoing contributions to workplace fairness and safety. But fairness has to go both ways. Changes of this scale must be fair, transparent and built on consensus, not stealthily inserted into a Bill and then pushed forward by ministerial decree. That is why the amendment matters. It seeks only to do what the Government should have done in the first place. It seeks to restore process and balance where neither is currently present. I urge your Lordships to support it, not out of ideology or political interest but out of principle, out of a shared commitment to deliberative democracy and out of basic respect for all those who will live and work under the laws we make in the House. I beg to move.

My Lords, the reason I support the amendment is that it links making sure we get the consultations done and then not proceeding with the legislation until that has been printed. This goes to the heart of trying to understand, in effect, the detail of the Bill and how it really will impact jobs, because that is what this is about; how we will not only help workers but make sure they have jobs to still be in. That continues to be the underlying concern, which is why this perfectly formed group of amendments makes sure that at least this House knows full well what the expectation is that employers have, and the risks and opportunities that are highlighted, before it makes the final decision on when this becomes legislation.

My Lords, I just want to intervene very briefly as well. I have raised numerous times that I worry that small and medium-sized businesses have been completely left out of the debate. I spend all my time speaking to small and medium-sized businesses, and most of them are very unaware and quite nervous when they get to hear that a lot of legislation is coming their way, and they are certainly not prepared for it. My grandfather, Mr Ujagar Singh, was one of the founders of the Indian Workers’ Association, and he created that with others to ensure that Indian workers had rights in the 1930s. So I understand it when we are standing up for workers’ rights, because at that time many Indian workers were not even protected by the unions that were here at the time. I am always conflicted, because I want to always make sure that we always have the right laws in place for the workforce. But, at the same time, I have been in business for over four decades, I talk to small businesses all the time, and the one thing that makes me incredibly worried and nervous is the absolute lack of consultation that has gone on with this enormous Bill that will actually destroy jobs, because those small businesses will just close up and shut shop.

My Lords, likewise, I have spent the last 40 years advising SME businesses—not always with success, but I do not have a bad track record. Therefore, I support my noble friend Lord Hunt of Wirral’s very appropriate and wise amendment. I know that he too has spent many years advising SME companies from a legal perspective, so he, like me, has a relationship and dialogue with them. I can tell your Lordships that every single SME company that I have spoken to has honestly no idea of what is in Part 4: they have not tuned in to it or focused on it. They have their own worries—business rates, NICs, trade, oil, energy, you name it—so this is not on their radar. We have received representations from a galaxy of their representatives, such as the British Retail Consortium, the Institute of Directors, the CBI even, the family small businesses association, the British Chambers of Commerce—the list goes on—all of which say that there has been no dialogue and no opportunity to make representations to government.

21:15:00

I say gently to the Government that this is in in their own interest. The press are coming out with articles saying, “Shock horror: look what’s coming ahead”. It is in the Government’s interest to soften that by saying, “Don’t worry, we’ll have consultation before we press the button. We’ll allow people to understand it and get their head around it”. I know the Labour Party postponed a dinner for business leaders last month because people did not want to come. The relationship between SMEs and government is not good at the moment. Part 4 will not enhance it, so why not pause for a short period for consultation?

To give the Minister due notice, I tabled an amendment to the commencement clause such that commencement is delayed specifically in respect of SMEs, as defined by the Small Business, Enterprise and Employment Act, to allow them to understand what is in the Bill and plan accordingly. I very much hope that the Government are in listening mode.

My Lords, I thank all noble Lords who contributed. I will pick up the points that the noble Baroness, Lady Verma, and the noble Lord, Lord Leigh, made about SMEs. Last Wednesday, I gave a speech at an event on the Commons Terrace to a group of SMEs. Most of them were B Corp companies. I think there were about 2,000 of them. I spoke to them about what we are doing with this Bill. I must say, the atmosphere in the room was actually very supportive. Every one of them said that they welcomed the Bill. In fact, some of them said they would do more than what the Bill is doing. So what the noble Lord, Lord Leigh, said about the Government not talking to SMEs is basically not true. We are in constant, regular conversations, whether it is me, Minister Jones or the Secretary of State; we have meetings, including with officials, with all kinds and sizes of business on a daily basis. I thank the noble Lord, Lord Sharpe, for his amendments, which were spoken to by the noble Lord, Lord Hunt. The Bill provides that a number of clauses related to the repeal of the Trade Union Act 2016 will commence two months after Royal Assent. This includes clauses related to the notice and mandate period for industrial action, trade union political funds and simplification of industrial action notices, which the Government consulted publicly on from October to December last year. We have been clear about our intention to repeal the great majority of the Trade Union Act 2016—it was a manifesto commitment—which places unnecessary red tape on trade union activity that works against their core role of negotiation and dispute resolution. More generally, the Bill provides for a number of provisions in Part 4 to come into force on or two months after Royal Assent, while other provisions can be commenced via regulations. These amendments would frustrate those intentions by allowing no part of Part 4, covering all of the provisions regarding trade unions and industrial action, to commence until a report following consultation on the effects of the provisions in Part 4 has been published. The further consultation suggested is not required, given that the Government regularly engaged with business, employers, members of the public and unions in advance of introducing the Bill. The plan to make work pay was established in collaboration with businesses, trade unions and business organisations, and the Government continue to undertake comprehensive engagement. Furthermore, we have been continuing to provide many opportunities for everybody to input into the development of the Bill. For example, we ran a public consultation with all stakeholders—unions represented only 16% of the respondents on specific trade union-related measures in Part 4—from October to December last year. That was open to all to enable the consideration of their views. The Bill will, of course, continue to be subject to parliamentary scrutiny in the usual way, and we will also be conducting further public consultation.

Can the Minister tell me what percentage of the consultation was among BME businesses?

I thank the noble Baroness for her question. I do not have the figure, but I will find it out and write to her. The Bill will, of course, continue to be subject to parliamentary scrutiny in the usual way. We will also be conducting further public consultation on certain parts of Part 4 where there is detail to be set out in secondary legislation or codes of practice. Further consultation of the kind envisaged by these amendments before Part 4 can come into force is therefore not required. These amendments run counter to the Government’s manifesto commitments, as I said earlier. They seek to delay the commencement of essential parts of the Employment Rights Bill with no valid justification and would hinder the delivery of improved workers’ rights. I therefore ask the noble Lord, Lord Sharpe, to withdraw his amendment.

Will the Minister clarify something? In relation to the jolly reception he went to on the Terrace where the delegates were rapturously applauding the introduction of the Bill—in fact, going further—did he say that they were all from B Corp companies, with all the ramifications that brings?

I would not say all, but most of them were members of B Corporations.

Further to that point, will the Minister clarify whether he is talking about medium-sized companies, which might just about cope with the bureaucracy of being a B Corp, or about the vast majority of businesses in this country, which are small and micro companies? There is a big difference between companies with fewer than 50 employees, or fewer than 10 in the case of microcompanies, and those that run up to 250 employees. The issues are quite different.

I thank the noble Baroness for her question. I am very clear about micro-businesses, medium-sized businesses and small businesses. At the event I attended, we had everybody. Not all were B Corps. We had owner-run businesses, businesses with just one or two employees and medium-sized businesses as well.

My Lords, I am disappointed that the Minister does not wish to engage in responding positively to this amendment. My noble friend Lady Coffey put it very much in context, and my noble friend Lady Verma stressed again the complexity of what we are talking about so far as small and medium-sized enterprises are concerned. My noble friends Lord Leigh of Hurley and Lady Noakes further put questions to the Minister, to which I do not think he has responded positively. I say once again that I cannot see why the Government cannot accept this amendment. On trade union recognition, for instance, there has been no consultation at all. Yet this is a major change. It is the “etc” in Part 4 that I get worried about. Part 4 is described as: “Trade unions and industrial action, etc”. There is so much here that has not been consulted on. I agree with the Minister that there has been some consultation, but have the Government really listened to the results of that consultation? Why have they not consulted more widely, particularly on trade union recognition? I think this is an aspect to which we will have to return on Report. In the meantime, I beg leave to withdraw the amendment.

Amendment 263 withdrawn.

Clause 87: Employment of labour market legislation by Secretary of State

Amendment 263ZA

Moved by

263ZA: Clause 87, page 107, line 12, at end insert— “(3A) A person may not be appointed as an enforcement officer under this section unless they—(a) possess professional qualifications relevant to the enforcement of labour market legislation;(b) have undergone prescribed training in the exercise of statutory powers, including rights of entry, inspection, and seizure.”Member’s explanatory statement This amendment ensures that enforcement officers possess appropriate professional qualifications, training, and suitability.

I will speak to Amendments 263ZA, 263ZB, 263B, 263C and 271ZA in my name. I will also briefly refer to Amendments 268 and 271 tabled by my noble friend Lord Holmes of Richmond who sends apologies that he cannot be here this evening. Amendments 263ZA and 263ZB go to the heart of what it means to enforce employment and labour rights in a manner that is consistent with the values of competence, fairness and democratic accountability. They correct a notable deficiency in the current drafting of the Bill and help to align the enforcement regime with the expectation of the workers it is meant to protect and the legal and moral standards of the state that commissions that protection. The role of an enforcement officer is not merely administrative. It is a position of public authority. It carries with it the power to enter workplaces, examine records and question individuals and in some circumstances to impose sanctions or refer matters for prosecution. These are not trivial tasks. They are functions which, if carried out poorly, inconsistently or abusively, can cause serious harm, not only to employers but to vulnerable workers who may already be in a precarious or marginalised position. Under the clauses currently drafted, there is no explicit requirement for enforcement officers wielding these powers to possess any formal qualifications or specific training. That silence is troubling and perplexing. We would not allow an environmental health inspector to carry out food safety inspections without the requisite public health training, we would not permit a planning enforcement officer to issue legal notices without understanding the statutory framework in which they operate, yet here we are contemplating giving substantial and often intrusive powers to individuals without requiring that they meet even a basic threshold of professional competence. This amendment seeks to address that omission in a way that is clear, proportionate and entirely consistent with how enforcement is handled in other regulatory spheres. It is not enough to presume that competence will arise through experience alone or that the Secretary of State will voluntarily set high standards through policy or guidance. Experience in other areas has shown that when qualification and training requirements are not embedded in statute, they become vulnerable to erosion, particularly when budgets are tight or political pressures arise. The second amendment proposing new subsection (4A) is of equal importance. It would require the Secretary of State to ensure that enforcement officers maintain records of all enforcement actions, that they provide written notice to the persons affected by those actions explaining the reasons for the intervention and that they submit activity reports to an independent oversight body. Again, this is not a matter of administrative detail but a fundamental principle. Enforcement that is opaque is enforcement that is liable to error, inconsistency and, in the worst cases, abuse. The powers under this part of the Bill are extensive and potentially disruptive. They can lead to business interruptions, reputational damage and personal distress. For these reasons, it is only right that enforcement activity be recorded, explained and subject to independent scrutiny. The requirement to maintain accurate records of enforcement action is essential not only for the protection of those being investigated, but for the proper functioning of the enforcement system itself. Without such records there can be no effective auditing of performance, no analysis of systemic trends and no evidentiary basis for defending an action should it be challenged in the employment tribunal or the courts. Similarly, the obligation to provide written notice to those affected by enforcement actions is a basic requirement of procedural fairness. It ensures that individuals and businesses understand why a given action was taken and gives them the opportunity to challenge it if they believe it to be unjustified or disproportionate. It is a protection against not only state overreach, but the perception of arbitrary or unfair behaviour by agents of the state. Perhaps most importantly, the requirement for regular reporting to an independent oversight body injects an essential layer of democratic accountability into what is otherwise a closed executive process. The oversight body would not be tasked with micromanaging individual cases. Rather, its function would be to ensure that the enforcement regime as a whole operated in a manner consistent with the rule of law, with proportionality and with respect for the rights of those subject to state power. The amendments would protect businesses from inconsistent or poorly executed interventions, and they would protect the integrity of the enforcement regime itself from reputational damage and legal challenge.

