House of Lords
Friday 24 March 2023
Prayers—read by the Lord Bishop of Worcester.
Energy Bill [HL]
Order of Consideration Motion
That the amendments for the Report stage be marshalled and considered in the following order:
Clauses 1 to 16, Schedule 1, Clauses 17 to 21, Schedule 2, Clauses 22 to 32, Schedule 3, Clauses 33 to 52, Schedule 4, Clauses 53 and 54, Schedule 5, Clauses 55 to 95, Schedule 6, Clauses 96 to 128, Schedule 7, Clause 129, Schedule 8, Clauses 130 to 133, Schedule 9, Clauses 134 to 154, Schedules 10 and 11, Clause 155, Schedule 12, Clause 156, Schedule 13, Clause 157, Schedule 14, Clauses 158 to 163, Schedule 15, Clauses 164 to 170, Schedule 16, Clauses 171 to 199, Schedule 17, Clauses 200 to 234, Schedule 18, Clauses 235 to 249, Schedule 19, Clauses 250 to 254, Schedule 20, Clauses 255 to 270, Title.
Mobile Homes (Pitch Fees) Bill
My Lords, I thank noble Lords across the House for their support for this important piece of legislation. I am very grateful to the Legislation Office and the Minister at the Department for Levelling Up, Housing and Communities for all the help and support I have received on the Bill’s journey. I also record my thanks to Sir Christopher Chope for taking the Bill through the other place. As I stated at Second Reading, the purpose of this legislation is to bring fairness to park home residents. Through this short but important Bill, we are doing that. I therefore beg to move that the Bill do now pass.
My Lords, I rise very briefly to say that this is a sensible, practical Bill, and we have supported it all the way through its passage through the House. I thank the noble Lord, Lord Udny-Lister, for steering it so well through this House and Sir Christopher Chope for taking it through the other place.
My Lords, I am pleased to give my support and that of the Government to the Bill. I pay tribute to my noble friend Lord Udny-Lister for his expert and committed stewardship of it, and I thank all noble Lords who have participated in its passage through your Lordships’ House. It is also right that we acknowledge and thank my honourable friend the Member for Christchurch for his work in the other place on this important Bill. It is down to him and to my noble friend that we have the Bill in front of us today.
This simple but effective Bill is one step in making a much-needed change to the lives of all park home residents. When enacted, it will help residents with cost of living pressures by changing the inflationary index used in pitch fee reviews from RPI to the lower CPI. This will mean that pitch fee increases and residents’ income will be subject to the same measures of inflation. But there is still more we can and must do to improve the lives of those residents, and we will continue our reform programme to bring about more effective and modern regulation of the sector. Once again, I thank my noble friend Lord Udny-Lister and express my strong support for his Bill.
Universal Credit (Removal of Two Child Limit) Bill [HL]
My Lords, I request your Lordships’ patience for a few minutes as I make a few remarks. I express my deep gratitude to all those who have supported this Private Member’s Bill and the effort to remove the two-child limit. I thank those across all Benches who have contributed during the passage of the Bill. I particularly thank the noble Baroness, Lady Stedman-Scott, who, for much of the time I sought to highlight the wrong of the two-child limit, was the Minister who had to respond. She was always willing to engage and debate with me. We did not reach agreement, but I publicly thank her for the way that she worked with me.
I recognise particularly the work of the Child Poverty Action Group, the Joseph Rowntree Foundation, the North East Child Poverty Commission, and their staff, who have provided valuable support and encouragement throughout this process. I publicly thank my two parliamentary assistants who have worked with me on the Bill, Emily King and Becky Plummer. They have been superb. I also thank Kim Johnson MP, who has agreed to take the Bill forward in the other place, and many other MPs who have already promised their support.
In less than two weeks, it will be the six-year anniversary of the introduction of the two-child limit, restricting universal credit support to only the first two children in a family. The policy was originally introduced to ensure that
“people on benefit should face the same choices as those in work and those not on benefits”,
while driving real action to
“make the biggest difference to the most disadvantaged children now and in future.”—[Official Report, Commons, 20/7/15; cols. 1258-63.]
It has indeed made a difference to those children’s lives, though regrettably not the one that was intended. While the policy aimed to address the root causes of poverty, the two-child limit has instead become the greatest contributor to driving more children into poverty. It impacts an estimated 1.3 million children, disproportionately affecting children of certain religions and ethnic-minority backgrounds.
Just this week, Barnardo’s has included in its new report, A Crisis on our Doorstep, a recommendation that the policy should be removed. Most families that it applies to are already in work, negating the reasoning behind the policy of ensuring that those on benefits face the same decisions as those in work. In some circumstances, the policy has forced parents to instead make a different decision—the choice between terminating an otherwise wanted pregnancy or raising a family for which they cannot properly provide. That is a choice no parent should be faced with.
Life can be unpredictable, and larger families who fall on hard times, whether it is due to losing a job, falling ill or experiencing a pandemic, have no guarantee that they will be able to afford even the essentials. There is no longer a safety net to catch them and help put them back on their feet. My hope is that the Bill will change this. Through removing the two-child limit, each and every child will be valued, and children will no longer be reduced to a number but be seen as individuals with worth and potential. Ultimately, I hope that the Bill will mark one step towards making child poverty in this country a matter for the history books. I beg to move.
My Lords, I speak on behalf of my noble friend Lady Sherlock, who cannot be here today due to ill health. I will not detain the House for long, but I commend the right reverend Prelate on the perseverance he has shown in raising this issue with Ministers in every conceivable way, in Oral Questions and debates, by publishing reports, in meetings with Ministers, and now through a Private Member’s Bill. In doing so, he has given us the chance not just to discuss the important issue of the two-child limit but to highlight the growing problem of child poverty in Britain today. Sending the Bill to the other place will now give MPs the opportunity to reflect on the important issues it raises. However, before the Bill reaches them, it may be helpful if Ministers could do two things.
First, Ministers can clarify what they are trying to achieve through this policy, because it has felt a bit of a slippery target. It was initially about saving money to reduce the deficit, even though evidence now shows that the money the coalition Government saved on benefit cuts was then spent on tax cuts. Then it was about being fair to those in work, even though the two-child limit affects in-work benefits such as universal credit, and then, at least implicitly, it was to affect decisions on how many children people have. Since the evidence suggests that people hit by the two-child limit are not having any fewer children, and since most people hit are in work, can the Minister tell the House whether the policy has been a success?
Secondly, the right reverend Prelate asked at Second Reading whether the Government would introduce an impact assessment. That is not unreasonable, given that the policy has now been in operation for over six years. The then Minister, the noble Baroness, Lady Stedman-Scott, replied:
“To be truthful and straightforward, I cannot commit to an impact assessment. I do not believe, with what I know, that the Government would welcome from me the request that he has made”.—[Official Report, 8/7/22; col. 1228.]
The fact that Ministers in the other place would not like being asked to do it is not a good reason for the Government to refuse to tell us what the impact of the policy would be. Will this Minister be brave enough to go and ask the Secretary of State to produce an impact assessment? That would inform the debate in the other place rather well. I look forward to his reply.
My Lords, I am grateful to the right reverend Prelate for bringing the Bill to the House and giving us the opportunity to debate this important issue, and I thank those who have participated and engaged on the Bill.
The Government think that it is of utmost importance to support children and families and are committed to helping parents into work. That requires a balanced system that provides strong work incentives and support for those who need it, but which ensures a sense of fairness to the taxpayer and many working families who do not see their incomes rise when they have more children. We believe that the policy to support a maximum of two children is a proportionate way to achieve these objectives. That our overall approach is working is evidenced by the fact that, between 2016 and 2022, the number of people in couples with children in employment has increased by 372,000—a 2.7 percentage point increase in the employment rate for this group. However, we recognise that some claimants are not able to make the same choices about the number of children in their family. That is why exceptions have been put in place to protect certain groups.
Child benefit may be paid for all children, plus the additional amount in child tax credit or indeed universal credit for any qualifying disabled children or qualifying disabled young people. Additional help for eligible childcare costs through working tax credit and universal credit is available, regardless of the total number of children in the household.
The most suitable way to lift children out of poverty is by supporting parents into, and to progress in, work wherever possible. The Government have consistently said that the best way to support people’s living standards is through good work, better skills and higher wages. The reduction in the universal credit taper rate and the £500 increase to the work allowance, in addition to the normal benefits uprating, alongside the landmark Kickstart and Restart schemes, demonstrated my department’s commitment to supporting families to move into or to progress in work.
The Government clearly recognise that high childcare costs can affect parents’ decisions to take up paid work or increase their working hours, which is why the changes to the universal credit childcare element announced in the Spring Budget 2023 will provide generous additional financial support to parents moving into work and/or increasing their working hours.
The department will exempt any flexible support fund payment for up-front childcare costs made to childcare providers from the universal credit childcare cost calculation when parents move into work or significantly increase their working hours. In practice, this means that the parent will be reimbursed for up to 85% of that FSF payment, as if they had paid it themselves. This provides parents with a significant payment of childcare costs, up front, to use for their next set of childcare costs, thereby easing universal credit claimants into the universal credit childcare costs payment cycle.
The department will also increase the generosity of the universal credit childcare costs caps, allowing parents to claim back over £300 more for one child or over £500 for two or more children of their childcare costs per month. This increase is roughly in line with CPI since 2006, and will increase the caps from £646 for one child and £1,100 for two or more children to £950 and £1,600 respectively.
By September 2025, eligible working parents of children aged nine months to when they start school will be able to get 30 hours of free childcare in England.
The Bill introduced by the right reverend Prelate seeks to remove the limit on the number of children or qualifying young persons included in the calculation of an award of universal credit. The Government have a range of policies which support children and families across the tax and benefits system and public services. However, this requires striking a balance, and the Government’s view is that providing support for a maximum of two children in universal credit and child tax credit ensures fairness between claimants and those who support themselves solely through work.
As regards the noble Lord’s question to the noble Baroness, Lady Stedman-Scott, regarding an impact assessment, I will certainly feed that request back to the department.
I thank the noble Lord, Lord Kennedy, and the Minister for their comments, and I thank the Minister for agreeing to feed back about the impact assessment—that would be very helpful. It would serve the Government well to respond to all the reports that keep coming from the organisations that show how damaging this policy is in terms of increasing the number of children in poverty. This is not the time to reopen the debate, but the Minister will not be surprised to hear that I am not going to let this go.
Bill passed and sent to the Commons.
Co-operatives, Mutuals and Friendly Societies Bill
Relevant document: 30th Report from the Delegated Powers Committee
My Lords, I am delighted to present this Bill to your Lordships’ House today for its Second Reading. I thank all noble Lords who have signed up to speak and look forward to each of the contributions that will follow shortly.
I have been a supporter of co-operatives in all their forms for more than 40 years. I am one of a small group of Labour and Co-operative MPs and Peers sitting in Parliament. The Co-operative Party, of which I am a member, has since 1918 had an agreement with the Labour Party that it seeks representation on public bodies only jointly with it. The Co-operative Party today is proud to have 28 MPs, 16 Peers, 11 Members of the Scottish Parliament, 16 Members of the Senedd in Wales, five metro mayors and nearly 1,000 councillors elected in England, Scotland and Wales. I am a member of the Co-operative Group and, as detailed in my entry on the register, a director of the London Mutual Credit Union, one of the biggest credit unions in the United Kingdom. I first joined the old Royal Arsenal Co-operative Society 43 years ago—I know I do not look old enough—following a meeting with my noble friend Lady Thornton, who at that time was working for it; we have been friends ever since.
This is a small, two-clause Bill. It is another step along the road of reforming and developing the legislative framework to support the sector. I place on record my special thanks to the Member for Preston in the other place, Sir Mark Hendrick MP, for steering this Bill through the other place so skilfully, and also to Peter Hunt and Mark Willetts, the team at Mutuo, for the work they undertook in devising the Bill. I also thank officials at the Treasury for their work in getting us to the place today where the Government are happy to support the Bill. I am still struggling to get such a positive response to my other Private Member’s Bill on residential leasehold, but we struggle on with that one.
The Bill is all about protection. It is about creating the mechanism to enable mutual organisations to opt in to a restriction on the use of their assets. This is permissive, not mandatory. If a mutual organisation does not want to use the powers in the Bill, it does not have to. It allows the Treasury to make regulations that in turn will allow various mutuals, if they so wish, to opt in to a restriction on the use of their assets. Equally, those that do not elect to opt in are free to carry on as they do now. That is a very important point for the House to note, and one of the reasons why the Bill is structured the way it is. The Bill is necessary, as it enables a pathway to protect and preserve members’ accumulated assets from those who would like to mount a raid on them for profit and gain for themselves. In many cases, these assets are considerable and have been accumulated over many years and generations.
As part of our mixed economy, co-operatives, mutuals and friendly societies have their role to play, and the environment they operate in should be as supportive as possible, allowing them to remain true to their founding principles and flourish. This Bill will help them do that with the knowledge that there is a mechanism that they can take up to provide a layer of protection to maintain mutual capital for the purpose intended, if they themselves decide they need this protection.
There are important differences between companies and mutuals, which the Bill is trying to protect. Noble Lords will be aware that members of a company have the right to a share of the distributed profits, based on their shareholding, and to a share of the underlying value of the company. The more capital you own, the greater your share of the profits and the value of the company. Members of a mutual society, by contrast, generally have neither of those rights because, in mutuals, profits are generally not used as a mechanism for rewarding capital and members of a mutual do not have any expectation of or entitlement to a share in the increased value of the society.
As members of a mutual are not entitled to any share of its increased value, the amount by which the net asset value of a society exceeds the capital provided by members has no specific owner. It is in effect a legacy asset, held by the society for future generations, that enables it to provide for and invest in the future. It is a core part of a mutual’s identity. It represents the trading surplus accumulated by previous generations of members participating in their society’s business, in which they were always content to have no personal share. By implication, it is held for the benefit of future generations.
Seen through the lens of investor ownership, a capital surplus is a tempting asset for a windfall profit, which—if mutual members were replaced by investor shareholders —could be shared out among the shareholders. Capturing the asset is the usual incentive for demutualisation, which is when a capital surplus or legacy asset is divided up between the shareholders. When the mutual agreement between the former members, whereby they engaged with the society on the basis that they would not personally profit from its trade, is broken up, in short, any mutual purpose for a common good is replaced by a profit-driven purpose for private benefit.
The measures in place today provide only partial protection against demutualisation. There is currently no statutory mechanism for ensuring that surpluses, which previous generations never intended to be for private reward for anybody, remain committed to that wider public purpose. At present, it is not possible for an existing society, or those setting up a new society, to proscribe demutualisation. This leaves mutuals vulnerable to those aiming simply to liberate the legacy asset, share it out among those they choose and convert the business into an investor-owned company.
This has resulted in much of the UK’s building society sector being lost, and the businesses then either failing or being transferred into non-UK ownership. We all remember the names of those building societies that have long since disappeared, such as the Abbey National and the Bradford & Bingley. This has been bad for mutuality and bad for the economy, with damage being done to corporate diversity. Demutualised former building societies were mostly absorbed into the banks that failed in the banking crisis. Legislation is needed to help UK mutuals to preserve their legacy assets for the purpose for which they were intended, to maintain and encourage greater corporate diversity and to build a more resilient economy. Mutuals need to be able to incorporate appropriate measures into their constitutions with a statutory basis, either at the point of establishment or thereafter, with an appropriate level of member approval.
What does the Bill do? It disincentivises the raiding of legacy assets through legislation. Voluntary legislation will ensure that legacy assets are preserved for the purpose for which they were intended. It empowers mutual members to decide what should happen to the assets on a solvent dissolution. It would match the best legislation existing in many other countries around the world. The Bill introduces a voluntary power to enable a mutual to choose a constitutional change so that its legacy assets, the capital surplus, will be non-distributable, details precisely the destination of any capital surpluses on a solvent winding up, outlines the procedure necessary to include such provisions in a mutual’s rules and inserts a statutory provision for the relevant rules to be unalterable. It defines the capital surplus as the amount remaining after deducting a mutual’s total liabilities from its total assets, including repayment of members’ capital. It introduces new provisions to maintain the destination of the capital surplus and ensures that where mutual rules make the capital surplus non-distributable, any resolution to convert into, amalgamate with or transfer engagements to a company should also include a provision to transfer the capital surplus as provided by the rules in the event of a solvent winding up. That is quite a lot in a two-clause Bill.
In conclusion, I will address the issue of why corporate diversity matters. Diversity of ownership or types of business creates models of corresponding diversity in the forms of corporate governance, risk appetite and management incentive, structures, policies and practices, and corporate behaviours and outcomes. It also offers wider choice for consumers through enhanced competition that derives in part from the juxtaposition of different business models. For the wider market to benefit, each of the corporate models needs to enjoy the necessary critical mass defined as the degree of market share necessary to enable each model to operate successfully and thus provide real competitive pressure on the other players within the market.
Finally, I thank the Delegated Powers and Regulatory Reform Committee for its report, which specifically refers to this Bill. Responding to the points raised, I emphasise that this is a short, skeleton Bill. It is specific in nature and seeks to deal with a real, identifiable problem. The expertise to draw up the regulations lies in the Treasury. It is a Bill which is permissive. A mutual entity is not compelled to do anything on the Bill becoming law, and any mutual entity that does not wish to adopt or use the powers does not have to. Furthermore, the regulations must be brought back to this House and the other place for consideration and affirmative resolutions must be passed. There are proper procedures in place for proper consideration, and the regulations will be considered by the Secondary Legislation Scrutiny Committee before any such debate takes place in this House. I look forward to the contributions from other noble Lords in the debate and I beg to move.
