Contribution
My Lords, in moving Amendment 1, I will also speak to Amendments 283 and 327.
In February 2023, Keir Starmer launched Labour’s five missions. The first is to get the UK’s economic growth to the highest sustained level in the G7 by the end of Labour’s first term. I need hardly remind your Lordships that it is with that mission, and the four others, that the Labour Party went on to win the general election with a majority. Since then, the Government have unwisely raised employers’ NICs and introduced this Bill. It is through those lenses that business views the Government’s attitude towards it.
Amendment 1 is an attempt to set this legislation in context, and I thank the noble Lords, Lord Sharpe of Epsom and Lord Hunt of Wirral, for also signing it. It was quite difficult to come up with wording that the PBO would let past its eagle eyes, but I am sure that the Minister will not find much of this objectionable. For example, proposed new paragraph (a) sets out the need for “fairness and security” as drivers for the Bill; I am sure the Minister will agree with that. Proposed new paragraph (c) is well represented in this Bill, as large parts of it set out new rules around trade unions.
However, I will spend some time discussing proposed new paragraphs (b) and (d). I cannot read this Bill without the feeling that it envisions just two states of employment—happy workers represented by unions and abject employees working in non-unionised concerns—but, of course, that is not true. Even in the very welcome conversations with the Minister, there seems to have been little recognition that the vast majority of people in this country are in employment where the facilitation of co-operation agreements between employers and workers is not automatically dependent on their union status. Let us remind ourselves that, for most people, those co-operative arrangements work pretty well, and that the proportion of UK employees who are trade union members is around 22% in this country. Constructive workplace relations can be forged in many ways other than via direct representation of employees by their unions.
When the Minister generously gave her time to meet with me on this Bill, she explained that discussions between government, employers’ organisations and the unions had been constructive and amicable. I am sure they were, but those selfsame employers’ organisations have also raised serious alarm over this Bill. The British Chambers of Commerce, the CBI, the IoD, the FSB and Make UK all sent a joint letter, which I am sure all noble Lords have received and read. The B5, as it is known, is not alone: all manner of industries—including hospitality, food and drink, and employment agencies—have raised serious concerns about the Bill. The telling phrase in the B5 letter is:
“For us the challenge has never been what the government wants to achieve, but the unintended consequences of how they implement it. Unfortunately, the Bill locks in several irreversible policy directions that will force business to make difficult choices between jobs, investment and growth”.
The Minister may well say that she is getting equally forceful lobbying from the unions. Indeed, I believe that the noble Lord, Lord Hendy, will provide ample evidence of that with his later amendments. She may say that the Government are pitching this Bill in the middle of these respective positions—and she may claim, on that basis, that the Bill is in the right place. However, Governments are elected not to work out the average position of policy but to make the right decisions. I ask the Minister to take on board the concerns of business and, importantly, to recognise that there are issues in this Bill, which, if not addressed, will impede the Government’s chances of delivering their mission of economic growth.
Small and medium-sized enterprises are the backbone of the UK economy, accounting for a huge proportion of the business population and employing approximately 16.7 million people—around 61% of private sector employment, according to data from the Federation of Small Businesses. In that regard, the Minister should recognise that the impact of many of the measures in the Bill will disproportionately affect small and medium-sized businesses. These smaller businesses have neither the administrative horsepower nor the reservoir of human energy required to meet the collection of tasks that the Bill will introduce. Given their economic footprint and vital role in local communities, SMEs must be central to the purpose of the Employment Rights Bill. Placing SMEs at the heart of the Bill’s purpose offers an opportunity to foster better employment relations while supporting enterprise, resilience and long-term growth.