21:30:00

Amendment 263B is designed to insert a new subsection (6A), which would

“establish and maintain an independent oversight body with responsibility for … monitoring the conduct of enforcement officers … investigating complaints … and … publishing annual reports”

on the use of enforcement powers. This would be a simple but vital mechanism. The powers given to enforcement officers under Clause 87 are significant. They include rights of entry, inspection and seizure. While such powers are necessary to tackle serious abuses in the labour market, they must be exercised with care, consistency and, above all, accountability. This amendment would not constrain those powers; rather, it would ensure that their use could be monitored independently and scrutinised transparently. It would give those affected by enforcement action a clear route to raise concerns and would ensure that Parliament and the public could see how these powers are being used year after year. Independent oversight is standard in many regulatory regimes, and the amendment would bring labour market enforcement in line with best practice. It would help to protect against the misuse of power, safeguard public trust and ultimately strengthen the legitimacy of enforcement itself.

Amendment 263C would place a clear duty on enforcement officers to

“exercise their functions in a manner that minimises disruption and harm to individuals and businesses”.

We accept that effective enforcement may at times be inconvenient, but it must never be unnecessarily harmful. Many of the people affected by these enforcement actions, whether workers, small employers or third-party witnesses, are already in vulnerable or uncertain situations. The law should require enforcement officers to act with care, proportionality and respect for lawful activity. The amendment would not weaken enforcement; on the contrary, it would encourage professionalism. It reminds us that the purpose of these powers is to uphold the law, not to punish or intimidate those who are already compliant.

Amendment 271ZA seeks to shift the emphasis from mere activity to actual effectiveness. It would ask not just what was done but whether it worked, and in that question lies the real test of any enforcement regime. Currently, Clause 92(2)(a) requires the Secretary of State to report on the enforcement functions exercised during the year, in accordance with the applicable strategy. However, without the amendment there is no statutory obligation to assess whether those functions actually improved compliance.

We may well end up with a system that measures success in terms of the number of inspections carried out or the volume of penalties issued, without ever pausing to ask whether those efforts have made the labour market fairer, safer or more lawful. That is particularly important when we consider the realities faced by businesses on the ground, especially the vast majority that fall into the category of small or micro enterprises. Those businesses do not typically have in-house legal departments and many do not even have dedicated HR personnel. They are already grappling with a maze of regulatory obligations, often updated without adequate support or communication from the centre, and now, under the Bill, we are layering on a new extensive enforcement regime without any corresponding effort to explain what compliance looks like or to help smaller employers meet their obligations in practice.

I have heard repeatedly from business owners who fear the consequences of unintended errors, late filings, administrative slip-ups or misinterpretation of complex rules. For a large corporation, such issues are dealt with by compliance teams. For a family-run café, a tradesperson or a local care provider, they may amount to an existential threat. There is genuine anxiety that the Bill in its current form risks placing an unprecedented administrative burden on the smallest players in our economy without clarity, support or proportionate enforcement.

The risk here is twofold. First, we risk overenforcement, where state authorities, emboldened by broad new powers, feel compelled to act swiftly and punitively even in cases of minor technical or good-faith breaches. Secondly, we risk misdirected enforcement, where enforcement activity targets low-hanging fruit rather than the worst offenders, simply because smaller businesses are easier to reach or less able to defend themselves. This is not justice; it is just convenience disguised as policy.

The amendment would provide an important safeguard. By requiring an assessment of the effect of enforcement, not just its frequency, it would compel the Government to look at the bigger picture. Are we reaching the worst offenders, or are we simply overwhelming the smaller law-abiding firms with bureaucracy? Are we seeing improvements in compliance, or simply an increase in penalties issued? Are the enforcement functions helping to change behaviour in a positive and educative way, or simply creating fear and confusion among those who want to comply but do not know how?

This is not a call to weaken enforcement; it is a call to make it smarter, fairer and more targeted. We want to see bad employers held to account and to protect workers from exploitation and unsafe conditions, but we must ensure that enforcement functions are being exercised in a manner that is proportionate, strategic and evidence-based. We must make sure that we do not, in the pursuit of justice, end up punishing the very businesses that are doing their best to comply, simply because they lack the resources or guidance to get it right every time.

I turn briefly to my noble friend Lord Holmes of Richmond’s amendments. Amendment 268 seeks simply to ensure that organisations involved in developing and upholding labour market standards have a seat at the table. These groups play a crucial role in improving workplace conditions and promoting fair practices. On behalf of my noble friend, I ask the Minister whether the Government are actively considering including such organisations in the composition of the advisory board.

Amendment 271 seeks to enhance transparency and effectiveness in enforcement. It would require enforcement officers to report annually on how existing schemes and accepted standards are being used to support their work. Again, I ask the Minister whether the Government are considering a mechanism like this to ensure that enforcement standards and efforts are aligned with existing frameworks and standards. I look forward to the Minister’s response. I beg to move.

My Lords, I will speak to Amendments 263A and 279ZZA, which in content are quite closely connected with the amendments that the noble Lord, Lord Sharpe, has been discussing. It was gracious of the Minister to meet me to discuss my amendments. This is how the legislative process should ideally work, with give and take on both sides, and I am looking forward to the “give” bit of that from the Government. My Amendment 263A seeks to ensure that the Secretary of State cannot direct enforcement officers in how and when they exercise their powers. As the Bill stands, enforcement officers will have no separate legal identity from that of the Secretary of State. They will simply be part of a so-called fair work agency that will have no independent legal status. This is why the fair work agency is not mentioned in the Bill, which refers only to the Secretary of State and his or her enforcement officers. Legally, the so-called fair work agency is the Secretary of State. Because enforcement officers will, for legal purposes, be the Secretary of State, Ministers and their advisers would, but for my amendment, be able to direct the way they exercise their enforcement powers. As belt and braces, Clause 87(6) confirms this where it provides that an enforcement officer can exercise his or her powers only “to the extent specified” in their appointment by the Secretary of State. So what are those enforcement powers? Under Clause 93, enforcement officers will be able, at the bidding of Ministers, to require a person “to attend at a specified time and place and to provide information by answering questions” or providing documents. Under Clause 94, they will also be able, at the bidding of Ministers, to “enter any premises, and … inspect or examine … or … seize” documents and retain them for as long as necessary, as well as examine computers. No warrant of a court generally seems to be necessary to enter business premises; a warrant will be required only to enter a dwelling, a place where people live. Let us be clear, Ministers will acquire all the powers of the Gangmasters and Labour Abuse Authority, which is being abolished. These powers include investigating possible labour market abuse and breaches of modern slavery legislation, HMRC’s powers to investigate compliance with the national minimum wage and the powers of the director of labour market enforcement. The full list of legislative powers transferring to the Secretary of State is set out in Schedule 7, paragraph 35 of which confers an extraordinarily wide Henry VIII power on the Secretary of State to add, by regulations, any enactment that affects the rights of employees and trade unions and the duties of employers. This is not all. Clause 98 allows enforcement officers—let us remember that that is the Secretary of State—to be granted certain police powers under the Police and Criminal Evidence Act, including to search, arrest and interview suspects in relation to labour market offences. The Bill before us would transfer all this to the Secretary of State. It is a startling acquisition of intrusive new powers by the Executive. Effectively, the Secretary of State will, through his or her enforcement officers, have his or her own employment rights police force to direct operationally in whatever way he or she chooses. This is in contrast, for example, to our regular police forces and the National Crime Agency, which are both operationally independent of the Home Secretary. It is unlike HMRC, which is a non-ministerial department, precisely to ensure that it operates at arm’s length, with complete operational independence from Ministers to ensure that the administration of the tax system is fair and impartial. It is also unlike the soon to be abolished Gangmasters and Labour Abuse Authority, the day-to-day operational activities of which are, as a non-departmental public body and not part of the Crown, currently independent from government. In its report on the Bill of 4 April 2025, the Constitution Committee said: “Powers to enter and search premises and to seize property represent a significant interference with individual liberty. They are ordinarily vested only in recognised legal officials who typically operate independently of, or at least at arm’s length from, the government. Given the range of enforcement powers potentially exercisable under the Bill on behalf of the Secretary of State, we are concerned that the Government has not provided sufficient reassurances about the safeguards for this regime”. This is the point of my Amendment 263A. It is imperative that the Bill makes crystal clear that enforcement officers appointed by the Secretary of State enjoy complete operational independence from Ministers and their advisers in the way they carry out their wide-ranging and draconian powers. If it does not, it is not impossible to imagine an unscrupulous Secretary of State requiring them to operate in a way that is not in the public interest and might even constitute an abuse of power, to target an unfriendly media organisation for political purposes or for some other wholly inappropriate purpose—who knows? To quote the great Master of the Rolls, Lord Denning, in the iconic constitutional case of R v Commissioner of Police of the Metropolis, ex parte Blackburn, establishing the operational independence of the police, the commissioner of police “is not the servant of anyone, save of the law itself. No Minister of the Crown can tell him that he must, or must not, keep observation on this place or that; or that he must, or must not, prosecute this man or that one … The responsibility for law enforcement lies on him. He is answerable to the law and to the law alone”.  This analogy is not perfect, but the principle is the same: it is the importance of operational independence from Ministers by those exercising investigatory and enforcement powers. My second amendment in this group, Amendment 279ZZA, seeks to ensure that exactly the same inspection, complaints, misconduct, governance and accountability arrangements as currently apply to the Gangmasters and Labour Abuse Authority apply to enforcement officers when they are exercising their extensive powers of oversight, inspection, training and accountability, and complaints procedures. Some of the amendments to which the noble Lord, Lord Sharpe, has spoken are getting at the same thing by a different route. This is all the more necessary given that the powers of the independent Gangmasters and Labour Abuse Authority, which is a non-departmental public body and therefore a non-Crown body, are passing to the Secretary of State. The Minister may say that the Secretary of State is sufficiently accountable for enforcement officers because of the requirement for an annual report to be laid before Parliament, detailing the extent to which enforcement functions are being exercised in accordance with the labour market enforcement strategy. However, that is akin to marking your own homework.

21:45:00

It is not independent scrutiny of the sort currently applied to the Gangmasters and Labour Abuse Authority by His Majesty’s Inspectorate of Constabulary and Fire & Rescue Services. That inspectorate carried out a detailed inspection of the Gangmasters and Labour Abuse Authority in March 2023 in the areas to which my amendment refers. This inspection was voluntary, but it was accepted by the Home Office in its April 2025 framework agreement, reached under this Government, that such inspections by the inspectorate of constabulary would be put on a statutory footing. Presumably, the Government will take the opportunity to do just that by accepting my amendment.

On complaints and misconduct arrangements, as my amendment provides, there are currently detailed regulations covering the handling of complaints made about the conduct of labour abuse prevention officers exercising police powers under the Police and Criminal Evidence Act and how they must be investigated by the Independent Police Complaints Commission. I struggle to see why the same complaints and misconduct arrangements should not apply to enforcement officers when they are deploying exactly the same powers, but I see nothing in the Bill to that effect. I assume that my amendment will be welcomed by the Government on that score too.