My Lords, I support Second Reading of this Bill and declare my interests as set out in the register. I congratulate the noble Lord, Lord Kennedy of Southwark, on his sponsorship of the Bill in your Lordships’ House, and thank the honourable Member for Preston, Sir Mark Hendrick, for steering the legislation through the other place. I also congratulate my noble friend the Minister and the Government on supporting this legislation.
The co-operative movement can be traced back to the Victorian era, essentially in response to the Gradgrind version of capitalism, in contrast to the more enlightened Tory tradition of the Earl of Shaftesbury and others, who legislated to protect workers and who recognised the merit of co-operation. The social enterprise model is an important recognition of a form of business other than the simple shareholder model. Community-owned businesses are a vital part of our life, generating employment, social benefit and continuity.
Demutualisation can be a threat to the mutual sector, facilitating the break-up of a business, as we have seen in the past. The distribution of all the assets, including substantial legacy assets, contrary to the intention of those who set up that business, is not in the interests of us all. Mutuals may, of course, resist demutualisation attempts, as the recent Liverpool Victoria saga showed us in 2021, when the private US equity firm Bain Capital tried unsuccessfully to take it over. This legislation will assist in resisting demutualisation.
The legislation governing mutuals is somewhat archaic. I welcome the possibility that the Law Commission might look at the wider area of mutuals and how they may have access to capital. I hope that the Minister, in responding, can say whether there is a timescale for that and whether it is happening. The United Kingdom has a relatively small mutual sector, compared with other comparable economies such as France and certainly Italy, where it is significantly larger—particularly in Emilia-Romagna, where it is a large part of the enterprise sector.
This Bill will give co-operatives, mutuals and friendly societies flexibility in assessing what fits for themselves as the best model. It enables them to adopt this form of block if they want to do so. As the noble Lord, Lord Kennedy, has said, it is not obligatory. It will help those societies that choose to adopt the so-called asset lock. Voluntary asset locks have been adopted to good effect by some societies, often with so-called charitable assignment clauses, but this legislation will build on that and ensure that, where there is an intention on the part of the business, it can go forward with a lock that is significantly harder to unpick than some of these voluntary locks that have been adopted.
I give an unqualified welcome to what is clearly a sensible piece of legislation. I have just one additional question for the Minister. Looking at the Explanatory Notes, this is a reserved area for Wales and Scotland; that much is clear. It is not a reserved area for Northern Ireland, so what will happen in relation to Northern Ireland? We all hope, I am sure, that the devolved body, Stormont, will be up and running before long. It has been a good week in relation to Northern Ireland, with the success of the legislation going through. It has been a good week for sensible government. I hope that the Minister can say something about how the Northern Ireland part of the United Kingdom can benefit from this legislation in the short term while we do not have Stormont up and running.
However, I will not detain the House any longer, except to give an unqualified welcome to this legislation, and to thank the noble Lord for bringing it forward.
My Lords, I congratulate the noble Lord, Lord Kennedy, and Sir Mark Hendrick, on their work and their diligence in bringing to a likely success this piece of legislation. I declare a relevant interest as a member of a mutual, the Yorkshire County Cricket Club, and as someone who has provided, in the last year, some significant work and advice, including on regulatory issues, with the Financial Conduct Authority. I am currently assisting the club in looking at the raising of finances from the capital markets or elsewhere to deal with its ongoing financial crisis. According to the press statements by those at senior levels in the club, there is currently a major financial crisis, and indeed a suggestion that the club is in some peril. There is an annual general meeting tonight. Doubtless more details will be provided in relation to that.
This Bill is very timely. It raises interesting questions about how new powers could be used and how the Treasury could give guidance to allow an inventiveness in use. Take the situation with Yorkshire County Cricket Club, a mutual. The public face states “a mutual”. It is my understanding that it is a community benefit society. However, I have been unable to get absolute clarification on that. The fact that one cannot get an easy clarification on that demonstrates a weakness in the current system.
Concepts of asset lock are often seen in terms of financing. Yorkshire County Cricket Club has set up a private charity, the Yorkshire Cricket Foundation. However, assets come in different forms. The financial crisis of this mutual is primarily because it has had an investment with non-mutuals in building assets—in this case, a stand, for which lots of money is owed and for which lots of money had to be borrowed. That agreement is within the mutual and yet outside the mutual because that is not an asset that the mutual controls and therefore can asset lock. Within the stadium, there is a hotel that is rather significant in terms of income generation for test cricket. It is owned by a third party. The interrelationship with the neighbouring rugby club, in relation to car parking and other assets, is complex, but in essence it is a mixed picture.
One could argue that the community benefit requirements under law—not least the 2014 law—would have required Yorkshire County Cricket Club to take a greater interest in the 2012 report by Tom Fletcher of Leeds Met university on racism in Yorkshire cricket and racist attitudes in Yorkshire cricket. If that had been done at the time, on some of the things that Dr Fletcher was able to evidence, future problems that emerged might have been avoided. That would seem to be a definition of community benefit that was not fulfilled under the requirements of the law and by the regulation under the FCA at the time.
What the Bill can do on the ambiguity of what is a mutual will be incredibly helpful to mutual members—I am a mutual member, and it is ambiguous to me at the moment—and there are other sporting clubs where the same would be found, but the key thing, which is potentially revolutionary for sporting clubs, is thinking through where asset locks could go. Asset locks are generally seen in terms of finances and supporting profits and how they are held on to. However, asset locks can include the pitch, for example. Therefore, if the mutual members of Yorkshire County Cricket Club were to choose to identify the pitch as a community asset and lock that in, it would mean that, should the club be in such a perilous state that it goes into liquidation and has the threat of a takeover by third parties who, in order to survive, may not wish to retain mutual status in the future, it would give this opportunity to the mutual members and empower them. For example, in a very different way, not by mutual but by private ownership, the private pitch owners at Chelsea Football Club locked in the pitch at Stamford Bridge, and not even Mr Abramovich could assuage them with financial offers to give up that ownership.
Given the Government’s intention to regulate football and, doubtless, a desire to have good management, ethics and systems across all sport in this country, this opens up a huge opportunity. I have put this to grass-roots, low-level—non-league, to be accurate—football clubs in the past. Ownership structures could be changed so that the core assets including the name, the pitch and perhaps the youth structures could be owned on a mutual basis, but the more complex assets such as the stands, corporate facilities and spectator facilities could be owned by a separate owner and not necessarily be mutualised. That would allow people to invest in some of the profit-making potential of bars and related foods et cetera, while guaranteeing that such ownership could never take away the essence of that sporting club.
I proposed that some years ago to Worksop Town Football Club. The owner at the time did not accept the concept, but the obvious way of managing sport in this country remains for a football club of that level and size, or in whatever sport: locking in the assets to a particular location; locking in the key thing in the asset, which is the pitch; and debarring. They certainly had a case at Worksop Town where one owner debarred local youth and schools from using the facility. Giving members the ability to determine who will use the core sporting facility is a semi-veto power of management, but not one that would put off any coherent private investor—who might want some kind of venture that they have built, such as a private sports club as part of a new spectator stand that he or she and their entity have profited from but, in reality, cross-subsided the creation of a stand for spectators, which then cross-subsidised the sporting body itself and the mutual.
It seems to me that, at many levels of football and cricket and, I dare say, one or two other spectator sports with similar complexities of finance, this anchors in the community benefit. The beauty and criticality of the Bill by the noble Lord, Lord Kennedy, is that it allows this to happen under any form of mutual. It is a game-changer in how, at that level—which is the level of most sport in this country—assets could be seen, and in how the supporter base and community could ensure that they have a lock on those assets.
I urge support for the Bill and urge the Treasury to move rapidly in ensuring effective guidance. This could revolutionise the grass-roots asset base in our sport and may well be of future assistance to troubled entities such as the mutual that Yorkshire County Cricket Club is at the moment.
My Lords, I rise to support the Bill and congratulate all those who have been involved in its passage thus far. Mutuals have been part of my political life ever since I got involved in politics: I am member of the Co-op and bank with the Co-op, the NFU looks after my woodlands, and I remain actively involved in other aspects.
I had the privilege of being chairman of the Tunbridge Wells Equitable Friendly Society from 1998 to 2005, along with a man called David White. He and I created the brand of the Children’s Mutual, which was, in my judgment, the most successful unit to sell child trust funds. I am saddened that that very successful concept was replaced by the junior ISA, which did not have the same vision and excitement for young people. That is part of the history, really. I am currently one of the vice-chairmen of the All-Party Group for Mutuals.
I look particularly at Canada, where I have a brother, and at the huge success of the mutual movement there: it is growing, dominating the insurance market there, with a real mutuality of work on the ground. In a lesser sense, one sees the same in Holland and in Europe. I would like to see that happen in my country.
In today’s world, the mutual movement faces two challenges. One is how to utilise retained capital, which is addressed in the Bill, and the other is raising capital. The latter element took me into the legislative process in 2015, when I took a Bill through both Houses with the support of my noble friend on the other Bench—he is now not on the Front Bench, but nevertheless he has been hugely supportive, and I underwrite his involvement in the mutual movement.
I previously had a Bill called the Mutuals’ Redeemable and Deferred Shares Bill. That was to address the issue of raising capital. At that time, you had a situation where, of the five elements that make up the mutual world, building societies, credit unions and co-operatives had already been helped by the Chancellor at that time, but two had not: the mutual insurance companies and the friendly societies. My worry and theirs was that, if we did not do something, they would wither on the vine. Indeed, when one looks back, it was not so many years ago that the mutual insurers had about half the market; today, it is 10%, and I suspect that that is a little generous.
At any rate, that Bill was supported by Her Majesty’s Government, and I still pay tribute to the then Chancellor, Sajid Javid, who helped in taking the Bill through Parliament. We hit certain problems, particularly to do with the requirements of Solvency II and whether the capital raised would be eligible for tier 1 capital, which was absolutely vital for development capital. However, after much negotiating, we got to a situation where we had to remove one element, the redeemable element, because, basically, an election was coming.
When we got that on the statute book, we thought we had got a long way and that it was all going to happen smoothly. Lo and behold, it never happened, because it required a statutory instrument to implement the Act, and that was not made due to concerns at the time that issuing these shares would alter the tax liability of mutuals. So the Bill is still there as an Act. It is still sitting there and I hope something will happen about it, but I will come back to that in a second.
I now turn to the current bill. It is not a huge Bill; it is very much a focused Bill, and that is to its great credit. I praise Sir Mark Hendrick and others who have taken it thus far. The interesting part of what has been happening in the team that has been working on it is the letter—I cannot see the date on it—from Minister Andrew Griffith MP to Gareth Thomas MP, who is chairman of the All-Party Parliamentary Group for Mutuals. The last paragraph is absolutely key. It says:
“Going forward, the Government aims to develop a modern and supportive business environment to set mutuals up for future growth and success and is currently exploring the options for reviews of key legislation underpinning the sector. This will allow the appropriate time and space for engagement with mutuals and regulators to ensure there is consensus on the best way forward.”
That is a very exciting prospect.
I see my noble friend on the Front Bench. It has been a privilege to work with her on the Bill we are doing in the House at the moment on financial matters.
We also have a practical problem. I think every one of us has probably shopped at John Lewis. It is interesting that the chairman, Dame Sharon White, was deeply involved in the early stages of the child trust fund, so she must feel quite strongly that somehow she needs to find a means of recapitalising John Lewis. That is another challenge. Speaking personally, I think John Lewis is part of life in the United Kingdom, and I would like to see that organisation prosper. I think that should basically be at the back of His Majesty’s Government’s review of this whole area.
I read economics at Cambridge—I found a subject I was reasonably good at, having not been terribly academic at school. I was reminded, as it was quoted in the papers recently, that John Stuart Mill hoped that employee ownership would end the standing feud between capital and labour. That is the driving element that I feel as well. I will give this Bill all possible support and do anything I can to help it move forward, and anything I can to help His Majesty’s Government as they look at the broader aspect mentioned in the letter I quoted. I just remind my friend the noble Lord, Lord Kennedy, that when he supported my Bill he said it was the second time. This time it will be third time lucky, I hope. With that, I offer myself as a servant to do anything I can to put this Bill on the statute book.
My Lords, it is somewhat unusual to stand up from these Benches and agree with virtually every word that has come from the Benches opposite, but that is where I find myself today. I join Members on all sides of the House in congratulating my noble friend Lord Kennedy on sponsoring this Bill, and indeed my honourable friend Sir Mark Hendrick, with whom I served in the Commons, who introduced it. It is good to see that it has had an unqualified welcome from all sides of the House.
It is, as my noble friend pointed out and has been mentioned just recently, a very straightforward Bill. Although there are regulations to be made, I do not, on this occasion, have my usual concerns about a skeleton Bill leaving the detail to later—though of course many people will want to look at that detail quite carefully.
I think that many people in the co-operative movement, and many people who deal with mutuals, would have been surprised, until quite recently, that such legislation is necessary. There have been shocks to the system—mention was made of Liverpool Victoria—that have made people look again at the framework of regulation here. Although this Bill is welcome, it is not the last word on what needs to happen going forward.
The issuing of a statutory asset lock is clearly extremely important, and that need has been highlighted by recent cases. Those who established mutuals and co-operative institutions never thought that the assets that they were creating were not protected. I think that is where the shock element comes from.
The noble Lord, Lord Bourne, gave a bit of the history of co-operatives, and I appreciate that because, as my noble friend Lord Kennedy indicated earlier, many of us were brought up in that particular culture of co-operation. Like many people, I remember going as a child to the local Co-op in Wishaw, where my granny lived, for the morning rolls. I remember to this day, “four, five, seven, six” which was the number you had to give to make sure that, at the appropriate time, the dividend came forward. In Bolton, we had a remarkable system where, when you went to the Co-op shop, you were given a thin paper ribbon with the amount spent that you then had to put on a gummed piece of paper. If I lost it on the way home, my mother was not best pleased, because that again was reflected in the dividend that was often very useful for buying shoes or whatever it was that was the particular purchase of that kind.
It was not just the financial incentive to shop at the Co-op or to have insurance with the Co-op; it was the feeling that you were not being cheated. There was a confidence factor there. The early co-operative organisations were often based on giving people confidence that they were not being cheated but also on a feeling of belonging. It was part of the culture of many working class existences. I think that the co-operation with social enterprises, which was mentioned on the Benches opposite, is something that builds on that. Those who established co-operative and mutual benefit societies and institutions would be horrified at the thought that the assets that have been built up over time could go for other purposes.
I have just one question for the Minister, and it builds on what the noble Lord, Lord Bourne, said. In the Commons, the Minister said that the Government would soon bring forward legislation to amend the Building Societies Act 1986 and are consulting on reviewing the legislative framework governing co-operatives, community ventures and friendly societies. I know Ministers cannot anticipate what might be in the King’s Speech, but I wonder whether we could have a bit of an update on the progress that I hope is being made in this particular area.
Mention has been made of sport, and I think it is important. I know my noble friend Lord Kennedy is a great football fan, although we disagree on which club we should be supporting. He will have seen the real difficulties that many clubs have gone through in recent years. We have one or two football clubs that are going down this particular pattern of trying to work together and have a community asset. I hope there is more scope there.
This is an important Bill. It is a small Bill. It is, as my noble friend said, a permissive Bill. It is not ensuring that all societies go down this route, but I hope that the voluntary powers in it will be acted upon, because that is what the originators of all these institutions would have wished.
My Lords, as a proud member of the Co-operative Party, it is a genuine pleasure to contribute to this debate. I pay tribute, as so many have, to my noble friend Lord Kennedy of Southwark for introducing this incredibly important Bill and for continuing the work started in the other place by Sir Mark Hendrick.
I do not believe that anyone who has listened to my noble friend during this debate or at any other point could doubt his commitment to the co-operative movement. He is a stalwart co-operator and has dedicated many hours to campaigning for the co-operative movement, seeking to ensure a fairer and more equitable approach to our local economy.
As my noble friend outlined, co-operatives, mutuals and friendly societies are not relics of the past but a fundamental aspect of our national economy, and provide a lifeline to communities seeking to be directly involved in the provision of services in their immediate vicinity. As my noble friend Lady Taylor of Bolton reminded us, for many of us nothing is more evocative of childhood than conversations about our family’s divi number. My partner can still cite his grandmother’s: 207619, Thelma Snell. But co-operatives and mutuals are more than retail outlets, important as those are.
As my noble friend Lord Mann and the noble Lord, Lord Naseby, both referenced, the British co-operative movement is as diverse as our economy and includes everything from cricket clubs to football pitches—that was news to me—and from housing providers to funeral societies, credit unions, insurance companies, shared community spaces, retail offers and even the odd public house.
That is why this legislation is so important. In the UK, 14 million of us are members of a co-operative or mutual. They employ more than 250,000 people and generate a combined turnover of £39.7 billion a year. They also collectively hold more than £200 billion in assets, as the noble Lord, Lord Bourne of Aberystwyth, highlighted. While those numbers may seem impressive, they are small fry compared to those of our friends in the EU. The co-operative sector in Germany is four times the size of the UK’s and is a sector of its economy embraced at both a federal and a local level.
Around the world, 12% of the population are members of a co-op and the largest 300 co-operatives and mutuals report an annual turnover of $2.1 trillion. From that comes a view of how capital can be used not for short-term gain but for long-term investment in which members understand that the success of the business and surpluses generated above the original capital asset are used for the common good. This business model also creates a stable and dynamic enterprise; co-operatives are twice as likely to survive their first five years of trading than other start-ups and are known to be much more ambitious in their plans for growth.
It is therefore imperative that we do what we can not only to foster the creation of new co-operative and mutual societies but to protect the ones we have, which is why the Labour Party has already pledged to double the size of the British co-operative sector after the next general election.
