Baroness Noakes (Con)

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?