Finally, my amendment provides that a framework agreement setting out governance and accountability arrangements for enforcement officers should obviously mirror the April 2025 framework agreement, which the Government recently agreed with the Gangmasters and Labour Abuse Authority. Again, why should there be any difference?

My Lords, the amendments just spoken to by the noble Lord, Lord Carter of Haslemere, are clearly very important. I hope the Government will take them extremely seriously. I have three amendments in this rather strange group, which seems to be the dustbin for amendments broadly about the fair work agency but which have not found their way into a separate group through the degrouping process. My Amendment 269 calls for some transparency about the advisory board which Clause 90 requires the Secretary of State to set up in connection with their enforcement functions. Under Clause 90, the Secretary of State decides on what matters the board should provide advice, but there are no provisions about what happens to that advice. The Secretary of State can ignore it and no one, importantly including Parliament, will be any the wiser. My amendment is modest, requiring a report setting out the advice given to the Secretary of State at least once a year. Importantly, that report would be laid before Parliament, which would be an additional tool allowing it to hold the Secretary of State accountable for the discharge of the huge new powers under the Bill. I am sure that the Minister supports effective parliamentary accountability, so if this amendment does not find favour, I invite her to set out how the Secretary of State will be held accountable by Parliament in relation to the enforcement functions. My Amendments 270 and 279 return to one of our recurring themes on this Bill: its effect on small businesses. I am grateful to the noble Lord, Lord Londesborough, for adding his name to the amendments. Amendment 270 is directed at the labour market enforcement strategy that the Secretary of State is required to produce under Clause 91. My amendment merely requires a separate analysis of, and a strategy for, enforcement for small and micro businesses—that is, those with fewer than 50 employees. Enforcement really should not be one size fits all. What is reasonable to expect from a large corporation with a well-funded HR function is not the same as can reasonably be expected from a business with 10 employees. I am not seeking to say that small businesses should not comply with employment legislation; I am trying to ensure that the circumstances and needs of smaller enterprises will be taken into account in the enforcement strategy. For example, the impact of heavy-handed use of the entry and seizure powers would be drastically different for a well-resourced organisation compared with a small organisation. In a small business, the burden of dealing with enforcement activity would almost certainly end up at the door of the business owner, who would inevitably then be distracted from running the business. We have to remember that small and micro businesses account for the vast majority of businesses in the UK and are the backbone of the UK economy. We all in your Lordships’ House want to see growth in the economy, but—as the Minister will be aware—growth does not come from what Governments do, it comes from what businesses of all shapes and sizes do. Therefore, imposing onerous enforcement mechanisms and powers could threaten the ability of small businesses to operate and play their part in the success of our economy. We need small businesses to thrive because they employ nearly half the private sector workforce in our country, and because small businesses are where large, successful businesses start; without the success of small businesses, we will not have businesses that grow to be large ones in due course. So my point is that enforcement needs to be sensitive to the circumstances of small businesses; that is all my amendment is seeking to achieve. I hope that the Minister can support that. My final amendment, Amendment 279, is inspired by the same concerns about the impact of the new powers on small and micro businesses. Clause 141 creates a new set of offences for officers of corporate bodies and makes those officers personally liable for prosecution if they have consented to whatever action has broken the law or been negligent. Again, we have to look at how this is likely to impact on small businesses. They are often family affairs. The directors are often the main entrepreneur, together with the entrepreneur’s spouse and maybe some representatives of the adjacent generations; outside directors are not common at the small end of the spectrum. Under this Bill, a small company will already be liable to be prosecuted for the full range of offences set out in the Bill. So what is gained in public policy terms by allowing the enforcement authorities to proceed against individuals as well in such cases? Let us say that the directors include the business leader’s husband and business leader’s father, who founded the business. Such companies operate on informal lines, unlike the large corporations, which have legal teams and all sorts of compliance functions with adequate forms of documentation. It would be too easy for enforcement to be aimed at individuals just because they were directors of very small companies that did not see the need for highly formalised decision-making processes. That is not how small businesses actually operate in practice. They would probably be very soft targets for enforcement teams, especially those trying to earn their spurs by securing some convictions. My contention is that we should not let that happen. My amendment takes small and micro businesses out of the scope of Clause 141 entirely. If the Government do not like that—and I suspect they will not like it—can the Minister explain what protections will be built into enforcement to ensure that prosecutions are aimed at the most egregious behaviour rather than at the most convenient targets?

My Lords, I rise to speak to two amendments in this group, 270 and 279, which are both under the name of the noble Baroness, Lady Noakes. I support and have added my name to both of them. I will start with Amendment 270, which addresses Clause 91 and calls—quite reasonably, in my view—for separate analysis and proposals for a labour market enforcement strategy for small and micro businesses. As the noble Baroness pointed out, here we have another section of the Bill where the one-size-fits-all approach will be very difficult to enforce without running the risks and incurring the costs of applying the proverbial sledgehammer to crack nuts—the nuts in this case being the small and micro businesses with fewer than 50 staff. Given the huge scope of this Bill, which has approaching 200 clauses, small businesses are very likely to have much higher levels of non-compliance—much of it inadvertent—compared with their medium-sized and larger counterparts. This is for two principal reasons. First, they simply do not have the in-house HR compliance or legal resource to cover all this legislation, and very often it will fall on the business owner or manager to keep up, while he or she struggles with all the other challenges of trying to run a business profitably and sustainably in the face of all sorts of macroeconomic and microeconomic headwinds. Secondly, there are the disproportionate costs associated with being fully compliant that fall on small and micro enterprises. They simply do not have the budget or cashflow to spend on external advisers and employment lawyers who can advise them on how to navigate all the new clauses and conditions that run across the hundreds of pages of this Bill. As we have heard, a visit to a small or micro business from an enforcement officer, however well trained they are, will have a far greater and more unsettling impact on the owner and their staff than a visit to a medium-sized or large business. As the noble Lord, Lord Sharpe, pointed out, I note that the Government appear not to be planning to provide any material assistance to SMBs to help them understand and comply—or are they? I throw that question to the Minister. As we know, the impact assessment for the Bill rather shrugs its shoulders by admitting that SMBs will be disproportionately hit, in terms of costs and their time, and they are apparently just expected to suck it up. As the noble Baroness said, this is not to argue against an enforcement strategy per se, but it needs to be tailored and proportionate to the size of the business, specifically for micro and small companies. On Amendment 279, it is for very similar reasons that I support this exemption for officers of micro and small businesses from the extension of liability in Clause 141. I support an exemption because these businesses typically do not have boards of directors or advisory groups, or non-exec chairs or governors; they tend to be managed by one or two principals who hold responsibility for pretty much everything to keep the business going, including finance, sales, marketing, customer engagement, product or service development, not to mention general HR which, as we all know, is going to get more far more complicated. Finally, speaking from my own lived experience as an adviser to several small companies, and having run an SME myself for nearly 30 years, I say that we really must guard against deterring business owners and entrepreneurs from starting up and scaling businesses, and specifically from creating new jobs, often at high risk, without threatening them or, indeed, their officers with excessive and menacing levels of extended liability. I say this, mindful of the fact that the ONS reported last week that we had lost 109,000 payroll jobs in the space of one single month. It is not a great time to be spreading fear and uncertainty.

22:00:00

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.

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.

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.

22:15:00

Amendment 263A in the name of the noble Lord, Lord Carter of Haslemere, and Amendment 263B in the name of the noble Lord, Lord Sharpe, relate to the oversight and operational independence of enforcement officers. Through the Bill, we are creating the foundations on which we will establish the fair work agency as an executive agency of DBT. Drafting enforcement functions in the name of the Secretary of State, with the ability to delegate them, is a standard practice when setting up an executive agency, and that is exactly what the Bill does. I draw noble Lords’ attention to the Employment Agency Standards Inspectorate. This team is responsible for enforcing domestic agency protections and is one of the three bodies being brought under the fair work agency umbrella. It is part of the department, and yet it operates free of political interference.

I assure noble Lords that while the Secretary of State will set the overarching direction and priorities of the fair work agency through its enforcement strategies, they will not direct the day-to-day operation of staff. Enforcement officers will be operationally independent of the Secretary of State, and we will set this out in the framework document that governs the relationship between the fair work agency and the Department for Business and Trade. This is similar to how other DBT executive agencies operate, such as the Insolvency Service and Companies House.

Similarly, on Amendment 263B in the names of the noble Lords, Lord Sharpe and Lord Hunt, I of course support the principle of accountability in the use of enforcement powers. However, what this amendment proposes is unnecessary and duplicative. We already have robust oversight mechanisms in place, including oversight by the Independent Office for Police Conduct and other established bodies, and this will continue. Creating a new oversight body would not only be costly but would risk overlapping responsibilities and confusion. It would divert resources away from front-line enforcement and into administrative structures that replicate existing functions.

What is more, Clause 91 requires the Secretary of State to publish a strategy outlining how enforcement functions will be used to address non-compliance. Clause 92 goes further, mandating an annual report to assess how these powers have been exercised. These provisions ensure transparency and accountability without the need for additional bureaucracy. We must be careful not to undermine the efficiency of enforcement by layering on unnecessary institutions. The current framework is sufficient, and the Bill already strengthens oversight through clear reporting obligations.

This brings me to Amendment 279ZZA tabled by the noble Lord, Lord Carter of Haslemere. I would like to reassure the noble Lord that we intend to maintain all oversight arrangements in place for the existing bodies, including the Independent Office for Police Conduct’s oversight of the Gangmasters & Labour Abuse Authority’s functions. These oversight arrangements are provided for in paragraph 74 of Schedule 10 and will be set out further in secondary legislation and in the fair work agency’s framework document. I can confirm that the fair work agency will have a clear and transparent complaints procedure modelled on the procedures of the current bodies, including the Gangmasters & Labour Abuse Authority. Therefore, I hope the noble Lord recognises that this amendment is unnecessary.

On Amendment 271ZZB tabled by the noble Baroness, Lady Coffey, the current drafting,

“As soon as reasonably practicable”,

mirrors wording used in the Immigration Act 2016 and aligns with accepted legislative drafting norms. This is the standard practice used in multiple Acts of Parliament to ensure swift publication without impractical deadlines.

A deadline of three months after the end of the financial year to publish the annual report may seem sensible on paper, but, in practice, complex reports often rely on external data, stakeholder engagement and cross-government co-ordination. A rigid deadline can lead to publication of incomplete or misleading information, which would serve no one well. The Government are committed to prompt publication and transparency, but good policy relies on accuracy, not just speed, and we believe that the current drafting ensures both.

I turn to Amendment 271, in the name of the noble Lord, Lord Holmes of Richmond, and Amendment 271ZA, in the name of the noble Lord, Lord Sharpe, which would introduce additional reporting requirements. Existing transparency measures established by the Bill are sufficiently broad to allow rigorous parliamentary scrutiny of the fair work agency. Clauses 91 and 92 mandate that the Secretary of State must publish an enforcement strategy setting out how enforcement functions will be exercised and an annual report requiring an annual assessment of the exercise of these functions. These will be laid before Parliament and the Northern Ireland Assembly. This is an upgrade on current transparency arrangements. There is no current legislative requirement for the Employment Agency Standards Inspectorate or HMRC’s minimum wage unit to produce annual reports or strategies.

Turning to Amendments 270 and 279, I am grateful to the noble Baroness, Lady Noakes, for tabling them. We can all agree that the UK labour market enforcement system is fragmented and, as a result, ineffective. That is why we are creating the fair work agency, and this Bill is the vehicle to deliver it. The fair work agency will enforce employment rights across all business sizes to ensure fairness and prevent non-compliant employers undercutting those who follow the law. The body will also provide training and guidance to help businesses understand and comply with labour market regulations, and we will work closely with ACAS to do that.