This Government speak a great deal about economic growth and levelling up. The co-operative movement is a vehicle that can and should be involved in delivering both, and this piece of legislation is a small step in helping the sector to move forward. It provides the safety mechanism that allows for any capital surplus to be held over and for the associated funds and assets to remain committed to the wider public good should a mutual cease to trade. It empowers the members of mutual societies to decide what should happen to assets upon the dissolution of their society. It will allow members the right to preserve the assets for the future, to deliver the original guiding intentions upon which their society may have been founded.
Currently, no such provision exists in the UK. Nothing exists that allows members to specifically confirm that any capital surplus would be non-distributable and remove the very tantalising incentive for demutualisation. Those pioneers who set up and found co-operatives, mutuals and friendly societies never do so in the hope of turning a quick profit. They do so because of a desire to enhance the common good, which can be achieved only by co-operation. They seek not only to build a financial enterprise but to provide a community with a tangible solution to a shared need. Indeed, these co-operators have neither the right nor the expectation of securing personal financial benefit from the increased value of their society; this is where the problems arise.
This Bill, therefore, establishes the right from day one, if they wish, for new mutuals, co-ops and friendly societies to enshrine in their governing documents that any capital surplus in the event of dissolution will be held securely in the hope that future generations may, one day, pick up where they left off. It would stop eagle-eyed investors seeking to demutualise, distribute an unearned windfall profit and for ever end the common good that the founding members had intended from their original stake.
This Bill is a bulwark to those who see successful mutuals and co-operatives as an opportunity to asset-strip and make a quick buck on the backs of generations of working people who made a choice about the type of business they wished to support, so it definitely has the support of our Benches.
My Lords, all speakers in this debate have recognised the diversity and value that mutuals bring to our economy. At their core, mutuals give people a stake in how businesses and organisations should be run. Their unique, purpose-led, member-focused approach provides an alternative model of economic organisation and activity across all industries, from financial service providers to housing, agriculture, manufacturing and—as the noble Lord, Lord Mann, noted—sports clubs, down to community assets such as locally owned libraries and pubs.
As the noble Lord, Lord Kennedy, described to the House, he has a keen appreciation of the importance of mutuality as a committed member of the Co-operative Group and a non-executive director of the London Mutual Credit Union, one of the largest credit unions in London. I thank him for lending his wealth of experience and expertise as he leads the Bill through this House on behalf of the honourable Member for Preston, to whom plaudits must go for the Bill before us today.
I also take a moment to acknowledge the spirit of cross-party collaboration of which this Bill is a product, particularly that which was fostered between the honourable Member for Preston and my honourable friends the Economic Secretary to the Treasury and his predecessor, the honourable Member for North East Bedfordshire, which saw the Bill move unopposed through all its stages in the House of Commons. Throughout, their endeavours have been backed by significant levels of support and input from the sector itself, particularly the trade bodies Co-operatives UK and the Association of Financial Mutuals, and the think tank Mutuo.
The noble Lord, Lord Kennedy, clearly explained the positive change this Bill seeks to deliver for co-operatives, friendly societies and mutual insurers. This country is rightly recognised as the birthplace of the modern mutual movement. It is right that we protect this legacy by equipping co-operatives, friendly societies and mutual insurers with a stronger option in law to safeguard their funds for the future so that they can continue to contribute value to society and their members for years to come. The merits of the Bill are clear and roundly endorsed by the sector itself. I am pleased to be able to give the Government’s full backing to it. Within the limited legislative time available to us, I look forward to the Bill progressing swiftly.
My noble friend Lord Bourne asked how the provisions in this Bill can be taken forward in Northern Ireland given that co-operatives legislation is devolved and there is no Executive in place. Northern Ireland is governed best when governed locally. The Government believe that this is the moment for the restoration of the devolved institutions. It would be for a restored Executive to take forward any similar legislation, but I assure my noble friend that my officials have had regular dialogue on mutuals issues with their counterparts in Northern Ireland and would be happy to continue that engagement in future.
As noble Lords have noted, the Government’s commitment to this sector is not limited to this Bill. Through the Financial Services and Markets Bill, a number of important amendments are being made to the Credit Unions Act 1979 to support the future growth, diversification and development of credit unions. These reforms include empowering credit unions in Great Britain to offer a wider range of products and services, creating a more agile and competitive sector, which can better adapt to changing market trends to deliver for its members.
Furthermore, the Government are delivering for building societies—mutual savings providers and mortgage lenders—which are not included in the scope of this Bill. As the noble Baroness, Lady Taylor of Bolton, noted, and as announced in the Edinburgh reforms package, the Government will in due course bring forward legislation to amend the Building Societies Act 1986 following the conclusion of our consultation. The amendments will help to establish a legislative framework that is fit for the future and promote a level playing field for building societies to grow and compete.
The Bill is focused on safeguarding the positions that mutuals hold today, but we must also focus on the future. To respond to my noble friend Lord Bourne, my noble friend Lord Naseby—to whom I pay tribute for his long record of support for mutuals—and the noble Baroness, Lady Taylor of Bolton, I say that we are in active discussions with the Law Commission on options to proceed with reviews of both the Co-operative and Community Benefit Societies Act 2014 and the Friendly Societies Act 1992, with a view to launching those reviews in the next financial year. As my noble friend Lord Naseby noted, modernised, fit-for-purpose legal frameworks will enable friendly societies and co-operatives to seize opportunity and grow.
All in this House appreciate the potential of modern mutuality. Mutuals are invested in the success of their members and the local authorities where they operate. Because of that, they can be a real asset in our mission to level up and spread economic opportunity across every region of this country. In the meantime, I look forward to working with noble Lords to ensure the successful passage of the Bill, which is one important step along the road to reform for the mutual sector.
My Lords, I very much thank all noble Lords who have spoken. I agree with every comment that has been made, which is very unusual in this House, so that is wonderful.
I thank the noble Lord, Lord Bourne of Aberystwyth, for the reference that he made to the campaign against the demutualisation of Liverpool Victoria. That is a recent example of the threat that mutuals face when people see their large assets. It was a great campaign that will be an eye-opener and a wake-up call for everyone, showing that something needs to be done to protect those assets. I thank him for his support, and I generally agree with all the comments that he made.
My noble friend Lord Mann spoke about sports facilities, the benefits they bring to the community and how the assets of those facilities could benefit from a change in their ownership structures. That was a really important point. He highlighted that, with legislation, lots of playing fields and sports centres and grounds could be protected for future generations. Small ones in particular are often under threat.
As my friend the noble Lord, Lord Naseby, said, we have worked together many times on these sorts of issues, and I thank him again for his support, which is really good to hear. His many years of support for the mutual sector are welcome and needed, and we thank him very much for them.
My noble friend Lady Taylor of Bolton also made reference to the Liverpool Victoria situation and highlighted the need for further protection. I agree with what she said about the special place that the Co-op has, in our memories and even today; I am a regular shopper down the Co-op, and it is a wonderful organisation, as are all the mutual organisations in our country, so it is always worth supporting that.
It was great to see the support from the Opposition for the Bill. My noble friend Lady Anderson of Stoke-on-Trent and I have been friends for many years, from long before either of us was in either House of Parliament. She used to serve in the other place. I was so pleased when she joined this House at the end of last year, and I am even more pleased and proud that she is speaking from the Opposition Front Bench. It is great to see her here.
I thank the Minister for her support for the Bill today, and I thank the officials from the Treasury for all the work that they have done. It is good to hear that there is further work going on behind the scenes in the department to look at other legislation. I was pleased that she mentioned the London Mutual Credit Union. I am proud to be a director there. It is a wonderful institution, the biggest credit union in London, and we are actually in the mortgage market now. It is a fantastic organisation. If she ever wants to visit, I would be delighted to show her around and show her all the work that we do there.
Bill read a second time and committed to a Committee of the Whole House.
Neonatal Care (Leave and Pay) Bill
My Lords, it is a pleasure to sponsor the Bill in your Lordships’ House. I thank Stuart McDonald MP for steering the Bill so effectively through the other place. It has already achieved a minor miracle in uniting the Scottish National Party and the Conservative Party, as well as gaining cross-party support in the other place. I pay tribute to all those who have spoken so passionately and sensitively about their personal experiences of children born prematurely, including Luke Hall MP and David Linden MP. I give thanks to the APPG on Premature and Sick Babies.
I am enormously grateful to Bliss and other charities that provide vital support to parents of premature and sick babies in their time of need, and which have provided me with advice on the Bill. I want in particular to mention Tom and Anna, who are now both employees of Bliss, who came to see me and told me their personal stories and how they had been inspired to work to help other parents. It is not always easy to talk about these painful experiences, but I want to be clear that all who have campaigned for the Bill can take pride in seeing it come to fruition.
I am grateful to everyone who has put their name down to speak today, and to see such wide-ranging expertise from across the House. I know that this is a far-reaching, highly important and deeply personal issue for many here today, and I am sure we will have a very thoughtful debate.
The Office for National Statistics reports that an estimated 100,000 babies every year are admitted to neonatal care in the UK following their birth. Neonatal care is the type of medical or palliative care that a baby who was born prematurely or sick receives. Many of these babies spend prolonged periods of time on a neonatal care unit in a hospital as a result of being born prematurely or with other health conditions.
We know how incredibly worrying and stressful a time that is for parents. They of course want to get on and focus their attention on getting through this period, supporting their family, each other and their baby or babies. Unfortunately, though, some may end up with concerns about their ability to do so and to keep their jobs. Fathers, if eligible, get only two weeks of statutory paternity leave, and when that runs out they might be called back to work while their baby is still in hospital. For babies who have an extended stay to stay in hospital at the start of their lives, mothers report that the 39 weeks of paid maternity leave does not give them enough time. A large portion of that can be used up while their baby is in neonatal care, leaving them feeling that they do not have enough time at home with their baby before having to go back to work. It is important always to have at the front of our minds that children in neonatal care often have significant health or developmental issues that require specialist medical attention, which means that this does not end up being a usual form of maternity leave. I have heard at first hand that some parents even choose to leave work as a result.
The successful passage of the Bill will realise an important commitment from the Government to create a new statutory leave and pay entitlement for the parents of babies receiving neonatal care. That means that employed parents who find themselves in this desperate situation in future will know that, as a minimum, they are entitled to time off work to care for their babies and that they will not suffer detriment from their employer as a result.
Protected time off from work for parents who find themselves in this position is crucial. We know that there are some brilliant supportive and flexible employers out there, and I commend them and encourage others to follow their lead. Business representative organisations, including the CBI, have expressed their support for the plan to introduce neonatal care leave and pay. Employee retention has been identified as a key benefit of family-related leave policies, including neonatal care leave and pay and engagement with employer representatives. This is the right thing to do for families and for the labour market.
I will outline the key components of the Bill. It consists of three clauses and a Schedule. The main provisions of the Bill are found in the Schedule, which creates a statutory entitlement to neonatal care leave, creates a statutory entitlement to neonatal care pay and makes consequential amendments to other legislation, including adding references to neonatal care leave and pay where relevant. Neonatal care leave and pay will be available to each employed parent of babies who are admitted into neonatal care up to the age of 28 days and who have a continuous stay in hospital, or in other specified care settings, of seven full days or more. Neonatal care leave will be a day-one right, meaning that it will be available to an employee from their first day in a new job.
Statutory neonatal care pay, like other family-related pay rights, will be available to those employees who meet continuity of service and minimum earnings tests. I expect it to be paid at the statutory rate, currently £156.66, or 90% of the employee’s average wages—whichever is lower. This amount is usually uprated in line with increases to statutory payments.
As the Government have already set out in their response to the consultation on neonatal leave, the intention is that the total amount of statutory neonatal care leave available to parents will be capped at a maximum of 12 weeks; that will be one week for every week their child spends in neonatal care. This will be set out in the regulations under the Bill.
This leave will be protected. Those exercising the right to leave will have legal protection against being subjected to any detriment for doing so, consistent with other family-related leave entitlements such as paternity, maternity and adoption leave. It is worth your Lordships noting that this Bill is constructed to be in harmony with these other related entitlements.
Neonatal care leave will be flexible, allowing employees to take leave either when their child is receiving neonatal care or after that period. This means that fathers who have only two weeks of paternity leave may want to take their neonatal care leave while their child is still in neonatal care. However, mothers will be able to add it to the end of their maternity leave and other forms of parental leave that they may be entitled to. This is because, once maternity leave commences, a mother cannot stop it in order to take neonatal care leave, or else she will lose her remaining maternity leave.
With that in mind, the Bill provides for the window of time within which neonatal care leave can be taken to be set out in regulations. This window will be a minimum of 68 weeks following the child’s birth, as this ensures that mothers and fathers have sufficient time to take their neonatal care leave alongside other leave rights that they may be entitled to, rather than having to lose out on any such entitlements.
Eligibility for neonatal care leave and pay will be detailed in regulations but must be based on a parental or other personal relationship with the child in neonatal care. This is to ensure that the definition can be kept up to date to accommodate changing family dynamics.
Your Lordships will no doubt have noticed that there are a number of delegated powers in this Bill. We spend a lot of time, quite rightly, in this House talking about being clear about the need for delegated powers and how they will be used. The powers in this Bill mirror, in so far as is possible, the approach in existing family-related leave and pay entitlement legislation. Such powers have been on the statute book for some time and are well understood by employers and the legal community. A similar approach was taken most recently in the Parental Bereavement (Leave and Pay) Act 2018, which was also a Private Member’s Bill. The Delegated Powers and Regulatory Reform Committee’s report of 2 February had no concerns with the delegated powers process in the Bill. It said:
“There is nothing in this private member’s Bill which we would wish to draw to the attention of the House.”
I hope that gives noble Lords adequate reassurance on this matter.
We have an opportunity here to make a real difference to the lives of those who seek to rely on this entitlement in the future. I hope that, with the support of your Lordships, we can deliver legislation that parents who have been through a stressful time while having a baby in neonatal care, and the charities which work tirelessly to support them, can celebrate. I beg to move.
My Lords, I strongly support this Bill and thank the noble Baroness, Lady Wyld, for introducing it to the House so brilliantly and comprehensively. It is a compassionate Bill that will help thousands of parents at a very anxious time of their lives: when their newborn baby is fighting for his or her life in a neonatal intensive care unit, is born prematurely with genetic or congenital problems, or is recovering from surgery or fighting to overcome infections. Tiny babies spend weeks or months, sometimes more than a year, connected to ventilators, feeding tubes or, in some cases, extracorporeal membrane oxygenation machines.
As an obstetrician, I have assisted at the birth of many such babies, well aware of their fragility, particularly of premature babies at birth, some of whom are no bigger than the palm of your hand. I recall stories of many babies who spent months in neonatal units, and I will give examples of some so that noble Lords can better understand the anxiety and stress that parents have to go through while their precious, often tiny child courageously fights for his or her life. This is a compassionate Bill not only for parents, but for these tiny babies.
One such story is that of Sarah Beattie, born 14 weeks prematurely weighing 1 pound 4 ounces—595 grams. She spent months in a neonatal intensive care unit fighting for her life. It is not difficult to imagine the stress, anxiety and pain her parents went through as Sarah was cared for in an incubator for several months in the neonatal unit. Thirty years later, it was my pleasure, as chancellor of Dundee University, to award her a degree in law.
Another story is of the parents of Peggy and Bodhi, born at 23 weeks and four days—at the margins of viability —during the pandemic, weighing 550 and 600 grams. Their parents, Alison and Jim, were told of the small chance of the twins’ survival and, if they did survive, of the risk of severe disability due to their prematurity. Alison and Jim followed a daily routine of visits to hospital, helping with the care of Peggy and Bodhi, going through anxious times and worry as the twins fought through breathing difficulties, cerebral bleeds and much more. Alison was off work for 17 months. Peggy and Bodhi are now two and a half years old, and Alison says they are perfect. She said that, as parents reflecting on their own neonatal experiences, it was tough, but nothing compared to what her babies went through.
Some parents are not so lucky, with partners having to go to work, financial worries, unsympathetic employers, the separation of parents at visiting times and much more hardship. Parents whose babies are in neonatal care for a long period are understandably worried and anxious. They often feel depressed, suffer from sleep deprivation and much more. They want to be with their baby as often and for as long as they can. They wake up at night wanting to see and be with their baby. Technological developments such as vCreate, developed at the Queen Elizabeth Hospital in Glasgow, are now widely available in UK neonatal units. It provides a secure personal video link, enabling parents to see their baby all the time, with regular updates on their baby’s condition—a great advance and much appreciated by parents.
So, what are the good things in the Bill? It gives much-needed additional paid time off work for parents when their baby is in neonatal care. It will particularly benefit fathers and those taking paternity leave, enabling them to be present at the neonatal unit for longer when their baby is unwell. They will also be able to support their partner through the experience, emotionally and practically, including with the childcare of older children. For many mothers, when their partner returns to work they are left alone without support to receive difficult news and make life-changing decisions. The Bill will make it possible for both parents to be involved in their baby’s care. This is essential for neonatal units hoping to deliver care in a family-integrated setting. As research has shown, this improves outcomes both for babies and their parents.
I welcome that this will be paid, despite it being only at the statutory rate, as having a baby in hospital can be expensive, and most families cannot afford for one parent to take unpaid time off work. Research by Bliss found that, on average, families report spending £405 per week over their usual budget while their baby is in neonatal care. To support families through this troubling financial time, I hope many employers will offer neonatal care leave at a higher rate of pay than the statutory minimum.
