Lord Leong (Lab)

My Lords, I thank the noble Baroness, Lady Penn, for her Amendment 280 and for meeting with my noble friend Lady Jones and me last month to discuss this very important issue. I reassure the noble Baroness that the Government are already taking action to tackle the main risks that arise from substitution, including illegal working. As she mentioned, substitution is a complex area on which we are still gathering data. An ONS online survey of around 10,000 businesses from across the UK, published this month, found that close to 3% of UK businesses use substitution clauses. While we do not know the number of substitution clauses used in the gig economy, we know that this could impact a large number of individuals. Although estimates of the number of gig economy workers vary vastly in various surveys, from around 500,000 to 4.4 million people—the noble Baroness mentioned some 4.7 million people—the CIPD finds that roughly 75% of those in the gig economy consider themselves to be self-employed. We have introduced an amendment to the Border Security, Asylum and Immigration Bill, as was mentioned by the noble Baroness, to extend the scope of employers required to carry out right-to-work checks to those who engage limb (b) workers or individual sub-contractors, such as those working in the gig economy. This requirement will cover those working as substitutes. We understand the complexity of these issues, and of employment status more widely, and that is why we have committed to consult in detail on a simpler framework for employment status. Comprehensive consultation will better account for the full range of today’s employment relationships, while addressing the minority of employers who will seek to avoid legal obligations. We were clear that some reforms in our plan to make work pay will take longer to undertake and implement. We do not have a set timeline for consulting on employment status at this point, and I assure the noble Baroness that we will keep her up to date as and when this happens. We understand the complexity of employment status, as I mentioned earlier, and we are definitely committed to consulting in detail. Comprehensive consultation will better accounts for the full range of today’s employment relationships, while also addressing the minority of employers who will seek to avoid legal obligations, as I mentioned. The noble Baroness’s amendment would create significant additional reporting burdens for businesses and would not necessarily change how those businesses use substitution clauses, as I mentioned in my earlier speech. I therefore ask the noble Baroness, Lady Penn, to withdraw Amendment 280.