Amendment 270 is unnecessary because assessing how best to support small businesses will be at the core of the fair work agency’s work. Clause 91(2)(c) already provides flexibility for the fair work agency’s enforcement strategy to cover matters that the Secretary of State considers appropriate, such as the impact on small businesses specifically. Amendment 279 would introduce unfairness into the system. While the vast majority of small business officers want to do right by their staff, there are, sadly, as we have been discussing, some bad actors who exploit their workers. It is unfair to let that minority undercut the compliant majority.

I want to ask the Minister a question. It may be that I have missed the answer, although I have tried really hard to listen to every word that she has said. If a business wants to appeal against a decision by an enforcement officer, where does it seek that appeal?

I did cover that, but now I have forgotten what my answer was. I will write to the noble Baroness, but I think it was in my earlier contribution. I reiterate on the small business question that businesses that comply with their obligations should not see any increased burden from enforcement activity. The fair work agency will target only the minority of employers engaged in illegal practices, so including specific carve-outs could create loopholes that bad actors might exploit. In fact, businesses of all sizes stand to benefit from a fairer labour market where exploitative practices are actively addressed as this will create a level playing field for all. Let us not forget that we are creating the fair work agency to deliver an upgrade to the enforcement of workers’ rights. If we created a carve-out for businesses based purely on size, we would be creating a two-tier system for enforcement. This is unfair for workers and businesses. Amendment 268 risks compromising the balanced representation of the advisory board. The current drafting has been carefully chosen to reflect the social partnership model that has served the Low Pay Commission and ACAS well for many years. The noble Lord, Lord Sharpe, asked on behalf of his noble friend Lord Holmes whether representatives of labour market standards would be on the advisory board. The Secretary of State will appoint individuals if they are considered to be independent experts. That recruitment and selection process will include a thorough assessment of the applicant’s qualifications, experience and potential conflicts of interest. Vulnerable workers have been waiting for the fair work agency for years. It will deliver the worker protection enforcement authority that was proposed in the Liberal Democrat 2024 manifesto and the single enforcement body that was the policy of successive Conservative-led Administrations. It now forms a key plank of the plan to make work pay, a key manifesto pledge upon which this Government was elected. Bringing together the fragmented labour market enforcement landscape has been a policy aim for successive Governments. We cannot let this critical policy be delayed any more. I therefore ask the noble Lord to withdraw Amendment 263ZA.

I am very grateful for what the Minister said in response to my amendments. I think she said that the framework document will state that enforcement officers will have complete operational independence from Ministers, which is reassuring to know. Presumably, therefore, it would be possible for the terms of appointment of enforcement officers under Clause 87(6) to state the same thing. Clause 87(6) states that: “A person appointed under this section may exercise any powers of an enforcement officer to the extent specified in the appointment”. There is another perfect place in which to reassert that they are operationally independent of the Secretary of State.

I said earlier in my contribution that the letters of appointment made to these people will spell out their duties. Obviously, their relationship to the Secretary of State will be spelled out in the letter of appointment. I have said several times now that they will be operationally independent, so that could be a key message in those letters of appointment.

I am very grateful to the Minister for her extensive answer and to my noble friends Lady Noakes and Lady Coffey, the noble Lords, Lord Carter of Haslemere, Lord Londesborough and Lord Stoneham, for their contributions to this short but very interesting debate. As we come to the end of our discussion on these amendments to the Employment Rights Bill, I express my thanks to noble Lords who have contributed with such clarity and conviction and my disappointment with the Government’s response. Amendment 269, tabled by my noble friend Lady Noakes, fits very neatly with the requirement on the Secretary of State to produce annual reports under Clause 92. The Secretary of State has a duty to consult the advisory board, so I simply cannot understand why the Government would reject the idea of just combining the two and getting on with it. Equally, I do not understand why they would not want to take the suggestions of my noble friend Lady Coffey to tighten up the requirement. Nothing under those terms for the advisory board or the reports that need to be produced by the Secretary of State require a great deal of external information. We have tabled amendments that are measured, constructive and rooted in principle. We have not sought to gut the Bill or to frustrate its aim of enforcing fair and lawful treatment in the labour market. On the contrary, we have sought to strengthen it and to ensure that the powers that it grants are effective and accountable, that enforcement is robust and fair and that ordinary businesses, especially small and micro enterprises, are not crushed under the weight of uncertainty, disproportionate penalties or faceless bureaucracy. The noble Lord, Lord Carter, made excellent points about accountability. Enforcement is about not just force but legitimacy. It is about trust, and trust is only sustained when those who wield power are subject to oversight, transparency and to reasonable limits. That is not red tape. It is just a democratic principle. That is why we ask for qualifications and training to be made a prerequisite for enforcement officers, an obvious step given the serious powers that they will be entrusted with. The Minister rejected my amendment introducing that notion, saying that it was not necessary because of Clause 87(6), just referred to by the noble Lord, Lord Carter. I note that Clause 87(3) says: “In this Part ‘enforcement officer’ means a person appointed by the Secretary of State under this section”— note that it says, “a person”, not necessarily “a qualified person”—whereas Clause 87(6), on which the Minister replied, says: “A person appointed under this section may exercise any powers of an enforcement officer to the extent specified in the appointment”. As the noble Lord, Lord Carter, informed us, there is no notion in there of independence, skills or anything else. That argument as to why our amendment is not necessary falls based on what is in the Bill.

22:30:00

We asked for clear duties to minimise disruption to lawful businesses, because we all know that enforcement done carelessly can damage livelihoods. We asked for an independent oversight body to provide redress when things go wrong, because when there is no recourse there is no justice. We asked that the Government report not just on what enforcement actions were taken but on whether they had the intended impact on non-compliance. None of these proposals are radical; none of them are burdensome; they were all rooted in improving the Bill and not weakening it. That is a missed opportunity, and it is a serious failure of legislative responsibility.

We know that there are businesses up and down the country, particularly SMEs and sole traders, which are desperate for clarity; points were made on that by my noble friend Lady Noakes and the noble Lords, Lord Londesborough and Lord Stoneham, among others. They want to comply, but they are struggling to keep up with the complex obligations and shifting rules. The Bill without our amendments leaves them in the dark. It opens the door to enforcement that is heavy-handed, inconsistent and insulated from challenge. If I may be so bold as to re-ask my noble friend Lady Noakes’s question: what protections are built into this for SMEs and those who will struggle under the administrative burden?

I regret that we find ourselves here, and I regret even more that those who will bear the brunt of this will not be the rogue employers that the Government claim to target but the honest, hard-working and often overstretched small businesses that form the backbone of our economy. On our Benches, we certainly intend to continue to make the case for a fairer, smarter enforcement regime. Tonight, I express my sincere disappointment that the Government have not chosen to help us along with that ambition and have rejected our very sensible and pragmatic amendments. I beg leave to withdraw my amendment.

Just before we move on, I wanted to clarify to the noble Baroness, Lady Verma, that I have now found the note in my speaking notes. I confirm that I did say that the fair work agency will have a clear and transparent complaints procedure modelled on the procedures of the current bodies, including the Gangmasters and Labour Abuse Authority.

Amendment 263ZA withdrawn.

Amendments 263ZB to 263C not moved.

Clause 87 agreed.

Schedule 7: Legislation subject to enforcement under Part 5

Amendment 264

Moved by

264: Schedule 7, page 262, line 27, at end insert— “Pensions Act 2004 26A Section 259 of the Pensions Act 2004 (Consultation by employers: occupational pension schemes).” Member's explanatory statement This amendment, together with another amendment to Schedule 7, seeks to include employer obligations to their employees relating to pensions within the scope of legislation subject to enforcement under Part 5.

My Lords, it is a real pleasure to come on to the subject of pensions at 10.30 pm. However, I know not to try the patience of my noble friends or even the noble Opposition. In truth, the amendment, although it comes up here and refers to enforcement and the fair work agency, is really about the place of pensions within the Bill. My contention is that pensions are not given adequate consideration, and I am using this as a mechanism to press my noble friend the Minister to expand on how the legislation will reflect on pensions. Of course, we get the Bill. One wonders how legislators coped before the introduction of “word search”, because there are 300 pages, 157 clauses and 12 schedules; and a use of word search tells us that “pension” appears 19 times in such a massive piece of legislation, and quite a few of those are where it forms part of “suspension”. The Bill fails to give any serious consideration, as far as I can see, to the place of pensions as an important element in the terms and conditions of employment. That is where I started from. I looked at particular ways that pensions should be addressed in the Bill. The amendments we are considering now—Amendments 264, 265 and 324—are tabled as a sample to press my noble friend to explain. Amendments 264 and 265 relate to Schedule 7 and enforcement of labour legislation. There is labour legislation on pensions: there are obligations on employers to consult trade unions in certain circumstances—that is covered by Amendment 264. Amendment 265 in effect applies to automatic enrolment, where it is an inherent part of the labour contract that people have that pension. Enforcement agents are going into companies. If they are going in, it seems a wasted opportunity if they do not check for compliance on these particular issues as well as the other issues specified in the Bill. At heart, my amendments are a request for my noble friend to explain whether these issues and pensions more generally should not be included throughout the Bill. My Amendment 324 appears very late on; it has been promoted from the “miscellaneous and general” part of the Bill. It seeks a definition of “remuneration”, which appears 75 times in the Bill but is not defined anywhere. It could well be defined by other legislation and judgments in the courts, but there seems to be a total lack of consistency. I could point to particular judgments and international standards where remuneration is defined in one way or another, but there is no overall consistency. Yet remuneration is clearly a crucial part of the Bill and there is a lack of clarity about what it means. I really hope that it is obvious; I am raising the issue only because I want the Bill to include pensions. You cannot understand someone’s remuneration if you do not know what pension they are being offered; it is part and parcel of the package. To look at some elements but not pensions seems wrong. I urge my noble friend to make a positive response that the Bill will be looked at in detail again for places where pensions should have their proper role. I beg to move.

I always have tremendous respect for the noble Lord, Lord Davies of Brixton, in particular his knowledge of pensions, because he, like me, is an actuary. Whereas he is a true actuary, I am just an honorary fellow of the Institute and Faculty of Actuaries, so I always respect his views. I am not sure there is very much I can say in intervening between him, his Secretary of State and the Minister. All I will say is that his amendments represent a shift from a consultative culture to a more legalistic and punitive model. That would be a shift at great cost. Like him, I believe that people are entitled to proper pensions and proper security. Like him, I fought on many occasions to ensure that that is an enforceable right. I do not want to anticipate what the Minister will say, but we have to consider the employer’s perspective. We all want to see businesses offer generous, flexible benefit schemes—things such as pension contributions, healthcare and travel allowances—but if those are brought into tight regulatory definitions and packages, and enforcement frameworks, I worry that some employers might feel discouraged from offering them at all. I await the response of the Minister.