I hope the Government will be sympathetic to dealing with what is missing from the Bill. In general, parents will be entitled to neonatal care leave and pay if they are employees and already qualify for maternity, paternity and adoption leave and pay, as the noble Baroness, Lady Wyld, mentioned. However, this means that a group of parents—those who are self-employed, who are classed as workers or who do not meet the criteria for other reasons—will not have access to this vital support. Although employment support for this group of parents is not within the scope of the Bill, I hope the Government, and particularly the Department for Work and Pensions, will look seriously at reviewing how they can provide similar support to all working parents. I hope the Minister is personally sympathetic to that view.
The other issue is the lead time for implementation, which is extraordinarily long: parents will have to wait until 2025 before the Bill will be implemented. Surely it has to be possible to do this earlier than 2025, and help thousands of parents and their babies who will be born before 2025. I hope the Bill is the start of much-needed help for parents whose children have to be cared for in neonatal care units, particularly for long periods. I give it my strongest support.
It is a great privilege and pleasure to follow the noble Lord, Lord Patel, who has great experience and expertise in the area of neonatal care.
We have heard from Scotland, so I thought we should hear from Northern Ireland on the Bill. I am pleased to be in the House today to support its Second Reading. I recognise that, from a territorial point of view, the Bill does not apply to Northern Ireland, as such matters are devolved. However, as with other Bills that have passed, I absolutely hope that it will be replicated by the Northern Ireland Executive and Assembly, once they are functioning again. The same is true of the previous debate, in which we heard about co-operatives, mutuals and friendly societies, which I was at one stage a Minister for in the Northern Ireland Executive. I listened with great interest and hope that the officials are already working with officials in Northern Ireland to make them aware of that Bill, which I hope will be replicated in due course.
Over 1,800 babies are born prematurely or sick each year in Northern Ireland and cared for in one of our seven neonatal units. Sometimes, of course, the neonatal care is planned for, because it is known that there is a difficulty in utero and it is diagnosed before the pregnancy comes to an end. In my case, when my youngest child was born, it was not planned at all.
I was about to be discharged home with my bundle of joy, all 9 pounds and 14 ounces of him, when the doctors came in to do their checks. First, the junior doctor came in, and he left without saying anything. A more senior doctor came in, and he left without saying anything, and then the consultant came in, and I knew that something was wrong. It transpired that my son had been born with a pulmonary stenosis, a congenital heart problem, and he was taken immediately to neonatal care. After just three weeks, he had surgery to deal with the issue at the Royal Victoria Hospital in Belfast, where they opened his valve. I remember, as a mother, watching him fall asleep on a huge operating-theatre table—he was just this tiny little baby boy. I want to mention his consultant, Dr Frank Casey, a wonderful paediatric cardiac consultant at the Royal Victoria Hospital. I can report to the House that my son is now a strapping 16 year-old rugby player, and absolutely doing very well.
I tell this story because having to rely on neonatal care can happen to any couple, and the Bill will allow the mother and the partner to be there to support each other and the little bundle of joy being cared for, without the additional worry about where the next pay cheque is coming from. Although my son was in neonatal care for a relatively short period, it can go on for months and years, as the noble Lord, Lord Patel, indicated. That needs recognition, which is why I strongly support the Bill today.
I pay tribute to the proposer of the Bill in the other place and the noble Baroness, Lady Wyld, for setting out the details and importance of it. I also acknowledge the wider work going on in early years, especially that of the Royal Foundation Centre for Early Childhood, led by Her Royal Highness the Princess of Wales, highlighting the need for intervention in early years. I also acknowledge the recent early years review, chaired by Dame Andrea Leadsom, who was asked to bring that forward on behalf of the Prime Minister. That work is fundamental and has been widely welcomed by the sector. I emphasise recognising the importance of early intervention in those critical first 1,001 days, which begin at conception—it is important to remember that—because intervening early is important not only to the child and the family but to our society as a whole. It is wonderful that Her Royal Highness the Princess of Wales is taking such an active role in her campaign to highlight this. It will really bear fruit in the future, when those little babies are adults.
I see the Bill as part of cherishing our young people from day 1, by allowing both parents to be present if there is a need for neonatal care and by taking away the worry about entitlement to leave by granting it as a day 1 right for parents whose children have spent at least one week in neonatal care. I thank the charities that have worked with the proposers of the Bill: I mention Bliss and, from a Northern Ireland perspective, TinyLife, which I have supported in the past—I know it does wonderful work with premature babies and babies who need to go into neonatal care. I strongly support the Bill.
My Lords, I am delighted to be taking part in the Second Reading of the Neonatal Care (Leave and Pay) Bill. We like long titles in this House, but we are actually speaking about precious lives who are so tiny. I stand today to support my noble friend Lady Wyld and the Members in the other place, but, more importantly, the Bill will support the many families up and down the country who are going through such horrific rollercoaster rides of emotions right now.
Life is so precious. I know that only too well—I had to make so many decisions before turning off my husband’s life-support machine, 48 hours after his brutal attack. I still have flashbacks of that beeping sound and guilt—did I do the right thing? I hear the switch clicking off, as his body fell silent.
The emotions of bringing a new life into this world when the pregnancy does not go to plan or if a baby is born at full term with complications mean that, more than ever, these families need the Bill to be enacted. The parents face so many unknown challenges that are certainly not in our parenting books. There are so many questions and decisions to be made, and having to do that on your own because of the 14-day paternity leave is so cruel. On many occasions in this Chamber, I have spoken about victims and survivors, because it is their stories that must be heard. Today, I speak up for families whose little ones are fighting to survive.
Let me introduce the House to Sam Bagnall, who I call “our little Sam”, and his doting parents, Zalena and Martin Bagnall, who are watching the debate on this stage of the Bill. Sam decided to come into their lives at a very early stage of her pregnancy: 24 weeks plus two weeks’ gestation. Mum had been on bed rest for a week, praying that she could get to the 24-week stage of viability. And he did, but that was where their lives—three lives—were placed on a hugely emotional journey of many tests, operations and making life decisions, with Sam’s tiny body fighting to survive. Can you imagine being constantly told, “We will do all our best, but you may have to say goodbye to Sam”?
Sam was born during Covid, which was hard on all families whose babies were due. However, Martin was able to be at the hospital because of furlough, which thankfully did not put a duty and helped alleviate the financial burden to some degree. It enabled him, as a father, to be by the side of his son and wife 18 hours a day. If he had been on the 14-day paternity leave, he would have had to live with the knowledge that, on day 15, Sam suffered a ruptured bowel. Three times, they were informed to say goodbye to Sam.
In our neonatal units, other mothers in the same situation become a community, so I will now speak about George. His mum had maternity leave and his dad had the 14-day paternity leave, but his work made him come back and he eventually had to go on sick leave. Another dad, who worked for a very well-known car manufacturing company, had sympathy from his bosses but was told to get back to work. His baby died without him being there; his wife and partner was alone.
Dads in particular need that extra time, especially when the baby is first born, because, sadly, that is when most of the complications are realised. The baby’s organs are so small and tiny, and there is so much pressure going around their body that their body collapses in some way. I too praise and thank Bliss for its excellent briefing, which was heartfelt to read and highlights the excellent work that is carried out across this country by many doctors and nurses. I call them “specialist angels”; what they do on a daily basis is just outstanding. Knowing that one in seven babies born in the UK is admitted to neonatal care really makes the Bill so important to ensure that we give the best to a newborn baby and their family.
I am not medical, even though I have enough ailments, but research shows that having both parents present releases oxytocin—I look to the noble Lord, Lord Patel, to see whether I said that right—in the baby, as the baby recognises mum’s and dad’s voices. Mother nature is marvellous, as it also reduces pain in our babies’ bodies. Science shows that it is not just about mum and dad being there, it is also about being by each other’s side. It is so beneficial for that young life.
The Bill, which I support in all parts, will allow parents to take, I think, an additional 476 days off work at a time when it is most important. It takes away that guillotine of choosing work or spending such precious time with their little baby and supporting their partner.
Super Sam spent four and half months in hospital, and I commend Liverpool Women’s Hospital and Alder Hey for the superb support and time that they gave to Sam’s body and parents. Super Sam is now three years old. He has some disabilities, as his parents were informed may happen, to his sight, hearing, speech and mobility. But let me tell the House why we call him Super Sam. He is now learning to walk and to speak; he went to speech therapy this morning. He has some sight issues, but thanks to an invention, special glasses enable him to get around. Nothing puts Sam off, and he is now practising with a football. And he now has a little sister, Ava, who is absolutely beautiful and has turned one—and she bosses him around.
Giving this neonatal leave and pay will no doubt alleviate more anxiety and pain when someone no longer has to leave their partner’s side but can stand by their side and support them with the hands-on care that is so vital to that precious life—their baby.
My Lords, I congratulate the noble Baroness, Lady Wyld, and all those who have promoted the Bill. Reading the briefing we had from Bliss made me want to say a few words on this particular measure. When the noble Baroness, Lady Wyld, mentioned the two people, Tom and Anna, who were helping with Bliss, it made me think that we should note and appreciate that so many parents who have been through this trauma want to help others; it is a very important matter.
Many of us might think, “Well, why haven’t the Government done this already?”, because, when you read the kind of information we have in our briefings, you see that clearly there has been a vacuum of support and a very clear case that something needed to be done. It is good that we have been able to have people using the Private Members’ Bill procedure. In a way, this is what Private Members’ Bills are for—to bring attention to a real loophole that has existed—and I hope that the Bill can progress so that people who need this help will in fact get it. The case has been made and is clear, and we need to take this further as quickly as possible.
Those of us who have not had the experience of having a baby in neonatal care cannot fully comprehend this; we can listen to the experiences that have been brought to our attention by the two previous speakers, but I suspect that it is something that you actually have to experience to know the full impact. Whatever problems we have had individually, the idea of a child in an incubator with tubes is something that all of us would immediately be affected by. Childbirth is supposed to be—as well as potentially painful—very exhilarating and exciting; it is an important day and something that we remember all our lives. But we do have the assumption that things will go well, and, while we might have niggles at the back of our head that something could go wrong, if something does go wrong it must be absolutely devastating—the family’s plans go out of the window immediately.
If the figures in the briefings we have had are correct, we are talking about an awful lot of people who are finding life extremely difficult at a very critical time. Of course, as the noble Lord, Lord Patel, pointed out, and as the noble Baroness, Lady Newlove, just mentioned, with modern medicine, many of these babies need a great deal of care for quite a long time, and current provision for parental support is really not adequate for what we are talking about today. In this House, sometimes we have to ask ourselves: if this were us, what would we want and need? What would we want a member of our family to have, if they were placed in the same position?
The briefing we got from Bliss was extremely interesting, particularly the point that 36% of fathers of babies in neonatal care were actually signed off sick to try to provide the kind of support that was needed. That means that it is a very important issue, because the first few days, months and years of a child’s life are some of the most formative and significant in terms of forming the relationships and bonds that are so important for families going forward. The added anxiety of financial pressure is something that really needs to be taken into account.
I wanted to ask the Minister about something which the noble Lord, Lord Patel, pointed out: that some people will not fulfil the criteria that are mentioned in the Bill for getting this financial support. I know that regulations have to dovetail into each other, and that is not always the case, but there are some quite specific limitations in terms of who can be affected, and that will need to be considered further down the line.
I cannot resist the temptation to mention delegated powers. It was good to see that in the Commons the Henry VIII clause was removed, so we do not have to bring it up and complain to Ministers at this stage, which is somewhat unusual. There is also the question of timing because, again, in the Commons, the Minister estimated that perhaps in about 18 months’ time we might get round to have this provision. I think we could probably get some movement before that, if people really took this as seriously as they should.
I congratulate all those people who have been involved in this legislation. I would just say to the Minister that I hope that we can have joined-up provision. Mention has been made of maternity rights, but there may be other children in the family to think about and there are fathers as well as mothers. This is an opportunity to bring all the provisions together and make sure that we consider the impact on the family as a whole—parents and the baby in neonatal care as well as the other children in the family—because a lot of people need support in this kind of situation. But I congratulate all those involved and very strongly support the Bill.
My Lords, I rise to give my support to this Private Member’s Bill. I add my sincere thanks to the noble Baroness, Lady Wyld, for all the work that has gone into preparing for this moment and for her very detailed, informative and passionate speech. I thank everyone who is taking part in what is actually quite an emotional discussion for many of us in the Chamber.
As my noble friend Lady Taylor said, I would like to thank Bliss for its dedication and for the information that it has provided us all with to inform this debate. It is true to say, as we can see when we look in Hansard, that there was a very good debate in the other place, and there are some real champions of the cause before us today. I would also like to extend my thanks to the families who have taken the time to give information and background on their own particular circumstances.
It is appropriate here today to extend our enormous thanks to the incredible staff in the NHS, as the noble Lord, Lord Patel, highlighted in his moving speech. I had, fortunately, a very minor episode, whereby my latest grandchild, at the age of five weeks, had to go into hospital to be put on oxygen as a result of infection. To see at first hand the dedication of those staff, and all the other commitments that they have while caring for children, is remarkable, and we need to continue to remind ourselves of just how significant their contribution is.
To pick out some of the highlights, the issue around regulations is key, but we are hoping that the Bill will introduce two new rights: neonatal care leave and statutory neonatal care pay. Of course, both rights will require the Secretary of State to pass the necessary regulations, and we look forward to seeing, as we move forward, the details of how they might operate.
The other important element to highlight is the right to neonatal leave being a day one right available to employees. We have heard a great deal today about who would be covered and the time period. The issue of extending eligibility is one that we will need to revisit.
I am pleased that the noble Baroness, Lady Foster, is here today, because Northern Ireland obviously has a slightly different situation, in that employment law is a devolved matter.
When debating these matters, we get a significant list of statistics. One in seven babies born in the UK receive some level of neonatal care just before birth and an estimated 50,000 babies in the UK spend more than one week in neonatal care after birth. But what we have heard today and need to emphasise is that each one of those cases involves a child and an extended family, and each one of those situations will have very different circumstances. What we know from the feedback from families is that the current inflexibility of the parental leave laws actually contributes to the trauma that they experience and adds to the family’s stress.
The figures speak for themselves, in that more than half of families say that their finances were affected. One in four families have had to borrow money or increase their debt because of the baby’s neonatal stay, and 80% of parents have reported that their mental health became worse after the experience. We have heard a lot about the fact that this is not just a situation that relates to mothers; it is about fathers and non-birthing parents as well.
I emphasise the points that have been made about the importance of early bonding with babies. Those first few days and weeks are so important for children’s development, going into their early years, and we must do everything we can to enable those significant relationships to thrive and develop.
I also pick up on the point made by the noble Baroness, Lady Wyld, that this is also about employers, and how actually this will bring benefit to employers. I think that, if you go out and talk to employers, you find that the vast majority would like to be able to be more supportive, but there is no framework to enable them to do so. We know that the Government have consulted with business and have had a broad range of respondents, and overwhelming support, and we need to take account of that in our discussions today. We have conversations on a repeated basis, as the Minister will be well aware, on many of the issues that prevent people from going back into the workplace. All those discussions are relevant to the subject before us today.
I emphasise the issue raised by my noble friend Lady Taylor. I do not know whether I am particularly susceptible to this—one of my older sisters had a significant stretch in hospital when I was about three from a very severe case of measles. I can remember vividly the fact that my parents were not around and that my grandparents suddenly appeared from nowhere; other carers came into my life. We were very fortunate in that respect. But what has not been highlighted, which I learned from my experience working to keep the children’s heart unit open in Leeds General Infirmary, and the other fact that we have to consider, is that many of the specialist units that these children will go into are not on the family’s doorstep. They often involve significant periods of time away from home for one or both parents, and this obviously has a knock-on effect for the entire family. We have to make sure that those elements are factored in.
We know that the Government have been active over the past three or four years. They launched a series of consultations under the Good Work Plan in July 2019, responded to that consultation in March 2020 and made a number of commitments, as we have heard. That commitment was also included in the text of the 2020 Budget, published the same month, which stated:
“The government will create an entitlement to Neonatal Leave and Pay for employees whose babies spend an extended period of time in neonatal care, providing up to 12 weeks paid leave so that parents do not have to choose between returning to work and taking care of their vulnerable newborn.”
The December 2019 Queen’s Speech included mention of an employment Bill that would introduce both the neonatal leave and pay rights, alongside a range of other commitments. The employment Bill was ultimately not introduced in the 2019-21 Session and did not appear in the Queen’s Speech of 2021 or 2022.
There has been a commitment from the Government, repeated on several occasions, including in the Good Work Plan, but sadly no action flowing from that. We must acknowledge our disappointment with the delay and the subsequent need to bring these matters forward in a Private Member’s Bill. I repeat that I pay sincere tribute to all those who have initiated and supported this Bill.
We are where we are, as we say, and I am very pleased to restate that those on our Benches are supportive of this Bill and hope that we can get assurance from the Minister about the speed with which he can act on behalf of the Government—indeed, to help the Government —to move forward and bring some relief to all those families who clearly deserve our support and help.
My Lords, I begin by thanking my noble friend Lady Wyld for bringing this important Bill forward for debate today. It is a great personal honour to be here to confirm the Government’s ongoing support for the Bill. The cross-party support for this initiative is significant; almost all parties represented in Parliament have supported this legislation specifically. I also thank Stuart McDonald for initiating the process that led to us being able to be here at this moment debating such an important topic. I am sure that we can agree that enabling parents to be with their babies when they are at their most vulnerable is clearly the right thing to do. I will address some of the comments made by noble Lords today in a moment.
Importantly, the Conservative Party manifesto in 2019 committed to introducing neonatal care leave and pay, stating that:
“We will legislate to allow parents to take extended leave for neonatal care, to support those new mothers and fathers who need it during the most vulnerable and stressful days of their lives.”
I am aware of discussions around larger pieces of legislation but, in my view, having had the privilege of taking through other similar Private Members’ Bills over the last few weeks, it is important that we do these right things and do not lose sight of the importance of these specific Bills in making people’s lives better and giving people protections. That is my priority today and I am grateful for noble Lords’ support, and the support of the body politic in general, for this Bill.
If it is helpful, I will go through some of the comments made by Members of this House in this debate. The noble Lord, Lord Patel, made a number of very relevant points, particularly outlining his expertise. I join him, the noble Baronesses, Lady Taylor and Lady Blake, and other Members who did not necessarily articulate it, in expressing my admiration for our doctors and nurses who care for our young babies when they come into this world, exemplified by the noble Lord, Lord Patel, and his expertise and contribution to this area over his lifetime.
The noble Lord and others mentioned the time for implementation. If I may say, I too share a slight degree of frustration at the expectation of an 18-month wait between Royal Assent and implementation. I have investigated this myself, as noble Lords would expect, and I am afraid that there are legitimate reasons relating to the systems and processes—two words that really should not go hand in hand with such an important and emotive topic. They relate to the practicalities of implementing these measures and ensuring that HMRC has the right systems in place. A number of pieces of secondary legislation must also be enacted, which simply takes time. All I can commit to from this Dispatch Box is my personal commitment—I am sure that I also speak on behalf of my Secretary of State and other Ministers—to ensuring that this will be enacted as speedily as possible. We will not let the processes of government delay us except to the absolute minimum. We are targeting April 2025 and we will certainly make sure that, if we can enact any parts of this legislation sooner than that, we will do so.
It was quite right that the eligibility of other types of worker in our workforce was raised by the noble Lord, Lord Patel, and the noble Baronesses, Lady Blake and Lady Taylor. It is felt that we want this to focus on employed workers. It is right to make sure that this mirrors our current maternity and other leave entitlements so that it can be effectively integrated into HMRC systems, pay systems and how businesses function.
I am perfectly aware of, and will take back to the department, the need to continually find ways to ensure that parents in this situation are able, with security, to spend time with their children. There are two very important reasons. First, it is a direct benefit to the health of the child. I would like to raise further in this debate the profile of the charity Bliss and to follow on from the comments about the parents who contributed to this work. This is a deeply personal, emotional and powerful subject. To share those experiences and to broadcast and propagate the importance of this mission is very meaningful. I congratulate them for this and hope to have the opportunity at a later date to do so in person. I hope that they are watching this debate and feel a sense of satisfaction that we continue to progress towards a suitable conclusion. My first point, then, is that it is absolutely right for the health of the child that parents are able to care for them in this difficult and essential period. It is also absolutely right, by the way, for the health of the parents.
My second point is that we must realise that there is a cost to businesses for these important social goods. We should not just ignore that fact. We as a society come together to decide how we want to structure ourselves, and how businesses respond to our needs and to important matters such as this is to be recognised—and I do recognise that. On the effectiveness of business, raised by the noble Baroness, Lady Blake, and the need to make sure that people remain in the workforce, having a structure and framework for how neonatal care leave is taken is far more helpful than the current system, which relies, in effect, on the charity of businesses. Many are extremely forward-footed, very generous and very compassionate but, clearly, they do not have a framework in which to operate effectively.
It is therefore extremely useful to have clear rules, such as we are bringing to bear in other areas such as carers’ leave and so on, so that employees and businesses know how to interact with each other, what their rights are and what the expectations are. As a result of that, I think that we will have far more effective functioning of businesses. We can see from the studies and some of the statistics raised today by my noble friend Lady Newlove and the noble Baroness, Lady Taylor, the number of fathers who are simply taking sick leave or just not going to work. It is not as if , therefore, by not having these frameworks in place, we will somehow have more people in work and that the business situation will be solved. What is happening now is the worst of all worlds: a great degree of insecurity, a huge degree of uncertainty for business and poor outcomes for parents and children. The Bill will solve a number of very important issues. It is absolutely right in every respect and will be an important element of the framework for how we want to make our economy function.
I believe I have covered most of the points raised. I am glad that the noble Baroness, Lady Taylor, mentioned that the delegated powers have been taken out of the Bill, so I do not need to cover that in my speech, if noble Lords do not mind. I was very touched and moved by the personal stories of my noble friend Lady Newlove about the Bagnall family—I am very pleased that super Sam is thriving—and by the stories and important personal experiences related to us by the noble Baronesses, Lady Foster, Lady Taylor and Lady Blake, the noble Lord, Lord Patel, and my noble friend Lady Wyld. I am very grateful to them for contributing to this debate in such a powerful way.
To conclude, these measures will provide valuable support and protection for parents during some of the most stressful days of their lives, when their children are in neonatal care. The Government are pleased to support this Private Member’s Bill and to deliver our manifesto commitment. Supporting the Bill is in line with our ongoing commitment to support workers and build a fairer, high-skilled, high-productivity, high-wage economy. It is good to see that there is such fabulous support from across the political spectrum in the House for this important measure, as is clear from today’s debate. I very much look forward to continuing to work with my noble friend Lady Wyld as the Bill progresses through the House.
My Lords, I am enormously grateful to everybody who spoke today, and I shall take a few moments to reflect on some of the points that were made.
When I saw the speakers’ list and the name of the noble Lord, Lord Patel, I knew we would have a very moving debate. I said to him in the tearoom, “Try not to make it too moving because I will have to get up and respond to you without becoming wobbly”. He told stories and shared the memories that he has of all the people he has looked after, including Sarah and the other mothers and babies; they will remember him for the rest of their lives, and I pay tribute to him. I share his points about implementation; others have echoed those, so I will come back to that.
All I can say to the noble Baroness, Lady Foster, and her 9 pounds and 14 ounces son, is that she is a stronger woman than I am, and I am so grateful that she spoke. I very much hope that this will be mirrored in Northern Ireland. She made very powerful points, as others did, about the importance of early years and the other work that is going on in this area, and for this legislation to be part of a wider picture.
My noble friend Lady Newlove always speaks with such passion in every debate she comes to. I thank her for bringing the real-life experience and bringing to life what people go through. As my noble friend the Minister said, thank goodness for super Sam, and I pay tribute to him. More widely, she said Sam is having language and speech therapy today. That underlines the point made by others that this is holistic; it is about children as they go through their early years. We spend a lot of time in this House—the noble Baroness, Lady Taylor of Bolton, said this—talking about when things go wrong later, such as family breakdown, mental health problems and young people offending. But the building blocks are there. I agree with the noble Baroness, Lady Foster, that the Princess of Wales has shown great leadership on this—long may it continue.
The noble Baroness, Lady Taylor of Bolton, talked about our attitude towards fathers. When we hear about skin-to-skin contact, the support for mothers, and the loneliness mothers face when they are in this situation and the impact on their mental health, I think we have a way to go in changing our attitudes towards fathers and what we expect to provide for them in these most crucial days.
As the noble Baroness, Lady Blake, said, this was an emotional discussion, and I thank her very much for her support. I agree with her that there is more work to be done behind the scenes and I commit myself to doing that. I should have thanked those in the Bill team in my opening speech, who have been absolutely brilliant. Again, I thank my noble friend the Minister. I will push him on implementation and other issues, but I am sure he can cope. With that, I commend the Bill to the House.
Bill read a second time and committed to a Committee of the Whole House.
Shark Fins Bill
My Lords, it gives me great pleasure to introduce this Bill. I begin by paying tribute to the honourable Christina Rees, who so expertly steered it through its Commons stages. As she has now passed the baton on to me, I hope I can complete the job with at least half the passion and determination that she has shown so far. I also pay tribute to the many marine and shark conservation groups that have campaigned so effectively to highlight the need for this legislation, in particular, the Shark Trust, Bite-Back and Shark Guardian. I thank the Minister in the Commons for ensuring that the Bill had a fair wind. I hope this commitment from the Government will continue here through our various stages of consideration.
This is fairly simple but important legislation that tackles acts of needless cruelty and species decline in the marine sector. Anyone who has seen footage of sharks being caught, having their fins sliced off and then being thrown back into the sea to have a slow and lingering death will have been shocked at the callousness and waste involved. It is estimated that only 2% to 5% of the shark is ever used in this practice. All this is being done to supply the supposed delicacy that shark-fins represent in parts of the food sector. This is a huge global trade: 1 million tonnes to 2 million tonnes of shark-fins are traded every year and it is estimated that 73 million sharks are killed each year to supply these fins. This is not only cruel but it upsets the vital marine ecosystems in which sharks play an important part as a keystone species. This practice exacerbates the loss of the species through fishing and marine degradation. Already, one-quarter of the 500 or so shark species are on the vulnerable or critically endangered list.
I am pleased to say that the practice of shark finning was rightly banned in UK waters in 2003, and that relatively few establishments in the UK continue to serve shark-fin on their menu. Those that do will need to import the fins. It is this import and export of fins that the Bill seeks to address, because it is a global trade. Britain still facilitates the trading of fins around the world, and thereby helps to maintain the cruel and unnecessary practice. The Bill will ban the import and export of shark-fins, or items containing shark-fins, into or from the UK. This will apply only to fins that have been removed from the body of the shark; it does not impact on the consumption of shark meat as a whole, or fins that are still attached to the carcass. The Bill also includes the provision of exemption certificates, underpinned by strict application processes, to enable conservation and educational activities to continue.
The Bill has broad public support. Defra ran a call for evidence to better understand the shark-fin trade and its impact in both the UK and overseas. Most respondents emphasised their strong opposition to shark finning and the need for additional measures to address threats to sharks. The Government’s impact assessment shows there to be a minimal impact on business, the main impact being a loss of income to fishers who export shark-fin products. However, it was also recognised that those who trade in shark-fin products do not depend on this income, so their jobs and livelihoods are unlikely to be significantly affected. We can proceed with the Bill in the knowledge that there will be very few disadvantages.
At its heart, the Bill will address the current loopholes that allow shark-fins to be sold and consumed in the UK. More importantly, it sends a message to our global trading partners that this practice is unacceptable. It will establish the UK as a global leader in the conservation of sharks and, I hope, set an example that other countries will follow. While the main market for fins is in Asia, a number of European countries, such as France, Italy and Spain, are significant players in supplying this market. By passing the Bill we would hope to be able to persuade these countries to follow suit.
I hope noble Lords will feel able to support the Bill, which provides greater conservation for sharks at home and provides leadership in protecting those endangered marine species across the globe. I beg to move.
My Lords, it is a great pleasure to follow the noble Baroness, Lady Jones of Whitchurch. I am very grateful to her for introducing this Bill in such a measured and comprehensive way. She is quite right: it is about leadership. I do not think that the importation of shark-fins is a huge issue in this country numerically. It has been a while since the “maw and gulf” of the “ravin’d salt-sea shark” was regularly used in Scottish witches’ brews, and it is not a massive issue by tonnage. However, there is a question of moral leadership and example. We think of ourselves as a small island, but we are, in fact, at the heart of a huge archipelago of overseas territories. Looking at the waters controlled by those territories when put together in the Caribbean, the south Atlantic, the Indian Ocean and the Pacific, it is an area about the size of India. So, if anything, we are a maritime nation and an aquatic state. Therefore, it is incumbent on us to show a commensurate sense of responsibility when it comes to the stewardship of marine life.
I will make one point. We are enabled to pass Bills of this kind because we now have our own trade policy. I know it is a point that is unpopular in this Chamber, but it is worth saying that. As happened when we unilaterally lifted all our tariffs and restrictions on Ukrainian exports, this is an opportunity for us to show leadership in the hope that our friends and allies in the European Union will follow. I am conscious of speaking between our two excellent noble Baronesses, Lady Jones of Whitchurch and Lady Jones of Moulsecoomb, who are two outstanding contributors to your Lordships’ counsels—Jones the Strike and Jones the Green, as it were. I hope my dear friend the noble Baroness, Lady Jones of Moulsecoomb—who is a proper 30-year standing friend, and whose homemade jam is a delight to my children—will take the opportunity to acknowledge that this is something we are able to do because we are now a fully sovereign country, which is something that happens so rarely. It is precisely issues of this kind that ought to be determined through our national mechanisms and procedures.
My Lords, it is always fascinating to follow my noble friend Lord Hannan; as he said, we have been friends for 30 years since we met on the slopes of Mount Sinai. Of course, he had to bring Brexit into it: a failed project—so sad—even though I supported it.
When I first saw this Bill on our Order Paper, I got quite excited because I am constantly fighting the forces of growth and blindness to our climate crisis. I thought, “What a really good Bill”, because this is clearly something that no one can argue against. Then I found that no one is arguing against it. In fact, even the Government support it. What is the point, really, in my saying anything? But I will say something anyway because, for me, the whole issue of shark-fins encapsulates the human problem that we have in our relationship to our planet. There is an attitude among a vast majority of people—particularly in this House—that the planet is there for us: it is there for us to rape and pillage, to use as and when we need. As a Green, I can see that simply is not true. The majority of people think that this whole world is at our disposal—animal, vegetable, mineral—and I argue that it is our lifeline. It is our home, and we ought to be looking after it better. Humans have been around, more or less in the form that we are at the moment, for about 100,000 years. In evolutionary terms, that is like being tiny little toddlers, and our behaviour is often like toddlers; we are greedy, we grab and we do not follow common sense. We certainly do not seem to understand that earth is our support system.
Listening to the debate on the Budget last week was profoundly upsetting. There was a constant mantra that growth is good, growth is prosperity and growth is well-being. There was no understanding that you cannot carry on with growth when you have a finite planet: our resources will run out. Why should we—in a very advanced country—grab more than our share? After that debate, I also thought that it is ridiculous, and I cannot keep banging on about climate change when nobody is listening. I then saw that they were serving octopus in the restaurant and thought, “There is something I can do: I can stop them serving octopus”. They are an incredibly intelligent species and not necessarily something we need to eat. Even that is proving very difficult. There is also the possibility that we eat shark, which is a fish that often has other terms, like flake or white fish.
This Bill is clearly a brilliant Bill which is going to pass. I am slightly concerned that there is still a small gap about shark-fins that can come in if they are sustainably sourced. That is a slight problem because how are we going to know they are truly sustainable? In the meantime, it is an excellent Bill and I support it 100%.
My Lords, on these Benches we support this Bill. We thank the noble Baroness, Lady Jones of Whitchurch, for bringing it to this House and so clearly articulating it before us today. We were reminded this week that sharks are not just over there, in our overseas territories; we had a small-tooth sand tiger shark found on our beaches in Hampshire. They are here as well as overseas, so this is an important initiative. Personally, I am very grateful because I have a 19 year-old who has been obsessed with sharks since she was three. It is great to have something to speak about in this House where I know the people in my home will actually be interested in what I have said.
As the noble Baroness, Lady Jones, said, we know that one of the major threats to sharks—which are top predators—is commercial overfishing. I was very surprised to see the figures provided by the House’s Library. I was shocked that 100 million sharks were commercially fished in 2010—that is a huge number. The figures are, however, almost out of date so we estimate them. There seems to be a really big lack of data on our marine environments. The Government have invested some more money in data collecting in terms of our species on land, but there is still a lot more work to do in understanding and therefore being able to better protect our marine species in the future.
I think the issue most people have with this Bill and why it is so welcome is the cruelty. Yes, there is the ecological waste, but the cruelty of taking a fin from a shark and leaving it in the sea to die by suffocation, blood loss or predation is something I think all of us find completely abhorrent. It is right, therefore, that it should be banned. As the noble Baroness, Lady Jones, said, this has been banned in our country for nearly 20 years. That was obviously during the time when we were members of the EU, and I will come back to that point in a moment. It will make a negligible effect in terms of how many animals are affected, given the imports are very small. However, as the noble Lord, Lord Hannan, rightly said, it is important that we take the role of global leadership we have very seriously.
There are two instances where the Government can strongly take this forward on the back of this Bill. First, in November last year at the CITES—the convention on the trade in endangered species—a number of new species, including commercial species, were added to the list. By us now having this “fins naturally attached” as standard, we can assist in the propagation of the CITES convention, show our global leadership and encourage other countries to take that forward. It is an important step for us to show our leadership and our commitment to the international obligations that we have in this space. Secondly, we have the Convention on the Conservation of Migratory Species of Wild Animals COP in Uzbekistan in October. Again, by having this Bill on the statute book by that time, it is a proper opportunity for the Government to signal our international leadership in this space. It is excellent timing for us to have this on the statute book in advance of the CMS in October.
I will not make too many points, but I want to pick up on the point that we can legislate on this because we are out of the European Union. Yes, we can—but, as I said, this is going to have a minor impact, and the bigger issue of stopping fishing in our own waters was dealt with when we were members of the European Union. I say gently that this is a Private Member’s Bill. I think we have had five Private Members’ Bills on animal welfare issues in the last two years, yet we are still waiting for anything from the Government on live transport. They could act on this, as we are now no longer in the European Union—and it was also a Conservative manifesto commitment.
Yes, we are out of the European Union, but it would be great if the Government actually got on and said what they felt were the important things to do. There has been nothing on live transport and, equally, nothing on the kept animals Bill. Again, that was a manifesto commitment which we can now act on because we are outside the European Union. That would deal with illegal puppy smuggling, standards in our zoos, keeping primates in our homes and other important issues. We could be dealing with those issues, but we are not. This is a Private Member’s Bill, and I am delighted that the Government have decided to support it. However, it is all very well and good to make political points but, if the Conservatives put things in their manifesto because we are out of the European Union, the Government should deliver on them.
Because we are out of the European Union, we are not in a position to have the leadership role we had when we were members. As the noble Baroness, Lady Jones, rightly reminded us, some of the countries which are still overfishing are Spain, Portugal and France. We are no longer members of the European Union, where we had a brilliant record of pushing those member states to better animal welfare standards—but we are not at the top table any more.