My Lords, I thank the noble Lord, Lord Hunt, for his contribution, and my noble friend Lord Davies of Brixton for tabling Amendments 264, 265 and 324. I respect my noble friend’s concern for upholding rights relating to pensions. The power in Part 2 of Schedule 7 would allow us to extend the fair work agency’s remit to cover enforcement of pensions legislation in the future, but it would not be appropriate to make this expansion to the fair work agency’s remit at this time. Changing how pensions are enforced would be a significant undertaking, requiring careful consideration, consultation and planning, not least regarding how the fair work agency would interact with the current Pensions Regulator. Therefore, I must respectfully resist these amendments. Amendment 324, also in the name of my noble friend Lord Davies of Brixton, seeks to ensure that pension arrangements are covered by the definition of remuneration. While I understand my noble friend’s concern here, this amendment is not necessary and its introduction would have far-reaching implications across the Bill. While pension arrangements are already covered by some of the provisions in the Bill, it brings forward issues around sectoral collective arrangements, which I am sure my noble friend would not want to frustrate. So while I appreciate the intentions of my noble friend Lord Davies of Brixton, I respectfully ask him to withdraw Amendment 264.

I thank my noble friend the Minister for his remarks. I am unpersuaded but, at this stage, I beg leave to withdraw the amendment.

Amendment 264 withdrawn.

Amendment 264ZA

Moved by

264ZA: Schedule 7, page 262, line 29, leave out paragraph 27 Member’s explanatory statement This amendment seeks to probe the scope of enforcement actions.

My Lords, we are now considering Schedule 7, which is the scope of the legislation that the enforcement officers will be considering in applying their powers and the prosecution for offences. I picked out one of the Acts that this is looking to. I will be happy to hear from the Minister, but I am interested that this is now extending into fraud. We have gangmasters, working time, holiday pay, the question of whether the employer is keeping details of annual leave, and so on and so forth. I wonder at what point we will end up relying on this agency, which we have already heard has probably unique powers for any Secretary of State. Where is the balance between this agency and the organisation—a non-ministerial department—that we would expect to start prosecuting criminal offences in areas such as fraud, the Crown Prosecution Service? I am trying to get a sense of where this stops. I think that is also the purpose of my noble friend’s Amendment 266. We are getting into trying to work out where on earth we will be turning to. There is a combination here of investigation and being able to get lots of information, but why is the Crown Prosecution Service not involved? I appreciate that the hour is late, but time was not given at the other end to consider the detail of this legislation. That has increasingly become the role of this House. I am concerned specifically about the Fraud Act, but there needs to be a wider conversation—I am thinking particularly of paragraph 35 of Schedule 7 —to work out at what point we hand over to the police or to the Crown Prosecution Service to investigate potential crimes.

22:45:00

I advise the Committee that if this amendment were agreed to, it would not be possible for me to call Amendment 264A for reason of pre-emption.

My Lords, I thank my noble friend Lady Coffey for her amendment in this group and for her introduction. I will speak to Amendments 266 and 267 in my name. These amendments are not presented in opposition to the spirit or general objectives of the Bill. Indeed, we fully support the aims of enforcing employment rights and ensuring that bad employers do not undercut fair ones. These amendments respond to a real and serious concern about the breadth of the power that the Bill currently gives to Ministers—a power that, if left unchecked, would allow a future Government to expand the remit of the fair work agency with far-reaching consequences but only the most minimal parliamentary oversight. Paragraph 35 of Schedule 7 allows the Secretary of State to add to the list of enactments that fall under the enforcement remit of the fair work agency by way of regulations. That list, set out in Part 1 of Schedule 7, includes a range of statutory rights covering pay, working time, sick pay and protections against exploitation. The current drafting allows for the addition of any enactment that relates to employees, workers, employers or trade unions. That is an extraordinarily broad formulation. It would allow the Secretary of State to bring into the fair work agency’s scope virtually any area of employment or labour law, potentially even those governing union recognition, industrial action or collective bargaining, by secondary legislation and with no meaningful boundary in statute. Amendment 266 seeks to address this by narrowing the scope of this delegated power. It would limit the types of enactments that can be added to those that relate to hours, pay or holidays. These are, after all, the core minimum terms and conditions of the employment relationship. They are well understood, capable of objective enforcement and already subject to statutory minima in other parts of the Bill. They also reflect the matters over which the recognised trade unions typically have statutory bargaining rights. There is, therefore, a clear and principled rationale for limiting the fair work agency’s enforcement jurisdiction to these domains. We put forward this amendment on the grounds that it is both reasonable and proportionate. It would still allow Ministers to respond to emerging issues in labour markets, such as new forms of pay abuse or evasion of working time rules. It would, however, prevent this power being used to draw the FWA into controversial or contested areas of employment law, or into territory where individual enforcement through tribunals is more appropriate than systemic enforcement by a regulator. It would preserve the coherence of the agency’s function and protect against mission creep over time. We anticipate that Ministers will argue that this amendment is too prescriptive and does not allow sufficient flexibility to bring in related rights that may not neatly fall into the categories of pay, hours or holidays, but that are none the less important for fair work—for example, information rights, certain protections from detriment or emerging contractual abuses not yet addressed by current law. The Government may say that drawing such hard lines in primary legislation is undesirable and that a degree of discretion is necessary for effective future-proofing. If the Government do not accept Amendment 266 on the grounds that it is too narrow, it follows that the strength of Amendment 267 becomes even more essential. This amendment would require that any regulations made under paragraph 35 be subject not merely to the affirmative resolution procedure but to the super-affirmative resolution procedure, which I know the noble Baroness, Lady Jones, is fond of, as defined in Section 18 of the Legislative and Regulatory Reform Act 2006. The super-affirmative procedure is not some theoretical or obscure mechanism. It exists precisely for circumstances such as this, where Parliament grants the Executive a broad power to amend the application of primary legislation by secondary means. The procedure ensures that Parliament is properly consulted, that draft regulations are subject to scrutiny before they are laid and that there is an opportunity for representations to be made, considered and reflected in the final statutory instrument. The two amendments offer a choice. If the Government agree with us that the power to amend Schedule 7 should be tightly confined, they can accept Amendment 266. If they prefer to retain flexibility, they must accept that that comes with the responsibility of subjecting that power to a higher standard of parliamentary scrutiny, in which case Amendment 267 is the minimum safeguard necessary. What would be constitutionally unacceptable is for the Government to reject both amendments, leaving in place a broad and undefined power exercisable by ordinary affirmative resolution. That would be to hand the Executive a blank cheque over the shape and scope of labour-market enforcement in this country, without adequate safeguards in place. To conclude, I urge the Government to consider carefully the implications of paragraph 35 as currently drafted. It is not enough to say that Ministers do not intend to use this power in a wide-ranging or politically contentious way. We are legislating not just for the current Secretary of State but for future ones, too. If the Government want discretion, Parliament must have oversight, and if they want latitude, we must have safeguards. The amendments give the Government the opportunity to make a choice: define the limits of this power clearly or accept the heightened scrutiny that wide powers properly demand.

My Lords, I thank the noble Baroness, Lady Coffey, for tabling Amendment 264ZA, which concerns the fair work agency’s remit. I also thank the noble Lord, Lord Sharpe of Epsom, for Amendments 266 and 267, which seek to alter the delegated powers in Part 2 of Schedule 7. Amendment 264ZA would seriously restrict the fair work agency’s ability to tackle labour exploitation of a more serious nature where the threshold does not meet the requirement under the Modern Slavery Act. There are no other enforcement provisions in the Bill that would cover this scenario. Currently, a number of Gangmasters and Labour Abuse Authority investigations have to be abandoned when the modern slavery threshold is not met. Since 2023, 104 cases have been dropped. That is bad for labour abuse victims and for taxpayers. We are adding elements of the Fraud Act to the fair work agency’s remit precisely to address this issue. It will allow the fair work agency to investigate cases of financial fraud by abuse of position. That has specifically been included within the Bill following extensive discussions with stakeholders, including the Gangmasters and Labour Abuse Authority and the Home Office. Removing the Fraud Act offences from the fair work agency’s scope would truly limit the agency’s effectiveness, and I must therefore respectfully resist this amendment. Amendment 266, tabled by the noble Lord, Lord Sharpe, would drastically narrow the scope of the power. This would undermine the very purpose of the fair work agency, which is to simplify and consolidate the enforcement of labour market legislation. The fair work agency will be greater than the sum of its parts as its remit is further expanded. This will relieve pressure on a struggling employment tribunal system, which I have heard many times from noble Lords across the aisle. The power to expand the fair work agency’s remit has appropriate safeguards and limitations. Any expansion of its scope will be informed by the advice from the agency’s tripartite advisory board, and with consideration of the overall enforcement strategy. Furthermore, any changes to the remit will be through affirmative-resolution regulations that will be laid before Parliament and, where relevant, will require the consent of the relevant Northern Ireland department. This power is crucial to the long-term flexibility of the fair work agency. By enabling the remit to expand over time, it can respond to developments in the labour market. If we were to restrict the power to such a narrow range of issues, we would be tying our own hands. Amendment 267, also in the name of the noble Lord, Lord Sharpe of Epsom, would require that a super-affirmative resolution procedure be used when the Secretary of State exercises the delegated power in Part 2 of Schedule 7. In my almost three years in this House when the party opposite was in government, I never heard them bring any super-affirmative resolution in any of the Bills they brought before this House, so I do not understand the sudden change of heart. This amendment is unnecessary. The Bill provides for appropriate parliamentary scrutiny as use of this power will be subject to the affirmative resolution procedure. I also highlight that the recent report by the Delegated Powers and Regulatory Reform Committee did not raise any concern with this power as currently drafted. The additional scrutiny this amendment calls for would place unneeded burdens on parliamentary time, which is currently stretched. With this point in mind, I ask the noble Baroness to withdraw Amendment 264ZA.

I thank the Minister for that comprehensive response to my amendment. To be candid, if that had been in the Bill’s Explanatory Notes, it might have made life easier. As the Minister knows, the creation of this fair work agency, with the novel powers it is going to have, is one of the reasons why my noble friends on the Front Bench have been pushing for the super-affirmative procedure. We will briefly get into a bit more discussion about the advisory board, but it is those elements—recognising the novel powers—that we are concerned about. With that, I withdraw my amendment.

Amendment 264ZA withdrawn.

Amendment 264A

Moved by

264A: Schedule 7, page 262, line 32, leave out “or a person seeking work” Member’s explanatory statement This amendment is consequential on the definition of “worker” being inserted into Part 5 by my amendment of clause 148 at page 147, line 9.

My Lords, I beg to move Government Amendment 264A, and will speak to Government Amendments 265A, 271A, 272A, 273M, 273P, 273S, 279A, 279B, 279C, 279D, 279E, 279F and 279G. I thank all noble Lords who attended the all-Peers briefing on these amendments that I gave on 8 May. As was explained at that time, the amendments aim to make the creation of the fair work agency effective, including by ensuring a smooth transition from the current arrangements, and they are not new policy. Without the correct information-sharing gateways, the fair work agency will not be able to do its job; Clause 132 is vital to making sure that it can. Government Amendment 273M makes a minor drafting change to Clause 132(3). Specifically, it clarifies that information obtained by the fair work agency in connection with an enforcement or civil proceedings function under Part 5 of the Bill can be used for other functions under Part 5. This change ensures that the benefits of bringing together responsibility for enforcing a range of rights are fully realised. Government Amendment 273P adds the Security Industry Authority to the list of persons in Schedule 9. This will enable the fair work agency enforcement officers to disclose information obtained under the enforcement functions in Part 5 of the Bill with the Security Industry Authority, where that information relates to its statutory functions. Any disclosure will be subject to other restrictions in the Bill and existing safeguards. For example, a disclosure will not be authorised under Clause 132 if it would constitute a breach of data protection legislation or is otherwise prohibited by certain provisions of the Investigatory Powers Act 2016. Government Amendment 279A clarifies that the information captured by the definition of “HMRC information” in Clause 134 will be subject to appropriate safeguards regarding onward disclosure where specified conditions are met. This will ensure that there will be continuity as we set up the fair work agency and that all information is handled with the appropriate sensitivities. Government Amendment 271A is a minor technical amendment to Clause 111. It sets out that where a liable party has failed to comply with the requirement in a notice of underpayment to repay arrears to an individual, the fair work agency can make an application to court for an order. Sub-paragraph (6) defines “a court” for the purposes of this section. This amendment clarifies that summary sheriffs can also have jurisdiction to hear these applications in Scotland.