Having said that and got it off my chest, I return to my point that I am grateful that the Government are supporting the Bill. It is important in terms of the global leadership we should be showing, have shown in the past and need to keep showing in the future. Like the noble Baroness, Lady Jones of Whitchurch, I commend the small conservation organisations such as the Shark Trust, which do a brilliant job not only campaigning on these issues but helping people to understand the importance of these top predators and disabusing them of some of the misinformation about these magnificent species, which play such an important role in the ecology of our waters.
My Lords, I thank my noble friend Lady Jones of Whitchurch for introducing the Bill and Christina Rees MP for bringing it through the other place. I start, as the noble Baroness, Lady Parminter, did, by saying how strongly we support the Bill and are pleased to see it in front of us today. As others have done, I pay tribute to the conservation organisations which have been pressing for this, particularly the Shark Trust, which sent a very helpful briefing.
As noble Lords have said, the Bill is so important because of the needless cruelty. In fact, I would say that the practice is just disgusting; I cannot believe it actually happens. Again, it is important to see the Bill in front of us today. Assuming that it goes through—I know it has government support—it then needs to be very promptly adopted, and it needs to reinforce the UK’s position as a global leader in shark conservation and sustainable fishing, as other noble Lords have said.
We have also heard from the noble Baroness, Lady Parminter, and others that the biggest threat to sharks is overfishing driven by demand for many different products, including meat, cartilage and liver oil as well as the fins. Shark finning has of course been banned in many major fishing nations. I remind the noble Lord, Lord Hannan, that it was banned by the EU in 2003, so the EU also has an interest in ending this practice. The other thing we need to think about is that shark-fins are not the only driver of shark fisheries. Banning the trade alone will not curtail the demand for sharks. Having said that, if the Bill is enshrined in law, it will demonstrate the UK’s commitment to shark conservation and sustainable fishing, and we will then have a platform through which we as a nation can encourage other nations to follow suit and also ban these appalling practices.
We have heard that the global trade is significant but that the largest importers are Hong Kong, Malaysia, China and Singapore, which account for 90%. As the noble Lord, Lord Hannan, said, UK imports are historically negligible. However, as my noble friend and others pointed out, it is important that we are able to hold other nations to the high standard that we would expect. By being a global leader on this, we can encourage the nations that are trading in this way to look at doing it in a more sustainable way, as the noble Baroness, Lady Jones of Moulsecoomb, said—like her, I do not quite understand what that means, but it is clearly better than the current practice that is still allowed. She also talked particularly about conservation and marine life, and this is an important step in taking that forward.
I think it was all the way back in May 2022 that the Government reiterated that they were committed to banning the import and export of detached shark-fins and shark-fin products, originally through the animals abroad Bill, along with other items that were going to be banned through that Bill. We now have some Private Members’ Bills that will arrive in your Lordships’ House at some point that look at other aspects from that Bill, but unfortunately, some seem to have disappeared in their entirety, including the bans on imports of fur and foie gras. Can the Minister say what has happened to the outstanding parts of the animals abroad Bill that we were all promised would be banned by a Conservative Government?
On that note, I will finish by totally supporting the words of the noble Baroness, Lady Parminter, about other government promises through the kept animals Bill, which finished Committee in the Commons some time ago now. We are still sitting and waiting for Report on that and to hear what will happen to the pieces of legislation in that which are so important. Are they going to come through piecemeal by PMB? Is that the plan, so that the Government can pick and choose which bits of that Bill they want? If the Government are making all these promises on animal welfare, we need action.
I am very pleased that the Bill is in front of us. It has our strong support, and my noble friend Lady Jones of Whitchurch gave an absolutely excellent introduction to it. However, I am concerned about not just this but everything else that was promised as well.
My Lords, may I say at the outset what a joy it is to respond to a Bill that has universal support? While I am enjoying the moment, I observe that the Bill requires legislative consent Motions from the devolved Governments, and I am pleased to say that, where appropriate, those are being provided.
I thank the noble Baroness, Lady Jones of Whitchurch, for her sponsorship of this important Bill and for the powerful manner in which she has made her case. She is indeed a worthy champion of the Bill in your Lordships’ House. I am also very grateful to all noble Lords for their valuable contributions to today’s debate. I pay tribute to the honourable Christina Rees, who successfully steered the Bill through the other place with passion and clarity, as well as to stakeholders such as the Shark Trust, as other noble Lords mentioned, for their support as we progress this important legislation.
As your Lordships are no doubt aware by now, shark finning is vile and cruel. Shark-fins are removed from a living shark at sea and their finless bodies are wastefully returned to the water. Without their fins, sharks are unable to swim, which means they cannot pass oxygen through their gills so are left slowly to drown. As the honourable Member said,
“the effects of shark finning are devastating, with impacts seen across … species”.—[Official Report, Commons, 15/7/22; col. 654.]
We have over 40 species of shark around the coast of the United Kingdom, including some of the rarest, largest, fastest and most highly migratory in the world. From the sleek and elegant blue shark to the second-largest fish in the sea, the basking shark, the UK has a wealth of shark diversity in its waters.
Shark finning is a practice that has been banned in the UK for almost 20 years, and we also have a “fins naturally attached” policy that means sharks must be landed with all their fins on their bodies, but we are now going further and banning the trade in detached fins and shark-fin products. This underlines the UK Government’s commitment that shark finning must stop, wherever it takes place.
As other noble Lords have said, the greatest threat to sharks is overfishing, driven by the demand for shark products such as their fins. Enshrining the Shark Fins Bill in UK law will demonstrate the UK’s commitment to shark conservation and sustainable fishing, providing a platform from which to encourage action by other nations and fisheries bodies. This Bill gives us the opportunity to be a leading example in shark conservation and enable the UK to hold other nations to the same standard.
As well as an ambitious domestic agenda for sharks, the UK Government champion shark conservation internationally through fora such as CITES, RFMOs and CMS. The UK has long been pressing for stronger international action to protect sharks and was pleased to support the listing of almost 100 shark and ray species, a significant portion of which were co-sponsored by the UK, on Appendix II of the Convention on International Trade in Endangered Species of Wild Fauna and Flora, following a successful Conference of the Parties in Panama last year. This landmark agreement has placed nearly all shark species traded internationally for their fins under CITES, and the UK remains committed to the implementation of these listings.
The UK has also funded a significant portion of efforts to implement existing shark CITES listings, ensuring they are effective and enforceable. This includes pioneering work with international partners to develop identification guides for all listed shark and ray species. The UK has also supported the implementation of further measures in RFMOs, specifically pushing for crucial catch limits to be put in place for commercially exploited shark species to prevent overfishing of species such as blue shark and shortfin mako.
In 2021 it was agreed at ICCAT, the International Commission for the Conservation of Atlantic Tunas, that parties should implement a prohibition on retaining on board, transhipping and landing, whole or in part, North Atlantic shortfin mako caught in association with ICCAT fisheries in 2022 and 2023. This was a pivotal agreement, strongly advocated for by the UK, which will be the first step in rebuilding the stock of the species. As of 1 April, we will also see this species on the prohibited species list, further reinforcing our commitment to the protection of this species.
The convention on migratory species is another key example where the UK has supported the listing of shark species. The CMS provides a global platform for the conservation of migratory species in which we will continue to work with like-minded countries, especially to develop shared objectives on the global conservation and management of sharks.
To turn briefly to the detail of the Shark Fins Bill, it will ban the import and export of detached shark-fins into or out of Great Britain. This ban not only applies to whole shark-fins but includes parts of fins and products made of fins, such as tinned shark-fin soup. In this context, “shark-fins” means any fins or parts of fins of a shark, except for pectoral fins, which are part of skate and ray wings, and “shark” means any fish of the taxon Elasmobranchii. This is all set out in detail in Clause 1.
There is only one exception to this ban, which is where imports or exports will support greater conservation, for example through education and training. This point was raised by the noble Baroness in her opening speech. Importantly, there are strict processes in place to assess applications for exemption certifications to ensure that they do not undermine the overall ban. This exemption process is clearly set out in the Schedule to the Bill. There are penalties of up to £3,000 where the applicant has deliberately provided inaccurate or incomplete information.
In Clause 2, the Bill also amends the existing shark finning regulation 1185/2003, which forms part of retained EU law and includes the amendments in regulation 605/2013. The amendment in this Bill is to make sure that shark finning is not taking place by any other country’s vessels fishing in UK waters, or by any UK vessel wherever it fishes. We remain firmly committed to building on the UK’s strong position on shark conservation.
In supporting this Bill, the Government have conducted a thorough regulatory triage assessment to assess the impacts. We conducted research to assess the costs to businesses and government associated with these measures, and the good news is that this Bill will involve very low public expenditure and costs to business. The imports and exports of shark-fins are already checked for compliance with CITES, so these existing processes will be used to enforce the new requirements in the Shark Fins Bill.
My noble friend Lord Hannan was right to speak of the UK’s leadership and stewardship of marine life but, to be even-handed, I suggest that being in the EU did not impact our ability to designate marine conservation areas around the UK, which was a UK-driven commitment. The noble Baroness, Lady Parminter, mentioned two opportunities for the UK to continue to demonstrate its global commitment and leadership in CITES and CMS. I am sure that my Defra officials present will take note. The noble Baroness also mentioned the kept animals Bill, which my officials say is on Report in the House of Commons. The noble Baroness, Lady Hayman, mentioned foie gras and fur imports in the animals abroad Bill. I will endeavour to write to her with the exact status of those initiatives.
These animals are irreplaceable components of nature’s rich tapestry. We must do all we can to create an agenda to protect the ocean’s richness and diversity. I am sure that noble Lords all agree that this is an imperative for future generations. I conclude on behalf of the Government by thanking noble Lords for their involvement in today’s debate, in particular the noble Baroness, Lady Jones, for her work in guiding the Bill through this House. I also thank the non-governmental organisations that have engaged with our officials throughout the passage of the Bill. This Bill will add a small but vital part to our legislation. I am pleased to reiterate the Government’s support for it, and I hope that we can ensure its smooth passage through this House.
My Lords, I am grateful to all noble Lords who have contributed and given their support. As others said, it is a pleasure to work on such a collegiate and cross-party basis and to be part of this debate.
I am particularly grateful to the noble Lord, Lord Hannan, who made an excellent contribution about the moral leadership we should give. He also quite rightly made the point that sometimes we underplay our leading role as a marine nation and how powerful we are on the international stage because of it. He could not resist mentioning us leaving the EU. As other noble Lords have counterattacked, I say to him that we have given up our leadership in the EU, where we were always a leading voice on animal welfare issues. Now we are doing it from the sidelines, when we could have been at the heart of it. That is a much bigger debate that I am sure he would love to participate further in, but maybe not today.
I am also grateful to the noble Baroness, Lady Parminter, who again reminded us of the international opportunities that we have to press the case and to ensure that we play a leading part internationally in delivering not only these sorts of measures but a wide range of other marine conservation measures. She made the point, as other noble Lords did, about the cruelty that underlines it. It is purely a cruel thing to do. Even if people feel that the cruelty itself is not sufficient, it is also such a waste that you then throw the remaining carcass back into the sea and that it is not used in any useful way, so there are so many strong arguments for this.
I agree with my noble friend Lady Hayman that shark finning is only one step in the conservation of sharks and that we need to do considerably more. I also agree with the noble Baroness, Lady Jones, about octopuses. Maybe that should be our next campaign. I would be very happy to join with her on that one.
A number of noble Lords made the point that this is a Private Member’s Bill and that we are going about this on a very piecemeal basis. I agree with all those points. How much easier it would be if we had the more substantive Bills we have been promised on this. There are outstanding issues around a live export ban, a ban on fur imports, the import of foie gras and many other issues. I am sure we are all pleased to hear that the kept animals Bill is on its way and look forward to participating in that. There are many more debates to be had, but in the meantime I am very grateful for all the support we have been given today.
Bill read a second time and committed to a Committee of the Whole House.
Worker Protection (Amendment of Equality Act 2010) Bill
My Lords, it is with pleasure that I bring this Bill before you today. Its full title is the “Worker Protection (Amendment of Equality Act 2010) Bill”—and it does what it says on the tin. The Bill is about protecting workers specifically from workplace harassment. It amends the Equality Act 2010 to strengthen the legislative protections against workplace harassment committed by third parties, to ultimately help create safer working environments fit for the way we consider workers should be treated today.
I give my heartfelt thanks to my honourable friend the Member for Bath, Wera Hobhouse, for introducing such important legislation and guiding it through the other place. Under her excellent leadership the Bill received strong support from all parties, and from the Government; I hope we can replicate that in this House today.
Before I set out further detail on the measures in the Bill, I first turn to the important context behind it. Five years ago, the #MeToo movement went viral, with over 12 million people around the world sharing the phrase “Me Too” on social media as a declaration of the sexual harassment or violence they had each experienced. This global phenomenon kickstarted much-needed conversations, not only on social media and in the press but in this House. The resulting parliamentary debates and inquiries shone a spotlight on the many appalling experiences of sexual and other harassment in UK workplaces, and it became obvious that this country needed to do better for working people.
The Government Equalities Office’s own survey on sexual harassment in the workplace in 2020 found that nearly a third of all employees surveyed had experienced some form of sexual harassment in their workplace or work-related environment in the previous 12 months alone. This is truly awful—and up with this we must not put.
Recent revelations and press stories have also exposed the vulnerability of workers in this country to workplace harassment by third parties such as customers and clients. For example, we all remember the furore following the Presidents Club charity dinner in 2018, at which female hostesses were allegedly told to wear “black, sexy” underwear and subsequently accused customers of sexual harassment. However, the Equality Act 2010 currently provides no protections for people in such a situation, as the alleged harassment was conducted by a third party rather than a fellow employee. This is the loophole we are trying to close in the Bill. And it is not just third-party sexual harassment that workers are at risk of: there is currently no redress for any third-party harassment under the Equality Act 2010. For example, retail staff who face racist abuse from customers, NHS workers who are subject to homophobic harassment by patients, and pub staff who are harassed by drunken customers in relation to their sex all currently have to rely on the good will of their employer in taking steps to protect them, rather than the law. In the course of doing their job, nobody should have to face that.
The Bill will introduce employer liability for the harassment of their employees by third parties in the course of their employment if the employer has failed to take all reasonable steps to prevent the harassment, and it will introduce a new legal duty requiring employers to take all reasonable steps to prevent their employees experiencing sexual harassment in the workplace. Whereas the employer duty will apply to sexual harassment only, I should be clear that the new third-party harassment protections will cover all types of harassment under the Equality Act 2010. Both new provisions will be enforceable in two ways: by individuals bringing claims to the employment tribunal, and by the Equality and Human Rights Commission undertaking strategic enforcement under their current statutory powers. A breach of the new employer duty may lead to an uplift in compensation awarded to a claimant by an employment tribunal of up to 25% in individual cases.
I understand that there were and are some concerns about the Bill’s interaction with free speech. In particular, some have suggested that, as a result of the Bill, employers will feel that they need to take extreme steps to avoid liability for workplace harassment, including by shutting down conversations and valid expressions of opinion between third parties such as customers in a pub. However, noble Lords will note that, on Report in the Commons, a government amendment introduced into the Bill Clause 1(3), and proposed subsections (1C) and (1D) under Clause 1(2), to clarify for employers and the employment tribunal that such steps are absolutely not required. The amendment was accepted by Members in the other place, and I hope it assuages any concerns noble Lords may have in this regard, although I know that the Minister will speak to this when she makes her remarks.
Furthermore, I would like to highlight that the Bill will not come into force until 12 months after Royal Assent, during which time the EHRC will be developing a new statutory code of practice to take account of the measures in the Bill. This code will be published and subject to a full consultation. In addition, the Government have committed to producing further guidance for employers on the practical steps that they can take to help prevent harassment in their workplaces. These documents will help to make sure that employers know what is expected of them under the Bill and the wider Equality Act 2010, support them and employment tribunals in its accurate implementation and, in doing so, protect against any unintended consequences.
I, my honourable friend the Member for Bath and government officials are already in conversation with industry bodies, including UK Hospitality, to this end. However, in the light of assurances sought from me, can the Minister assure the Fawcett Society and the #ThisIsNotWorking Alliance that the Government will closely monitor the impact of the government amendment and will take remedial action if it is found to be detrimentally interfering with the spirit of the wider reforms? The prize is to make third-party sexual harassment a thing of the past that does not belong in the culture of any workplace for any worker who has a customer-facing role.
To conclude, as my honourable friend the Member for Bath said in her own speech:
“We have turned a blind eye to workplace sexual harassment for far too long. This Bill will help to prevent harassment, protect victims and change the culture around victim blaming.”—[Official Report, Commons, 23/11/22; col. 6.]
I hope that my fellow noble Lords will help to ensure its safe passage, so that we can see it on the statute book as soon as possible. I beg to move.
My Lords, what was the freedom that we really felt the loss of during the pandemic and the associated lockdowns? I suggest that it was above all the freedom of association and assembly. We did not lose the right to speak out, to vote or to worship as we pleased, but we lost the right to congregate in whatever combinations pleased us. It seems to me that freedom of assembly rests fundamentally on freedom of contract. People should be allowed to come to freestanding agreements, one with another, without the state interpolating itself and declaring those agreements to be void.
This is a principle that, far from having been strengthened by our recent experience, appears to be abandoned the world over, in this country not least. We are subject, as so often, to trends from across the Atlantic. This is happening on both sides of the aisle, as they say on the other side.
There has always been a chunk of, let us say, the identitarian left that has subordinated the concept of free contract to the imperatives of identity politics, so all questions of freedom of association tend to be seen through the prism of whether some imaginary club would be allowed to exclude somebody on the grounds of ethnicity. I suppose it is conceivable that such a thing could happen today, but it seems an odd way to determine a general principle. Hard cases make bad law, and hard imaginary cases make particularly bad law.