23:00:00

Government Amendment 273S is a technical amendment to Clause 140 that gives the Secretary of State a power to require the payment of charges to recover the cost of enforcement activity. Sub-paragraph (7) currently provides that sums payable to the Secretary of State under this section are not required to be paid into the Consolidated Fund. This amendment removes sub-paragraph (7) and so ensures that the default legal position that funds recovered by the Secretary of State should be paid into the Consolidated Fund is in line with legislative arrangements of other public bodies. When the power in Clause 140 is exercised, it will be for the Secretary of State to agree with His Majesty’s Treasury how any funds recovered can be retained towards the FWA’s costs.

Government Amendment 279B is minor and technical, but necessary. It corrects an incorrect cross-reference in paragraph 19 of Schedule 11 to the provisions in Schedule 10. It specifically ensures that changes made to the National Minimum Wage Act by Schedule 10 do not have the effect for the purposes of devolved agricultural wages legislation.

Government Amendment 279G clarifies the definition of “worker” for the purpose of Part 5. In particular, it ensures that this definition will capture people in scope of the protections in Clauses 1 to 8 in relation to zero-hours contracts. Noble Lords will recall that in the other place, the Government signalled our intention for the fair work agency to take on enforcement of zero-hours contract provisions, subject to consultation on the detail and the outcome of the spending review. This amendment is about ensuring that the Bill functions as intended and that the fair work agency can take effective enforcement action, as and when the power to expand its remit in Schedule 7, Part 2 is exercised.

Government Amendments 272A, 279E, 264A and 265A are all consequential on the definition of “worker” being amended by Amendment 279G. They are necessary to ensure that the drafting of the relevant Bill’s provisions functions as intended.

Government Amendment 279F similarly clarifies the definition of “employer” for the purposes of Part 5, to ensure that this will cover people who have obligations placed on them by Clauses 1 to 8 in relation to zero- hours contracts. Government Amendments 279C and 279D are consequential on this amendment. They will ensure that the drafting functions as amended.

As I say, these amendments do not introduce new policy, and I hope that noble Lords will see that they are necessary to deliver what is an important policy that has broad support. I beg to move.

My Lords, I thank the Minister not only for her speech but for the briefing she held for all Peers to explain the background to these amendments. We fully appreciate that from time to time, there may be technical issues with legislation that necessitate amendments being brought at a later stage. Such occurrences are of course all part of the legislative process. In this instance, however, it is disappointing that these matters were not addressed and dealt with from the outset. Ideally, these amendments should have been tabled and thoroughly considered in the other place. Instead, we have seen the Government bring forward a number of policy-related amendments at a relatively late stage—amendments which, regrettably, received limited scrutiny in the Commons. I do not believe that this approach lends itself to the transparency and rigorous examination that effective lawmaking demands. We sincerely hope that in future, the Government will engage with the legislative process in a more considered and structured manner. Proper scrutiny at all stages is not just a formality; it is essential in ensuring that the laws we pass are sound, effective and in the public interest.

My Lords, I agree with the noble Lord that in good legislative processes it is not ideal to have technical amendments at this stage. However, it is better to identify them now rather than later in the process, and we have bent over backwards to engage Peers to explain why they are necessary. In a previous role on the Opposition Benches, I spent a lot of time in secondary legislation sessions correcting technical issues that should have been identified in primary legislation by the previous Government, but that debate may be for another day. In the meantime, of course we aspire to better legislative processes in future, and I agree with the noble Lord. I beg to move.

Amendment 264A agreed.

Amendment 265 not moved.

Amendment 265A

Moved by

265A: Schedule 7, page 263, line 3, leave out “or a person seeking work” Member's explanatory statement This amendment is consequential on the definition of “worker” being inserted into Part 5 by my amendment of clause 148 at page 147, line 9.

Amendment 265A agreed.

Amendment 266 not moved.

Amendment 266A

Moved by

266A: Schedule 7, page 264, line 21, leave out paragraph (b)

My Lords, I will also speak to Amendments 267ZA, 267AA and 267AB in my name in this group. Schedule 7 tries to bring together a whole bunch of legislation in a meaningful and sensible way so that it can handily be used in future. I could have extended some of these amendments, but I decided to focus Amendment 266A on paragraph 35(5)(b) of Schedule 7, which relates to Clause 89 on the delegation of functions. I could have considered a whole number of these, because this is a classic Henry VIII clause—put something in primary, shove something through regulations and, hey presto, a whole Act can change before our very eyes. In particular, Clause 89(6), which I address in Amendment 267AB, stood out to me. My concern is that we start off with this agency, the enforcement officers and all these different things, but Clause 89(1) says: “The Secretary of State may make arrangements with a public authority”. I do not think “a public authority” is defined anywhere else in legislation at all. This is the first time I have seen it defined, as “a person certain of whose functions are functions of a public nature”. That could be a whole bunch of people. What does it really mean? Are they seeking to act in the public interest, or in a different way? The Explanatory Notes do say what they are, but, as the Minister and the Committee will know, they are not part of legislation. One of the reasons for bringing this out is to try to understand from the Minister precisely what it means. The consequence of these bits of the legislation is that, by statutory instrument, this novel area that we are getting into could be changed very quickly, away from what might have seemed a sensible agency, though I appreciate that the noble Lord, Lord Carter of Haslemere, would rather have operational independence. This is why I have peppered through my amendments in this group the very specific point that it should be a public authority that has civil servants in it and is not a non-ministerial department. I think that there are about 24 non-ministerial departments. Perhaps really only two—the Supreme Court and the Crown Prosecution Service—should be non-ministerial, recognising the accountability that, understandably, Parliament and the public expect. The difference of a non-ministerial department is that it is accountable to Parliament. The device to do that is principally through the Select Committee in the House of Commons, perhaps the Public Accounts Committee, not so much in the House of Lords. Therefore, significant parts of the work being done are left to an occasional accountability meeting, whereas if civil servants are not in a non-ministerial department, the Secretary of State is directly responsible and can be held to account by Parliament and can hold those civil servants to account. I am therefore very nervous about how easy it will become to change Clause 89(6) and what that then means. It would be better for the Government to have more in the Bill about what it is. As we are starting to get into Part 5, could it be that the public authority starts to become not-for-profit groups of solicitors who start to have these enforcement functions? Could arms of trade unions suddenly start enforcing and be able do all these different elements and to take employers to court so this starts to spread? The reason for my amendments is to try to get better legislation about what this is supposed to be. I am desperately trying to make sure that the only people to whom these things can be delegated will be civil servants who honour what the Government have set out in Part 5 and that the variety of enforcement officers and the fair work agency will be directly accountable and have the executive powers of the Secretary of State. That can be done only if people are civil servants and they are not in a non-ministerial department. I beg to move.

My Lords, I thank my noble friend Lady Coffey for her amendments that comprise this group, and I speak in support of them. They bring much needed clarity and constitutional discipline to the question of to whom the Secretary of State may delegate important public functions. Clause 89, as drafted, grants the Secretary of State, as my noble friend has explained, broad discretion to delegate enforcement and other key responsibilities to a public authority. However, the current definition of that term is overly expansive. It could include not only departments under direct ministerial control, but also non-ministerial departments and other bodies with a degree of operational independence from the Government, which raises fundamental issues of accountability. If enforcement powers, which could be potentially intrusive and far-reaching, are to be delegated, they should be exercised by those within the direct chain of ministerial responsibility. They are civil servants who operate under the authority of Ministers and who are, in turn, accountable to Parliament. Amendment 267ZA, therefore, rightly confines the scope of Clause 89 to public authorities that are comprised of civil servants and are not non-ministerial departments. That would ensure such functions are not handed to bodies that lack clear ministerial oversight or democratic accountability. Amendment 267AA serves as a necessary consequential safeguard because it ensures that any legal substitution of the Secretary of State with another authority in the eyes of the statute is similarly limited to such core public bodies. Without this clarification, we risk a situation where statutory references to ministerial powers are extended, potentially without scrutiny, to entities with a more ambiguous constitutional status. This is not about casting aspersions on the competence or integrity of non-ministerial departments. Many do good work, but they are deliberately designed to operate at arm's length from Ministers. They should not be the recipients of powers that the public rightly expects to be exercised under ministerial responsibility.

My Lords, I thank the noble Baroness, Lady Coffey, for Amendment 266A, 267ZA, 267AA and 267AB.

23:15:00

On Amendment 266A, the labour market is constantly evolving, and new challenges are always emerging. Flexibility will therefore be key to the success of the fair work agency. The power to extend the remit of the fair work agency and the ability to delegate functions to other public authorities are vital to that. For example, it is the Government’s intention that the fair work agency will have responsibility to enforce the minimum wage. The Bill will allow certain functions to be delegated to other bodies, in the same way that HMRC currently enforces the minimum wage on behalf of the Department for Business and Trade. However, the amendment tabled by the noble Baroness would completely undermine this. It would restrict our ability to make consequential amendments that might be necessary to ensure effective delegation where we have additional rights in the scope of the fair work agency’s enforcement remit. An effective fair work agency will benefit businesses and workers, and I am sure this is something that we all want to see up and running without any further delay.

On Amendments 267ZA, 267AA and 267AB, we have been very deliberate in the drafting of the Bill. Only those functions which are appropriate for delegation can be delegated. Moreover, Clauses 87 and 89 provide a solid legal basis for actions taken by staff in public authorities when carrying out a delegated function. This ensures clear lines of accountability for any actions taken. I therefore question why the noble Baroness thinks it is necessary to prevent the Government potentially delegating the Secretary of State’s delegable functions to a non-Ministerial department or another non-departmental public body in which staff are classed as public servants.

We must remember, of course, that the gangmasters’ licensing regime and the enforcement of certain labour abuse and modern slavery protections are currently carried out by the staff of the Gangmasters and Labour Abuse Authority, who are also public servants. They are not civil servants, yet they do an excellent job in carrying out vital work to protect some of the most vulnerable in our labour market. I hope noble Lords can see it is unnecessary to limit our ability to delegate functions in this way. I therefore urge the noble Baroness to withdraw her amendment.

I also highlight that the recent report by the Delegated Powers and Regulatory Reform Committee did not raise any concerns about this power as currently drafted. The additional scrutiny this amendment calls for would place a massive burden on parliamentary time.

With these points in mind, I ask the noble Baroness, Lady Coffey, to withdraw Amendment 266A.

I thank the Minister for his response. I am interested in his answer that, “Oh, well, they are already a non-departmental public body, so why am I bothered?” Well, why are the Government bothering to make this an executive agency and bring the powers under the Secretary of State? They are doing this themselves. I am struck that a lot of the legislation here is getting rid of non-departmental public bodies. By the way, they are not directly accountable to Ministers, and Ministers cannot direct them. That might satisfy the noble Lord, Lord Carter of Haslemere, but at no point did the Minister address Amendment 267AB, which talks about subsection (6). He did not address what is probably my key point in the group of amendments about the definition of a public authority. I am concerned about that and will certainly revisit it on Report. Given the late hour and that there are still two groups to go, I would be happy if the Minister would write to me and the Committee before then on that issue, as it was the key part of what I wanted to talk about. I will not trouble the Committee any further at this point and I beg leave to withdraw Amendment 266A.