However, I am more interested in the way the concept of free association and free contract is under attack from the right. I was very struck, for example, by the Governor of Florida, who is being talked up as a potential presidential candidate. He bases a lot of his campaign on having kept Florida open and having avoided the worst of the lockdowns, and yet, such is the nature of the culture war, he was passing laws in Florida outlawing vaccine mandates even on private property—and that seems to me a fundamentally illiberal thing to be doing.
For what it is worth, I thought vaccine mandates were difficult to justify. We now know that vaccines were very good at protecting you but actually very bad at preventing transmission and therefore the case for state intervention was weak. But be that as it may, surely an individual shopkeeper, cafe owner or whatever is allowed to require whatever terms he or she wants from his or her customers. If they say “You can’t come in here without wearing a mask” or indeed, “We won’t serve you without a tie” or “You can’t stay in this hotel with children or pets” or whatever, surely that should be fundamentally a question of freedom and property. Yet, like so many of these trends, it is crossing the Atlantic, and we now in this Bill are starting from the assumption that it is up to the Government to determine things.
I am going to leave the free-speech stuff as I see my noble friends Lord Strathcarron, Lord Leicester and Lord Moylan are speaking after me. I will leave it all to them. I have listened to my right honourable friend the Secretary of State in another place and she says that all these things have been anticipated, and I am sure she would agree with what the noble Baroness, Lady Burt of Solihull, said about the amendments to prevent conversations becoming a source of harassment. But I think there is a wider issue here. Should we not be starting from the proposition that, without a very good reason, it ought to be up to the employer and the employee to seek terms? I find it extraordinary, for example, that we are seriously discussing in this country at the moment whether there should be a statutory right to demand working from home or flexible work. You can do that now. What is to stop anyone saying to their employer, “These are the conditions I would like” and then negotiating them? The idea that we have to go to the Government and get a sort of licence to talk about these things strikes me as fundamentally incompatible with being an open society.
So I ask the Minister: are we certain that we have exhausted every other avenue before we reach for further legislation? It seems to me a fundamental principle of a free society that if I want to work for, let us say, my noble friend Lord Roberts of Belgravia, and he offers me a job, and I am happy with the terms of the contract and so is he, the Government should not come between us and declare our arrangement to be illegal. If, for example, I say, “D’you know, I don’t care about paid holiday, I’d rather have a lump sum”, that should be between us. Is that not fundamentally a question of what we mean by freedom and property?
So please will the Minister reassure us that we have exhausted our arsenal? We have perfectly good, old common-law provisions defending the individual against harassment. We have perfectly good laws against incitement. They do not cease to apply in the workplace. Are we certain that we need this additional legislation and that it is not the worst kind of declamatory legislation—virtue signalling by law—because those statutes invariably end up being the ones with the most unintended consequences?
My Lords, I declare two levels of interest, as a publisher and trustee of a national designated museum.
My objections to the Bill concern only the effect of Clause 1 on freedom of speech and the inadequacies of the government amendments. Everyone knows about the law of unintended consequences, but more relevant here would be another famous law: the law of dangerous assumptions. The assumptions here are threefold and concern the three categories involved: employers, employees and third parties. The Bill assumes that employers are overwhelmingly uncaring and unsympathetic towards their employees. It assumes that employees need to be treated like a protected species, unable to deal with the comings and goings of life in the workplace, and it assumes that third parties—the general public—are disproportionately likely to be foul-mouthed, insensitive and unwittingly offensive.
These unrealistic assumptions amount to a classic case of a solution looking for a problem. In this case, the solution is so draconian, and the size of the problem so minuscule, that the free-speech aspect of the Bill fails the first and most elementary parliamentary test: is it really necessary? The cumulative effect of these unrealistic assumptions can be seen in the Bill as it stands: to turn our fundamental right to freedom of speech into a management-style risk. These may or may not have been the intentions, but they will certainly be the consequences. I prefer the charitable interpretation that they are not intentional, and they just have not been thought through. Thankfully, that is the task of your Lordships’ House as we scrutinise what comes our way.
To take real-world examples of why this part of the Bill will not work in practice, I refer to my declared interests. I publish about 50 books a year and the marketing of each book requires that my team come into contact with the general public—third parties—either at a book launch or a literary festival, or sometimes both. To take the example of a book launch, this would be a private event with invitations sent out to between 50 and 100 guests and I would typically have three or four employees there. In order to be said to have taken “all reasonable steps”, I should on the invitation request that guests do not talk to staff about any subjects relating to sex, gender, race, religion, origins or any other sensitive matter—even if what one says is perfectly legal. I ask your Lordships, after seeing such an invitation—one that discourages any form of legal sociability—would you go to such a cold-water event? Would Waterstones, for example, risk an in-store book signing by JK Rowling or Helen Joyce on the offchance that one of the author’s fans might be wearing a T-shirt that says, “Woman Equals Adult Human Female”, knowing that an employee could sue for hurt feelings—real or vexatious? These are real issues facing real businesses. I suggest we are wading into very dangerous waters.
Less parochially than my own media world, do we really want to live in a society where intelligent people cannot talk to each other openly and legally, for fear of saying something unintentionally offensive in the ebb and flow of normal conversation? Do we really want these conversations to have any rules at all, beyond being legal, let alone to be governed by the ever-evolving vagaries of compliance culture, guarding against the tiny percent who might offend, probably accidentally.
The rules change all the time. If I said the words “woman” or “headquarters” at an Oxfam event and one of its employees took offence and complained, how much trouble would it be in? I note that it invented the offence only a few days ago. I hope we can agree that this is a nonsense that turns one of our most basic freedoms—freedom of speech—from a right to a risk.
The museum I mentioned is a charity, and we receive about 400,000 visitors a year—all totally random members of the public, with totally random views on any particular subject. We have a staff of about 100, many of whom will come into contact with the visitors—the so-called “third parties” mentioned in the Bill. It is quite possible that a few of our staff might be among those who are recreationally offended. If we are very unlucky, there might be one who is professionally offended, and there may be a few who are just easily offended. We just do not know, because we have never had to pry into the private prejudices of our staff before, as we will now have to do to protect ourselves, if these provisions stand.
On the other side of the gate, by no means can we expect all of the 400,000 visitors to be up to date with the current thing, to be courteous or even to be sober. Any encounters between our visitors and staff are totally outside our control. What one is saying to the other is almost certainly legal, and yet, under the terms of the Bill, we will be responsible for the outcomes. This is not only obviously unfair; it is unworkable and inevitably adds totally unnecessary costs for the charity.
On Report in the other place, the Government added last-minute free-speech protection amendments but, on close reading, all these conditions would have to apply in each occurrence, which, taken together, amounts to an extremely narrow and highly unlikely set of circumstances. As I said, this was all done in a last-minute rush and has not been properly thought through. This is easily remedied by adding the word “or” to them, which would at least mitigate some of these encroachments, although, at this stage, we are dealing with least-worst options, regrettably.
My Lords, I declare my tourism and leisure interests—within those businesses, I have probably 250 employees. I am extremely concerned about the Bill, which will have grave implications for freedom of speech as well as imposing huge compliance costs on Britain’s 1.5 million businesses. It is not an exaggeration to say that it is the most momentous and far-reaching piece of legislation currently before Parliament—yet it has received very little parliamentary scrutiny and provoked almost no debate in the public square. If the Bill were merely concerned with sexual harassment, I would have very few objections to it. Indeed, when it was flagged up to representatives in the hospitality sector, their understanding, without exception, was that the only form of third-party harassment that employers will be liable for if the Bill becomes law is sexual harassment. So there is a lack of understanding because of the lack of debate.
Clause 1 will create liability for third-party harassment of all kinds, not merely sexual harassment. Just as employers are currently liable if they have not taken all reasonable steps to prevent an employee overhearing another employee saying something offensive that relates to a protected characteristic, so they will now be liable if an employee overhears a member of the public saying something offensive. This should alarm any of us concerned with free speech, regulatory overreach and the spread of compliance culture.
If the Bill becomes law, businesses will treat their customers in the same way that they treat their employees, at least in some important aspects. Therefore, just like employees, customers are likely to be bound by formal and binding HR-style rules that govern how they interact with employees, so that the employer can demonstrate that it has taken “all reasonable steps” to prevent third-party harassment and so it can begin to manage the multifarious risks that arise from a legal prohibition against unintentional offence. Being told to use your staff’s preferred gender pronouns would be the tip of the iceberg.
Just earlier this week, I saw on Twitter—and I do not go on there that much these days—an unsavoury incident of a young trans woman filming herself shouting at a young server in a fast-food store. That server was doubtless themselves on the minimum wage. She was accusing him of misgendering her by calling her “sir.” The trans woman had evidently taken offence, but rather than quietly and politely correcting the young server that “he” was in fact a “she”, she was screaming blue murder and making quite a scene. The young worker was certainly harassed and could have a case against his employer, but how could the employer have guessed that this might happen? If they had guessed that this might be an eventuality, they could have instituted some gender recognition training, doubtless at a large cost to the company—and the quality of the training out there is arguable. Witness our own Valuing Everyone equally training here in this House, which was frankly patronising at best. That might have placated 48% of the 18-24 year-olds who believe that people should declare or display their pronouns, but not the remaining 52%, or the vast majority of older people who do not see the need or point of such virtue-signalling.
It is hard to conceive how any Government, least of all a Conservative one, should conclude that the compliance culture of HR departments, with their dogmatic rigidity, unreflective worship of fashionable orthodoxy and complete deadness to nuance and complexity, should be expanded beyond the workplace and into pubs, shops, theatres and sports grounds. Yet that is precisely what this Bill will do.
The Equality Act has chilled the atmosphere in workplaces up and down the country with people living in fear of saying the wrong thing and being reported to HR. That chill is now going to spread beyond the workplace into those places where people spend their leisure time. Is that really what the British people want—to live in a society where, if they are overheard telling a saucy joke or expressing an incorrect opinion, such as saying that they do not think trans women are women, they could be permanently banned from their favourite pub or restaurant? Hugh Osmond, the head of Punch Taverns, said:
“How could we stop a group of people coming into a pub and having an offensive chat in the comer? You may even need extra staff walking around the pub policing conversation. You wouldn’t find rules this strict in China or Russia”.
I question whether the UK’s under-threat pub sector will be able to shoulder the compliance costs and liability that Clause 1 imposes. An industry predominantly made up of small owner-operators, who do not have the resources to deal with this, is already under threat. One reason I voted to leave in the 2016 referendum was that, when we joined the EEC more than 50 years ago, Europe had 33% of world trade. When we voted to leave the EU, its share of trade had fallen to 17%. My take on this is that the EU is effectively legislating itself out of business. Extra-burdensome legislation is the last thing that this country needs as we struggle with the cost of living crisis, the mountain of debt built up as a result of our handling of the Covid pandemic, and inflation. This Bill needs a huge rethink.
My Lords, it pains me to find myself in disagreement with the noble Baroness, Lady Burt of Solihull, with whom I have worked on another cause in your Lordships’ House and for whom that I have the highest respect. I know she is motivated only by the highest considerations in bringing forward this Bill.
First, I shall address Clause 2, which I do not think has been mentioned so far. I wish to summarise and dispose of it, so to speak, but I want to come back to it later, which is why I think it is worth mentioning. Clause 2 imposes a duty on employers to prevent sexual harassment in the workplace. It is already the case that sexual harassment in the workplace can give rise to actions against employers, but there is no corresponding duty on their part to prevent it happening. This clause is aimed at filling that gap—uncontroversially, in my view—and that is absolutely fine.
The meat of the Bill is in Clause 1. Clause 1 is an attempt to respond to, in some ways, the events that occurred at the Presidents Club dinner some years ago, which, I say straight away, in my opinion were wholly reprehensible and should not have been allowed to happen, and the people involved should have some form of redress. I believe they do but not necessarily through the Equality Act as it stands, hence Clause 1 coming forward to address those issues.
I am grateful to the noble Baroness, Lady Burt, for arranging a meeting for me with the Government Equalities Office, which supports the Bill. I am grateful too for the written briefing that I have had from the Fawcett Society, in which it draws attention to the fact that 56% of women working in the hospitality sector experience sexual harassment. That is clearly unacceptable, but the first question to ask is: does Clause 1 do anything for them? What does it do for the people who served and were abused at the Presidents Club dinner? I think it probably does nothing for them at all, because it specifically says that it applies to employees.
I know nothing about the Presidents Club dinner and the particular arrangements on that occasion, but I know that, in general, it is the case that where large banquets and other events like that take place, even in hotels, the staff are normally supplied by a silver service agency, which does not employ them in the first place. I once had an office in the same corridor as a silver service agency—a very reputable firm that supplied staff to many events throughout London. The office was occupied only by the owner of the business and his secretary; there were no other employees. The staff who were supplied to wait at table at such events were very often students and people like that. They were part of a contact list, and the owner would assemble these people as occasion required. They were contract workers. Section 40 of the Equality Act defines employees, and generally speaking the status of employee arises for someone who has a contract of employment. However, a contract worker is not an employee, and they are dealt with in a separate part of the Equality Act.
So my first comment is that I do not think that Clause 1 would have done anything at all for staff working at the Presidents Club dinner, nor would it do anything for other people in similar circumstances, because large numbers of people in the hospitality sector are not in employed status but are in fact contract workers. It seems to me that the Bill does not even do what it intends and sets out to do.
Secondly—again taking the Presidents Club dinner as the starting point—the Bill chooses to go way beyond sexual harassment. Clause 2 is about sexual harassment but is not pertinent to the Presidents Club dinner. Clause 1 defines the harassment simply as “harassment”; it does not say “sexual harassment”. However, in Section 26 of the Equality Act harassment is defined, and it covers all relevant protected characteristics. So the Bill goes way beyond sexual harassment, as I think my noble friend Lord Strathcarron mentioned, and would concern religion and all the other protected characteristics in the Act. That seems to me to be an overreach and a misfiring of the Bill, which could be so much better targeted at the evil that it intends to address.
This brings us to the freedom of speech problems. Because the net has been cast so wide and covers all protected characteristics, the problems that my noble friend Lord Strathcarron instantiated in relation to his own experience as a modest publisher and a trustee of a museum immediately arise. In places with large numbers of persons having access, the policies that will need to be put in place will need to be very in-the-face of those who are likely to have access to such an event. I do not know what they will consist of, but—this is another important point—they all have to be reasonable steps.
The Fawcett Society brief says that employers will be required to take “reasonable steps”. That is not what the Bill says; it says, “all reasonable steps”. There is a world of difference in law, as I understand it, between “reasonable steps” and “all reasonable steps”. A small business, which might take the reasonable steps that it can see for itself but which fails to take other steps that larger businesses are taking—perhaps it is not even aware that those larger businesses are taking those steps—would be found to have failed to have taken all reasonable steps. At the very least, it should be required to do what the Fawcett Society thinks it will be doing and take “reasonable steps”. In my view, the word “all” needs to be removed.
I will now slightly repeat a point made by my noble friend Lord Strathcarron in coming to the question of the defence inserted by the Commons in new subsections (1C) and (1D). The meat is in new subsection (1C), where we find conditions which have to be met before that particular section can be prayed in aid by an employer. As drafted, all those conditions have to be met. I will not read them out because noble Lords have them in front of them and they are easily read, but each is quite onerous in itself, and cumulatively they will barely be available to employers when they come to an employment tribunal, should they do so. All this will do is result in more and more policies and more and more compliance culture as employers attempt to protect themselves from being sued, because their objective is to avoid ending up in an employment tribunal in the first place rather than to have a defence when they get there, which is completely understandable.
My final point is more of a query, because I am doing my very best on this. The noble Baroness, Lady Burt of Solihull, said that there would be a statutory code of conduct issued by the Equality and Human Rights Commission, which would show how the Bill would work. However, I cannot find it in the Bill; I cannot find a basis in the Bill for such a code of conduct. The notes produced by our own Library in the House of Lords say, as the noble Baroness said, that there will be a statutory code of conduct and that this is referred to in the Explanatory Notes. Look though I might in the Explanatory Notes, I cannot find that either. But then I note that the Library note puts this remark about a statutory code under its explication of Clause 2, so it possibly means that there will be a statutory code of conduct in relation to Clause 2. That would be absolutely fine—I have come back to Clause 2, as I said I would. I regard Clause 2 as uncontroversial, so supporting it with a statutory code of conduct seems to be a sensible step. But where is the evidence that there will be statutory code of conduct in relation to Clause 1, which is the one that is causing us so much difficulty?
Moreover, a point of considerable concern is that even if we find that there is to be such a statutory code of conduct—my noble friend the Minister might be able to give an assurance and explain what its statutory basis is—we are, in effect, outsourcing to the commission most of the substance of the operation of this clause that we are being asked to approve today. I think that is rather troublesome.
I do not say, as my noble friend did, that this piece of legislation has been rushed. I do not know whether it has been rushed, but it is ill thought out and misses the point. It does not do anything for the people it is trying to help, and it creates difficulties in other areas. My view is that it would be sensible if it were withdrawn and rethought; otherwise, it will have to be amended in Committee.
My Lords, I thank the noble Baroness, Lady Burt, for bringing this Private Member’s Bill to this place. I pay tribute to colleagues in the other place for their involvement, particularly in the debate that took place. I state from the outset our disappointment that the Bill is necessary at this moment in time. It reintroduces provisions made by the last Labour Government under the Equality Act 2010 that were removed by the coalition Government in 2013, who justified it by stating that the protections imposed an unnecessary burden on business. Surely, protecting people from harassment, especially in the workplace, should be seen never as a burden but as a responsibility. It is pleasing that, nine years later, there has been a change of heart by the Government, but concern remains about the length of time that has elapsed since 2019, when consultation on strengthening protections against harassment in the workplace was launched.