Amendment 266A withdrawn.

Amendment 267 not moved.

Schedule 7, as amended, agreed.

Clause 88 agreed.

Clause 89: Delegation of functions

Amendment 267ZA not moved.

Amendment 267A

Moved by

267A: Clause 89, page 108, line 17, leave out paragraph (b) and insert— “(b) the conduct of, but not the decision as to whether the Secretary of State will bring, proceedings by virtue of section 113 (power to bring proceedings in employment tribunals).” Member's explanatory statement This amendment seeks to ensure that the Secretary of State cannot delegate the decision to bring proceedings on behalf of employees.

My Lords, these amendments address important gaps in the Bill, ensuring fairness, clarity and accountability in the enforcement of employment rights. Amendment 267A relates to Clause 89 and the delegation of the Secretary of State’s functions. Currently, the Bill allows delegation of functions, including enforcement, but does not explicitly restrict the delegation of the decision to bring proceedings to employment tribunals. This amendment would ensure that while the Secretary of State is delegating the conduct of proceedings, the crucial decision to initiate legal action remains with the Secretary of State. Without this safeguard, delegated bodies could independently decide whether to bring legal claims, potentially leading to inconsistent decisions, lack of ministerial accountability and confusion about who holds ultimate responsibility. Maintaining ministerial control over such decisions is essential to preserve political accountability and to ensure decisions are made with proper oversight. Amendment 271B focuses on Clause 113 and seeks to clarify the scope of claims that the Secretary of State may bring. The Bill currently refers broadly to “any enactment”, which risks allowing the Secretary of State to bring claims on a wide range of employment issues, including individual employment rights traditionally pursued by workers themselves. This amendment narrows that scope to relevant labour market legislation and Parts 1 to 4 of the Employment Rights Act 1996, ensuring that government enforcement targets systemic labour market regulation issues such as pay and working conditions, rather than individual employment rights or disputes. Without this restriction, there is a risk of governmental overreach into private employment matters, diluting resources and causing confusion about the limits of state intervention. Amendment 271C addresses a practical and vital issue regarding claims that workers have already lawfully settled. Under current law, individuals can settle employment claims following independent legal advice, providing certainty to both employers and employees. This amendment prevents the Secretary of State bringing claims that had been settled in accordance with Section 203 of the Employment Rights Act 1996. Without this amendment, there is a danger that settled claims could be reopened by the Government, undermining the finality of agreements and subjecting employers to repeated litigation, even after fulfilling their obligations. Such uncertainty would damage trust in settlement processes and could discourage both workers and employers from entering into settlements. Amendment 272ZA concerns the financial protection of workers in tribunal proceedings brought or conducted by the Secretary of State. It ensures that where an employment tribunal orders costs against a worker, such as legal costs or wasted costs, these costs must be met by the Secretary of State rather than the individual worker. This protection is critical, because workers who had not themselves initiated proceedings should not bear the financial burden of litigation costs. Without this safeguard, workers could face significant personal financial risk, deterring them from seeking support from the Secretary of State and ultimately restricting access to justice. Employers might then attempt to recover costs from these workers, imposing unfair hardship and undermining the purpose of public enforcement. I beg to move.

My Lords, I have Amendment 272 in this group. When an Act of Parliament creates rights and duties, it usually then allows those who benefit from the rights and duties to enforce them in law, which in the case of employment matters is via the employment tribunal. This Bill fundamentally changes that and inserts the Secretary of State whenever he or she wants to intervene to take up cases that employees do not themselves want to pursue. It also interferes in the order of things by providing a back door route to legal aid for employees, which is not covered by the normal legal aid system. This part of the Bill is simply going to increase the number of cases heading towards the employment tribunal. As has been debated on several occasions, that system is already under massive stress, and it does not make any sense to stress it any further. I therefore support all the amendments in this group. My own Amendment 272 merely states that the Secretary of State has to meet a public interest test if he or she wants to use the Clause 91 power to take over a case that an employee does not wish to pursue themselves. As drafted, there is no constraint whatsoever on the Secretary of State’s use of the power. The Secretary of State can simply find out one morning that an employee has a potential case and is not going to do anything about it, and decide to take it over. A public interest test would at least make sure that the Secretary of State intervenes in matters where there is a genuine national interest in the case being pursued. I suspect that the Secretary of State will be pursued and lobbied by various organisations, quite possibly trade unions, who will see this provision as another weapon in their armoury to have a go at certain large employers, particularly where those employers have not been particularly interested in playing along with whatever trade unions want to do with them. The power is an important departure from the normal way of enforcing rights and duties, so guardrails in the legislation surrounding the use of the power are essential. There is absolutely nothing in the current Bill. My first instinct was to delete Clause 91 entirely. As far as I can tell, no case has been made for its existence. But I can just about construct a scenario in which the Secretary of State concludes that there is a genuine public interest in overriding the wishes of an employee and pursuing the case in the circumstances I have described. I would expect such a case to be very unusual, and I hope the Minister agrees. Because of that, we should be looking to restrain the power in some way. The words I have used may not be the right words, but the essence of what I am trying to achieve is to reduce into something more reasonable an unconstrained power to completely subvert the normal way in which rights and duties are specified by Parliament and open to enforcement.

I will speak to Amendments 272B and 272C in this group in the name of my noble friend Lord Jackson of Peterborough. I will also speak to the other amendments, particularly Amendment 272, which has just been spoken to by my noble friend Lady Noakes. She has hit the nail on the head: how often is this going to be used to go beyond what has been requested—for example, a worker not intending to take a case forward, such that it could still end up in a tribunal? I am conscious that we will return to Clauses 113 and 114 on Wednesday, so I will be brief on Amendments 272B and 272C. Even if the Minister cannot respond today on Amendment 272C, can she say what is meant by “any other form of assistance”? “Legal advice” and “legal representation” are pretty well understood, but what else? There are genuine concerns about this starting to become a blank cheque for almost anything with regard to employment law. While of course the House of Lords does not have financial privilege, it is important to still be mindful of where this could go.

23:30:00

In his Amendment 272B, my noble friend seeks to add employers to Clause 114(1), which states:

“The Secretary of State may assist a person”,

so that the Secretary of State may assist an employer too. I have not fully discussed with him entirely what is behind his amendment, but I think there is an element of fairness here. I think he is thinking of small businesses in particular. To that end, it would be useful, even if not tonight, to get into the detail of what

“any other form of assistance”

is and to recognise the sensible guardrails that my noble friend put forward, as well as what my noble friends on the shadow Front Bench articulated about the costs that would be attributed to the worker that would be at risk, and which certainly need to be borne by the Secretary of State.

My Lords, I thank the noble Lords, Lord Sharpe and Lord Jackson, and the noble Baroness, Lady Noakes, for tabling their amendments. This Government are committed to ensuring a fair playing field for all employees and businesses. This is why the Secretary of State will have the power to bring proceedings in place of a worker: it will mean that all employers are held to the same standards. Amendments 267A, 271B, 271C and 272ZA have been tabled by the noble Lord, Lord Sharpe of Epsom. While I appreciate the noble Lord’s intentions behind them—seeking fairness, clarity and accountability—I believe that they undermine those objectives. I have major concerns about Amendment 267A. A fundamental principle of the fair work agency is that it will have operational independence. As we have debated, the Secretary of State’s involvement will be at strategic level only. This amendment would undo all that; it would explicitly make any use of the civil proceedings powers dependent on a political decision. This goes against the whole thrust of what we have been debating up to now, and we therefore cannot support the amendment. Amendment 271B would exclude legislation, such as on family leave, unfair dismissals or redundancies, from the scope of this power. These issues can have a substantial impact on people’s working lives and they are part of the employment package. It is right that the fair work agency has the discretion to support enforcement in these areas and to ensure that employees get what they are entitled to. Amendment 271C is unnecessary. The Bill already builds in appropriate safeguards to prevent cases being relitigated. In considering whether a worker will bring proceedings, the Secretary of State will have to consider whether a worker has already contacted ACAS. If they have, it would serve as a strong indicator that they are contemplating proceedings. Therefore, where a settlement is being discussed, or has already been reached through ACAS, it is highly unlikely that the Secretary of State would pursue a claim. This amendment would create a rigid prohibition that may have unintended consequences. The Government would be restricted from acting where new evidence shows that a settlement was reached under duress. On Amendment 272ZA, tabled by the noble Lord, Lord Sharpe of Epsom, the Bill already makes it clear that any reference to a worker in proceedings brought by the Secretary of State should be read as including the Secretary of State. In practice, this means that, while it is for the tribunal to decide whether or not to award costs, a costs order could be made only in respect of a party to the case. This would be the Secretary of State, where they are the party that has brought this case. Therefore, this makes this amendment unnecessary. On Amendment 272, tabled by the noble Baroness, Lady Noakes, in the worst cases of serious exploitation and intimidation, a worker may want to bring proceedings but fear the repercussions they may face from the employer should they be de-anonymised. Allowing the Secretary of State to take a case forward without consent would make it harder for employers to attribute blame to individual employees and also ensure that action could be taken against exploitation. Ultimately, I agree with the noble Baroness that this will take place only in exceptional circumstances, not least because it is more difficult to argue a case without the assistance of the worker. Nevertheless, where there is a breach of employment rights, there should be consequences. The fair work agency will decide the most appropriate route of enforcement, and it is important that in the most serious cases we allow this power as an option. Finally, on the Amendments to Clause 114 from the noble Lord, Lord Jackson, the existing drafting of Clause 114 states: “The Secretary of State may assist a person”. This drafting was carefully thought through and is deliberately broad and inclusive. It includes both natural and legal persons, so it already covers both employers and their legal advisers. This amendment does not alter the substance of the clause, but merely restates what is already covered and therefore risks introducing confusion. On the noble Lord’s Amendment 272C, Clause 114 has been carefully monitored against the provisions found in Section 28 of the Equality Act 2006, which also provides for any other form of assistance. This language has been used to ensure flexibility and inclusivity in the types of support that may be provided. This is neither novel nor excessive and is limited to assistance in the context of civil proceedings. To narrow the clause in the way this amendment does would compromise its effectiveness and undermine its accessibility. On that basis, I hope noble Lords will not pursue their amendments and I ask the noble Lord, Lord Sharpe, to withdraw his Amendment 267A.

My Lords, I thank my noble friend Lady Noakes for providing an important guardrail: the idea that the Secretary of State has to pass a public interest test. I do not think the Minister gave us a direct answer to that suggestion. So far as my noble friends Lady Coffey and Lord Jackson of Peterborough are concerned, there are huge concerns about the way this will affect small businesses in particular. Again, I do not think the Minister addressed that particular point. I regret the fact that the Minister has not acknowledged the importance of these significant gaps in the Bill. It is concerning that the challenges inherent in delegating the Secretary of State’s enforcement functions to others who may lack the necessary competence or accountability are not being fully recognised at the present time. How does such delegation genuinely serve the interests of workers if it risks inconsistent decision-making and a lack of clear responsibility? Moreover, the Bill fails to address the very real issue of claims that have already been settled. Employment tribunals are already struggling with an overwhelming backlog, and reopening settled cases would only exacerbate this problem. Surely, we have got to avoid a situation where the Secretary of State is empowered to reopen disputes that workers and employers believed were finally resolved. This not only causes unnecessary anxiety and uncertainty for all parties involved but threatens to damage the fragile trust and relations between employers and employees. If this Bill is to be truly effective and fair, it has got to acknowledge these realities: —ignoring them will only undermine the very goals it seeks to achieve. In the meantime, I beg leave to withdraw the amendment.

Amendment 267A withdrawn.

Amendments 267AA and 267AB not moved.

Clause 89 agreed.

Clause 90: Advisory Board

Amendment 267AC

Moved by

267AC: Clause 90, page 108, line 38, at end insert— “(1A) The Secretary of State must appoint a Chair of the Advisory Board who must be qualified to practice as a barrister and have been made King's Counsel.(1B) The term of the Chair’s appointment must be for a maximum of four years, with a maximum appointment of two terms, and with other conditions as may be specified by the Secretary of State.(1C) The Chair’s appointment must be approved by a relevant select committee of the House of Commons.”

My Lords, I shall speak also to Amendments 267BA, 267BB and 267D in my name. This is where we get to the composition of the board. In this group of amendments, the most important that I have tabled is probably Amendment 267D. It would remove the words “trade unions” but would insert “employees”. I am conscious that, of course, trade unions represent employees, but I was surprised by the composition of the board: that the word “employee” did not turn up as to who the members of the board were supposed to represent. To that end, one reason why I laid Amendment 267D is that we should remember that only 22% of UK workers belong to a trade union. That leaves 78% who, at the moment, may not necessarily be represented in the consideration of the advisory board. I think it is important that we rectify that. It is possible that independent experts and others may be involved. By the way, this happens on a variety of other bodies—I think it is so on the Health and Safety Executive. Usually, the organisations representing employees are trade unions, but the point is made that it does not have to necessarily be trade unions. It could be professional associations—that has happened in the past as well, from my recollection. In looking at the composition of the board, I noticed that my noble friends on the Front Bench have come up with a slightly different approach. Mine has tried to be pretty straightforward and to, in effect, insert an independent chair, who should be put forward to the relevant committee in the House of Commons for consideration before their appointment. Deliberately, I have put in some specifications as to who should chair the board. Recognising that this is all going to be about enforcement of legislation, considering a wide range of issues including taking legal action when it has not been requested by people, by workers, I have specified that we should consider this board, which is going to be very important to the Secretary of State because there are a number of situations where the legislation says that the Secretary State “must” consult the advisory board. To that end, it would be worth while to have somebody who is a qualified barrister, a KC, but who shows a particular level of accomplishment without needing to look to tribunal judges or similar to chair that board. I beg to move.

My Lords, I shall speak to Amendments 267B, 267C and 268A standing in my name, and I also thank my noble friend Lady Coffey for introducing her amendment, and, of course, my noble friend Lady Noakes for signing them. Amendments 267B and 267C are not mere technicalities; they are a matter of principle. They are a matter of representation and ensuring that the new fair work agency advisory board truly reflects the full diversity and complexity of the modern UK labour market. As drafted, Clause 90(4) proposes a tripartite board composed equally of individuals representing trade unions, employers and so-called independent experts. While the intention of the balance is commendable, the provision as it stands is both overly simplistic and insufficiently representative of the contemporary workface. As my noble friend highlighted, trade unions, for all their historic importance, now represent only 22.4% of employees across the United Kingdom, 12.3% of the private sector—so the bulk of those are in the public sector. As my noble friend also pointed out, that leaves a staggering 77.6% of working people whose voices, interests and concerns are not captured through union representation. To restrict employee representation on this advisory board solely to trade union nominees is to exclude the overwhelming majority of the workforce. That is neither democratic nor representative. It is outdated. This amendment seeks to rectify that imbalance by introducing a more inclusive and nuanced structure. It proposes that the board includes two representatives from the trade unions, rightly acknowledging their important role; three representatives of employees beyond the trade union movement, an expansion that ensures that the voices of non-unionised workers, gig economy participants, freelancers and precarious workers are also heard; five employer representatives to be appointed only after the Secretary of State has sought advice and recommendations from recognised business representative organisations, a process that will ensure that these appointments are rooted in sectoral legitimacy rather than political expediency; and three independent experts to provide critical objective insight grounded in academic, legal or practical labour market expertise. That structure would do three things. It would broaden representation, professionalise appointments and future-proof the board against the ever-evolving nature of work.

23:45:00

The employment landscape in 2025 is vastly different from that of the 1970s and 1980s. Today’s workers include not only factory employees and office staff but app-based couriers, home-based freelancers, zero-hours contract carers and part-time retail assistants. If this board is to advise the Secretary of State credibly on labour market enforcement, it ought to reflect those realities. The consequences of failing to adopt this amendment are therefore significant, because a board dominated by voices from only a fraction of the workforce risks formulating narrow, unbalanced or even ineffective advice. It would lack legitimacy in the eyes of the public and credibility among stakeholders. Importantly, it would miss a historic opportunity to craft labour market policies that work not just for some but for all.

This amendment also introduces a valuable process improvement: that the Secretary of State should consult with business representative organisations when appointing employer representatives. This is not a formality but a vital safeguard against cronyism, ensuring that those selected to represent employers do so with the endorsement and trust of their sector. It should encourage diversity among employer voices across small businesses, large corporations and sector-specific industries, rather than allowing a narrow few to dominate the conversation.

On Amendment 268A, as it stands Clause 90(5)(a) defines an independent expert simply as someone who

“is not a person falling within paragraph (a) or (b) of subsection (4)”—

that is, not someone representing the interests of trade unions or employers. At first glance, that seems a clear and logical way to distinguish independence from affiliation. However, on closer inspection, the provision introduces a serious risk. It is a loophole that could allow for discretionary exclusion of qualified neutral individuals based on subjective interpretation. The Secretary of State could, intentionally or otherwise, disqualify someone as an independent expert merely by asserting that they appear to align with the interests of one group or another. This creates a de facto veto that could be used, however subtly, to influence the ideological composition of the board.

The amendment seeks to address this risk with a carefully worded clarification. It replaces the current phrase with

“is not a person who could reasonably be said to be considered to represent the interests of trade unions, employees, or employers”.

By requiring that an individual could reasonably be said to represent one of the interest groups, the amendment would provide a safeguard against arbitrary decision-making. It would ensure that the independence test is principled and consistent rather than manipulable. Independence must not be treated as a label of convenience that is applied or withheld at will by the Secretary of State to shape the board’s voice.

Let us be clear: the role of independent experts on this board is to bring evidence-based insight, practical knowledge and analytical rigour to complex questions of labour market enforcement. They could be legal scholars, economists, public policy professionals, former regulators or data scientists with expertise in employment trends and rights. Disqualifying such individuals on the basis of perceived alignment with employers or unions, however tenuous, would only undermine the quality and credibility of the board’s advice.

My Lords, I am grateful to all noble Lords for tabling these amendments. I will begin by addressing Amendments 267AC and 267BB, which relate to the chair of the advisory board. The Bill already provides for a strong and credible chair, and we are confident that appropriate appointments can be made under the current drafting. These amendments would significantly narrow the pool of qualified candidates and exclude highly capable candidates. There is no precedent for such restrictions among similar bodies. For example, the current chair of the Equality and Human Rights Commission is the noble Baroness, Lady Falkner of Margravine. She brings deep expertise in public policy, regulation and public service to the role, but she is not a practising barrister. The focus should be on appointing the best candidate through a rigorous merit-based process, not restricting eligibility by profession. Moreover, there is no precedent for these amendments. Similar bodies, such as the Low Pay Commission and the Advisory, Conciliation and Arbitration Service, do not impose this level of restriction or require parliamentary approval. These models work precisely because they allow the Secretary of State to appoint individuals with diverse and complementary expertise. We fully support a strong, credible chair, but that is best achieved through a robust and flexible appointments process, not through rigid statutory constraints or exclusions. On Amendments 267B and 267BA, tabled by the noble Lord, Lord Sharpe, and the noble Baroness, Lady Coffey, we have no objection in principle to a larger advisory board, but this should be balanced against an increased cost to the taxpayer. In practice, we anticipate there will be nine members of the board mirroring the make-up of the Low Pay Commission, which has operated successfully for 25 years. The current drafting provides flexibility so that the Secretary of State may appoint more than nine members, but it is unwise to lock a specific number into primary legislation without operational justification. The amendment would create a fixed number of advisory board members. Clause 90 already provides for what the amendment seeks to achieve. Turning to Amendments 267C and 267D, these amendments risk compromising the balanced representation of the advisory board. The current drafting has been carefully chosen to reflect the social partnership model that has served the Low Pay Commission and ACAS well for so many years with a mixture of employer, union and independent representation. Amendments 267C and 267D also seek to broaden employee representation on the advisory board by reducing the emphasis on trade unions. Let me be clear: trade unions serve to protect and advance the interests of all workers, and they are best placed to represent workers’ interests on the advisory board. Moreover, the Secretary of State has broad discretion to appoint members with relevant expertise as independent experts. The Government are also committed to ongoing engagement with relevant stakeholders through a variety of formal and informal means, so the advisory board is only one part of the landscape. This leads me on to Amendment 268A, also in the name of the noble Lord, Lord Sharpe. The independent experts are intended to bring deep subject matter expertise and a perspective not already captured by the other members of the advisory board. The existing drafting already protects against partiality, as an independent expert is a person who does not fall within the groups mentioned in Clause 94. The Bill already provides a sound and balanced framework for the board’s composition, one that is adaptable, proportionate and future-proof. I must therefore resist these amendments. I must also respectfully resist Amendment 269, tabled by the noble Baroness, Lady Noakes, which risks undermining the very purpose of the advisory board. Transparency in governance is vital, and the Government share the commitment to ensuring appropriate parliamentary scrutiny. Placing a statutory duty on the advisory board to publish its advice could compromise that level of confidentiality and flexibility which we believe is essential for it to carry out its role effectively. Mandating a separate annual report also risks formalising what should remain a responsive advisory relationship, potentially limiting the board’s ability to offer genuine, timely and informal guidance on emerging issues. Introducing even more reporting requirements would place a confusing and unnecessary reporting burden on enforcement teams, potentially diverting staff and resources away from front-line inspection and enforcement work, where they are most needed. With this in mind, I therefore ask the noble Baroness to withdraw Amendment 267AC.

My noble friend Lady Coffey and I raised the increasing statistical irrelevance of the trade unions. I do not think the Minister addressed that point. She also seemed to write off the idea of the advisory board amendments that we proposed, on the basis that they would be expensive to the taxpayer. But Clause 90(6) says: “The Secretary of State may pay such remuneration or allowances to members of the Board as the Secretary of State may determine”. They could determine to pay nothing, presumably, so why would that be an expense to the taxpayer?

I thought I covered those points. As I said, we anticipate that the advisory board will have nine members, but we are building in some flexibility. We were trying to avoid locking a specific number into the primary legislation without any operational justification. I think that answers that point. On the point about the unions, of course, if we stick with the social partnership model, they will be in a minority anyway. They will have the expertise and the knowledge to represent all employment issues on behalf of the workers.

My Lords, we heard from the Minister justification for keeping it as it is, but I reiterate the point that employees are not mentioned anywhere. In terms of the social partnership, it may be worth her looking at the Health and Safety Executive board in that regard. Ultimately, this should be extended to make sure it is about not just trade unions representing workers but a wider range of other bodies that do that very adequately. I beg leave to withdraw the amendment.

Amendment 267AC withdrawn.

Amendments 267B to 269 not moved.

Clause 90 agreed.

Clause 91: Labour market enforcement strategy

Amendments 270 and 271 not moved.

House resumed.

House adjourned at 11.58 pm.