It is important to restate the scale of what we are facing. This needs to be listened to, heard and repeated on all occasions. Workplace sexual harassment is experienced by a minimum of 40% of women. Currently, the law on workplace sexual harassment is enforced only by individual women taking cases forward and there is no duty on employers to take preventive steps, but we know that this is not working. Some 79% of women do not report their experiences. The reforms in the Worker Protection (Amendment of Equality Act 2010) Bill ensure that more employees are protected and that more employers take responsible steps to prevent harassment.
At a minimum, as I said, 40% of women in the workforce experience sexual harassment over the course of their careers. Different women experience different rates and forms of harassment. Women and men of colour report even higher rates of sexual harassment. Seven in 10 disabled women and 68% of LGBTQ+ workers have experienced workplace harassment. Occupations where workers are exposed to male third parties—customers, clients or patients—also carry a higher risk for women who work in them. Some 56% of women working in the hospitality industry have experienced sexual harassment, as have 47% of those working in the services industries. In 2017 a survey showed that up to 18% of those who had experienced workplace sexual harassment said that the perpetrator was a client or customer.
Sexual harassment causes a variety of harms, including psychological, physical and economic. Morally and legally, employers should be required to take all reasonable steps to stop sexual harassment occurring. Disrespectful and abusive workplaces also have lower performance and productivity, and increased staff turnover.
What do we need to change? It is highlighted in the Bill. We have mentioned third-party harassment; we are trying to seek ways to make sure that staff members who face these problems have legal protection. The extent to which women who work in client-facing roles are unprotected by current laws was highlighted, as we heard, in the highly publicised Presidents Club scandal. The women who faced violations of their dignity in that case would not have had recourse to the law as it currently stands.
As I said, this was briefly on the statute book from 2010 to 2013 but was removed because the Government at the time believed that protection was present elsewhere in the law. However, following a subsequent court case, the Government now accept that there is a gap in the law. As I think we have heard, data from the House of Commons Library using the Government’s own survey indicates that 1.5 million people experience sexual harassment from a third party each year.
On the preventive duty, as I said, despite the protections in existing law, workplace sexual harassment is widespread. It is underreported for many reasons, including fear of repercussion, lack of awareness regarding rights, and fear of not being taken seriously. I am afraid to say that those fears are well founded. The EHRC found that in nearly half the cases where employees made a report, the employer took no action, minimised the incident or placed the responsibility on the employee to avoid the harasser.
Our current laws on sexual harassment mean that employers are not required to be proactive and take action to drive the necessary change. This also leaves managers not knowing how to respond appropriately. Only 45% of managers feel supported by their organisation when reports are made to them. Most importantly, it leaves women who have encountered traumatic experiences unsupported. We can and surely must do better.
The law needs to shift focus from redress to prevention. Currently, the question of whether employers have taken adequate steps to prevent harassment arises as a defence only if an incident of sexual harassment has already occurred. This of course means that employers are not required to take actions that prevent sexual harassment occurring. In 2018 the EHRC found that only a minority of employers had effective processes to prevent and address sexual harassment.
Over the last few years we have seen the Government make various commitments to take action. In 2021 the Government’s response to a 2019 consultation on workplace sexual harassment led them to make commitments to introduce a new preventive duty for employers, introduce more explicit protection from harassment by third parties, and consider extending time limits for Equality Act claims in the employment tribunal from three to six months. Do those commitments remain government policy? It was perplexing for us all, having had these commitments, to find no reference to them in the Queen’s Speech last year. We hope that the Bill is the mechanism through which these changes can be enacted on to the statute book.
So we are looking for answers to the issue of employer liability for third-party sexual harassment and the standalone preventive duty. As we heard earlier, at Third Reading in the other place, the Government amended the Bill so that employers will not be liable for workplace harassment, other than sexual harassment, where it arises as a result of a protected conversation. It is questionable whether this amendment is necessary. However, the implementation of a preventive duty and third-party liability is indeed a big step forward and consequently, we continue to support the Bill.
I have some questions for the Minister today. I support the noble Baroness, Lady Burt, in her request for information on how the amendment’s impact will be monitored and what remedial action will be taken if it does indeed interfere detrimentally with the spirit of the wider reforms. The Government have indicated their commitment to the reforms, but are they still committed to extending from three months to six months the time limit for bringing to the employment tribunal all claims made under the Equality Act? Many organisations support this extension, as the current three-month limit means that pregnant women have to bring a case in the first few months after birth, and sexual harassment victims when they are still incredibly traumatised.
It goes without saying that I look forward to the Minister’s response to the matters raised today. I particularly look forward to hearing that the Government are committed to supporting the Bill.
My Lords, I congratulate the noble Baroness, Lady Burt of Solihull, on leading this important debate and I compliment her on her excellent introduction to the Bill. Similarly, I pay tribute to the honourable Member for Bath, who introduced this Bill in the other place, where it enjoyed cross-party support and the full support of the Government. I also thank noble Lords who have contributed to today’s Second Reading debate. It is with great pleasure that I reaffirm the Government’s support for the Bill.
As the House is well aware, the harassment of workers remains all too common. The Government’s own experimental survey uncovered completely unacceptable levels of sexual harassment, and the recent review of the Metropolitan Police by the noble Baroness, Lady Casey, shows how harassment and discrimination can be baked into a system. The testimony and the data make it clear that mistreatment of women is a feature of the toxic culture that we have seen revealed in her report. I thank the noble Baroness, Lady Blake of Leeds, for giving us more information on this issue and bringing it into sharp relief today.
The noble Baroness, Lady Burt, set out the details of the Bill’s two main measures, and I want to take the opportunity to reiterate their importance. The third-party harassment protection and employer duty represent a significant strengthening of protections for those affected by harassment at work. What is more, they will not only raise awareness of the nature of harassment but motivate employers to prioritise the prevention of workplace harassment and, ultimately, improve workplace practices and culture.
I will touch on the Bill’s interaction with free speech, and the government amendment made on Report in the other place. Let me be clear: we have listened not just here to Members today but to those outside this House. We understand that there are real concerns about constraints on free speech and how our laws can have a chilling effect on the ability of people to speak their minds and voice their opinions.
The Bill is about the harassment of workers, and it is right, particularly in light of the review by the noble Baroness, Lady Casey, that employers take their responsibilities seriously and crack down on harassment and discrimination. Those who seek to harass people at work will not be tolerated.
However, freedom of speech is a vital pillar of our society, and I reassure all noble Lords that the Bill will not inhibit free speech. As well as casual conversations, no one wants to prevent rigorous discussion or intellectual debate, which are crucial to progress in this country. It is for these reasons that we amended Clause 1 to make clear that, while employers will be expected to take action against workplace harassment under the Bill, this should fall short of prohibiting the appropriate conversations of others. That was never the intention of the Bill, and it is now clear on the face of it. We have also specified the conditions which must all be met in order to trigger the amendment, to provide full clarity.
Some of the concerns expressed are about the “what if” questions. It is right that we test and rigorously examine the scope of the Bill, but legislators can go only so far in predicting and accounting for every scenario. The amendment we have put in place signals to employers where their ceiling of action should be, and the Government trust that they are best placed to assess how to implement the law according to the business within which they operate.
The implementation of the Bill will be supported by guidance from the Government and the Equality and Human Rights Commission. The Government have committed to support the EHRC in developing a statutory code of practice on workplace harassment, which will be published as the measures in the Bill come into force, one year after Royal Assent.
We have had assurances from the EHRC that it agrees that the measures in the Bill are a necessary and proportionate means of preventing unlawful harassment and are compatible with freedom of expression. The EHRC has also reassured us that its new statutory code of practice on workplace harassment will guide tribunals to consider the reasonable foreseeability of harassment occurring when determining employer liability.
The EHRC is rightly independent of government and, as such, it is up to it to determine the contents of the code, following consultation. The code will then be considered by the Secretary of State and, if approved, laid before Parliament. But, in the first instance, we will encourage the EHRC to ensure it clarifies the following points. Here I reassure the noble Lord, Lord Moylan, that it will include Clause 1 as well as Clause 2.
First, while employers will be expected to take action against workplace harassment under the Bill, this action should fall short of prohibiting the appropriate conversations of others. Secondly, employers will be expected to take only steps that are considered reasonable in their specific circumstances, meaning that the implementation of preventive measures should take into account known risk factors, as well as the size of the organisation and the resources of employers. Lastly, employers are not expected to take extreme or unreasonable steps to prevent the harassment of their employees, including the cancellation or refusal of bookings for lawful events, or hiring “banter bouncers” to actively police conversations in their establishments.
We will also encourage the EHRC to provide examples which are industry specific, such as guidance for venues that host speakers and entertainers, or workplaces which require frequent interaction with third parties.
What is more, the Government will also publish detailed guidance for employers about the kinds of steps they should be taking to prevent harassment in the workplace. This will improve employers’ ability to engage with their existing duties in this area, and help them to ensure that they have taken “all reasonable steps” to prevent harassment. I hope that that answers the points made by the noble Baronesses, Lady Blake and Lady Burt of Solihull. I can provide assurances today that the equality hub will monitor the impact of the Bill, including the amendment, to ensure it is accurately interpreted and implemented according to the spirit of these reforms. The Government will formally review the measures after five years—that was another issue that both noble Baronesses brought up.
Relatedly, I understand that concerns have also been raised about the requirement on employers to take “all reasonable steps” to prevent workplace harassment—this was brought up by a number of noble Lords. It is important to note that the concept of “all reasonable steps” has been in the Equality Act since its inception in the context of employers’ liability, and that it is well understood by employers and employment tribunals; this is nothing new. What is “reasonable” in any particular context is a question of fact for the tribunal. Factors including the work environment, the size of the organisation and known risk factors, as well as cost and practicality, are all relevant considerations.
What constitutes “all reasonable steps” is not currently defined in law and we do not intend to do so, as this would remove the flexibility to take a proportional approach based on the individual circumstances of the workplace. The alternative would be to set out a list of “all reasonable steps” by workplace context, which would mean creating an extremely complex system that might still not account for every workplace context and certainly would not be exhaustive. While it would therefore be undesirable to define “all reasonable steps”, the Bill as amended now makes clear to employers that, in certain cases, this should not include shutting down conversations or preventing the expression of opinion—in other words, setting a ceiling on what can be considered a “reasonable step” for an employer to take to avoid legal liability for workplace harassment. Both the EHRC’s code of practice and the Government’s guidance will provide further clarity for employers as to what “all reasonable steps” means for them, in addition to the range of existing guidance which is already available for employers in this area, including the EHRC’s current employment code of practice.
I now turn to a few other things—well, more than a few, I think—brought up by noble Lords. My noble friend Lord Hannan asked whether we had exhausted non-legislative options to tackle workplace harassment. There is already a wide range of guidance available on workplace harassment, such as the EHRC’s employment code of practice I just mentioned. However, as we have heard today, workplace harassment remains a persistent problem in this country, as the noble Baroness, Lady Burt, outlined. In particular, the Presidents Club scandal that has been mentioned more than once shows exactly where this country’s legislation fails to protect vulnerable workers: without the Bill, we know that workers have no protection from third-party harassment, other than the good will of their employer, and this is just not right.
The noble Earl, Lord Leicester, and the noble Lords, Lord Strathcarron and Lord Moylan, brought up the issue of free speech. I make it clear that the Government appreciate the concerns about free speech. It is a cornerstone of British values and it will only be strengthened, in my opinion, by the Bill. The Bill, though, concerns an employer’s liability only for workplace harassment, not for trivial upset. With all cases of harassment under the Equality Act 2010, courts and tribunals will be required to balance competing rights on the facts of that particular case, including the rights of freedom of expression and of academic freedom, against the right not to be offended, in deciding whether a person has been harassed.
My noble friend Lord Leicester brought up the issue of burden to businesses. We do not believe that compliance with the Bill needs to be onerous. I should be clear that there is no expectation that employers will be able to stop all harassment ever occurring in their organisation—that would be impossible. Instead, the Bill requires employers to take “all reasonable steps” to try to prevent the harassment happening in the first place.
My noble friends Lord Strathcarron and Lord Leicester asked for an example of how the amendment made to Clause 1 in the other place balances free speech and workplace harassment. It may be that the employment tribunal finds that harassment related to race has occurred where an employee overhears a conversation between two other employees concerning the treatment of immigrants. The employer can show that it has taken all reasonable steps to prevent the harassment by having in place an effective anti-harassment policy. The effect of the amendment is that the policy does not need to include the prohibition of conversations about controversial topics in order for an employer to avoid liability. It is about balance and, from the debate so far, I think noble Lords are misunderstanding the balance that the Government want to achieve in this.
My noble friend Lord Leicester brought up the issue of employers being held for employee hypersensitivity. I can understand the concerns that this Bill will lead to employers being held accountable for merely minor offensive comments made in their workplace, or facing excessive employment tribunal claims from hypersensitive employees. I strongly reassure noble Lords that we are not aware of any evidence that this is the case under the existing employer liability for employee-on-employee harassment, and there is no indication that this will occur as a result of this Bill.
My noble friend Lord Leicester also brought up the burden on the hospitality industry. The Government are clear that compliance with the Bill does not need to be onerous, as I have said. Under current legislation, employers are already expected to take all reasonable steps to prevent workplace harassment to avoid legal liability. Employers in the hospitality industry will be experienced in dealing with incidents of harassment carried out by customers and making those judgment calls in their workplace about the most appropriate steps to take to prevent the harassment and abuse of their employees.
My noble friends Lord Leicester and Lord Moylan brought up liability for third parties, saying that it should arise only in relation to sexual harassment. It has never been the case that liability for third-party harassment applied only in relation to sexual harassment. The third-party harassment provisions that were originally in the Equality Act applied to all forms of harassment. When considering the reinstatement of these provisions in their 2019 consultation, the Government made it clear that the options discussed would apply equally to all forms of harassment under the Equality Act 2010, not just sexual harassment. The fact that the general theme of the consultation was about sexual harassment will not detract from that.
My noble friend Lord Moylan asked about subcontractors, particularly in relation to the Presidents Club. I am sure that the Bill does not extend to the genuinely self-employed, as they do not fall within the definition of “employment” under the Act, but the Bill therefore covers subcontractors and agency workers. The people employed for the Presidents Club were probably in that group of people, but we would have to check.
Without referring specifically to the Presidents Club dinner, because none of us knows the actual facts of that, I ask in general terms whether, for a large banquet served by persons supplied by a silver service, the liable employer—given that they are not employed—would be the silver service company, the organisers of the banquet or indeed the owners of the premises, which might be an hotel, in which the banquet took place.
I will not answer my noble friend, as I do not have a degree in employment law, but I will ensure that I find the answer for him and put a copy in the Library.
My noble friend Lord Moylan also asked why there are so many conditions in the Commons amendment. I understand that a number of conditions all need to be met for the amendment introduced in the other place to be triggered.
I think that is everything. If I have not answered everyone’s questions, I will look in Hansard and make sure that I get a written answer to everyone. At the same time, if noble Lords still have concerns about the Bill and its contents, I would be more than happy to discuss it further with officials. I am happy for anyone to get in touch with me—we will put something in the diary.
I end by underscoring the cross-party support that the Bill enjoyed in the other place, where speakers from all walks of life appealed to this House to maintain that collaborative spirit. So it is with particular determination that I now commend the Bill to the House. The Government are proud to back it and wish it safe passage through its remaining stages.
Wow—this has been quite a discussion. I commend everyone who contributed on the Bill; it shows the degree of concern and even passion that people feel, not only on the part of workers who may be subject to harassment but on the very important issue of free speech, which I will come to in a second.
I thank again my honourable friend the Member for Bath for leading this important legislation up to this point. My gratitude goes to the members of the Equality Hub for their tireless work in developing the policy, and to the Fawcett Society for its advocacy, which ultimately got the Bill to where it is today. My gratitude also goes to the Minister, for reiterating the Government’s support for these new measures, which I know she agrees will bring a real positive change to the lives of many people, particularly the most vulnerable, across all industries.
I will just pick up on a couple of points. The noble Lord, Lord Hannan, was talking about a contract and how you can disagree, make the arrangements and make the changes according to two parties. The problem is that those two parties need to be equal. In my view, the problem here is that people who serve others are not necessarily in an equal situation. That is why it is so important. So many of the people who serve others and carry on these roles are in a lesser position, and they get abused; they get abused a lot. That is what we are seeking to change.
So, while no one would speak more highly of freedom of speech than myself, there is an element of reasonableness that needs to come down when we are discussing these matters. At the bottom of it, the people who are subject to harassment, some of them every day of their lives, do not deserve that. They serve you and me as well, and they deserve to have reasonable systems in place. Nobody is going to intervene and stop a conversation from happening because somebody might get offended. I think the definition of harassment and I take my life into my hands here—is a legal term and for sure I am very far from a legal expert. But we are talking about real distress caused to people who are in that customer-facing role. This is what we are seeking to do today: to at least enable employers to have procedures in place so that people can come to work feeling confident that, even if an incident happens, they will know what to do. They will know that their boss is going to be able to deal with the situation on their behalf. Employers need to think about that. It is a cultural issue that needs to be introduced in so many companies and businesses, for the good of the business but also for the good of the employee themselves.
So I hope that the Minister has managed to assuage some of noble Lords’ concerns. If I can help in any way, I would be more than happy to do so. I therefore invite noble Lords to support the Second Reading of this Bill.
Bill read a second time and committed to a Committee of the Whole House.
House adjourned at 2.07 pm.