Employment Rights Bill

Public Bill Committee, 9 January 2025.

David Mundell (Conservative, Dumfriesshire, Clydesdale and Tweeddale)

Would everyone please ensure that all electronic devices are turned off or switched to silent mode? We will now continue line-by-line consideration of the Bill. The grouping and selection list for today’s sittings is available in the room and on the parliamentary website. I remind Members about the rules on the declaration of interests, as set out in the code of conduct.

Ashley Fox (Conservative, Bridgwater)

On a point of order, Mr Mundell. It is a pleasure to serve under your chairmanship. I seek your guidance on the status of a document circulated to Members by the Scrutiny Unit. It says it is submitted by a Professor Mitie, but I believe that the document is in fact from Mitie, the organisation, and perhaps we do not know its author. Could I ask that we be told who the author is? It is Professor Somebody Else, I suspect. The document also has tracked changes in it, and I seek your guidance on whether those are comments inserted by the Scrutiny Unit or, perhaps, by the author. It is sometimes difficult to know when documents are circulated at the last minute.

David Mundell (Conservative, Dumfriesshire, Clydesdale and Tweeddale)

Thank you, Sir Ashley, for giving notice of that point of order. The issue you have raised is obviously on the record. It will be raised with the Scrutiny Unit and there will be a report back to the Committee on the outcome of that inquiry.

Clause 72 - Enforcement of labour market legislation by Secretary of State

Justin Madders (Labour, Ellesmere Port and Bromborough)

I beg to move amendment 84, in clause 72, page 79, line 15, at end insert—

“(4A) Accordingly, in the case of the exercise by an enforcement officer of an enforcement function of the Secretary of State, any reference in an enactment to the Secretary of State in connection with that function is to be read as, or as including, a reference to that officer or any other enforcement officer.”

This amendment ensures that, where an enforcement officer is exercising an enforcement function of the Secretary of State by virtue of clause 72(4), references in legislation to the Secretary of State in connection with that function will include references to enforcement officers, so that the legislation will apply in relation to the enforcement officer as it would apply to the Secretary of State if the Secretary of State were exercising the function.

It is a pleasure to see you in the Chair this morning, Mr Mundell. I start by making the customary reference to my declaration in the Register of Members’ Financial Interests.

Clause 72 is the first in relation to the fair work agency, and it is one of the building blocks of the agency. I will explain the main elements of the clause, as that will help us to understand the amendment. The clause confers an overarching function on the Secretary of State to enforce certain legislation set out in part 1 of schedule 4, which the clause introduces. The clause provides flexibility for the Secretary of State in how to deliver that overarching enforcement function. It enables them to appoint enforcement officers to carry out the function on their behalf, and it provides that enforcement officers will be able to exercise any of the enforcement functions of the Secretary of State and will have the enforcement powers conferred on them as set out in the terms of their appointment by the Secretary of State.

As I said, the Secretary of State has the function of enforcing the legislation set out in part 1 of schedule 4. The legislation contains references to the Secretary of State having functions and powers in connection with the enforcement of the rights set out in that legislation. It is important that those references can be read as references to the enforcement officers the Secretary of State appoints to act on their behalf; otherwise, enforcement officers may not be able to properly exercise the enforcement functions of the Secretary of State. That would make their appointment, and potentially their enforcement activity, less effective.

Government amendment 84 inserts a new subsection after clause 72(4) to ensure that references to the Secretary of State are read as references to enforcement officers where necessary. The practical effect is that the legislation will apply to enforcement officers as it would to the Secretary of State. This is a technical change, but I hope that Members will see that it is necessary.

Greg Smith (Conservative, Mid Buckinghamshire)

It is a pleasure to see you in the Chair once more, Mr Mundell.

Government amendment 84 looks to us like a drafting correction. We will not rehearse the arguments we have had so many times in the Committee about drafting corrections, but I would be grateful if the Minister could confirm whether the powers in the Bill, which are directly related to the amendment, for enforcement officers to enter and search business premises are any wider in scope than current enforcement powers and, if so, how and why.

Justin Madders (Labour, Ellesmere Port and Bromborough)

I am grateful to the shadow Minister for not rehearsing the arguments, as we may end up having them every five minutes, given the number of technical amendments we will deal with today. He raises an important question about the enforcement powers and powers of entry. There are a number of clauses that deal with that. My initial understanding is that, generally speaking, we are not seeking to widen the remit of current enforcement powers. I will endeavour to write to him if there are any changes or exceptions to that. It may be something that becomes apparent when we debate the clauses in question.

Justin Madders (Labour, Ellesmere Port and Bromborough)

Clause 72 is important, as it sets out the principles of a major part of the Bill. The UK’s labour market enforcement system is fragmented. The enforcement of core rights such as the minimum wage, domestic agency regulations and the gangmasters licensing scheme is split between three different agencies. That often means that workers do not know where to go when they think they might not have received what they are due. That makes enforcement ineffective. It is not fair for workers or businesses.

Clause 72 is a vital building block in the creation of the fair work agency. It is worth noting from the outset that the FWA will be established as an executive agency of the Department for Business and Trade, which means that it will not have its own distinct identity in legislation. The Bill therefore vests responsibility for enforcement of labour market legislation in the Secretary of State. The Secretary of State intends to discharge those responsibilities through the fair work agency, which will be created in administrative documents.

Clause 72(1) places responsibility for enforcing a set list of labour market legislation on the Secretary of State and introduces part 1 of schedule 4, which sets out the list of relevant labour market legislation that the Secretary of State will be responsible for enforcing. There is a general power in clause 118(3) to make regulations that commence different aspects of the Bill at different points. Exactly when the Secretary of State will take on responsibility for enforcement will depend on the detail of those commencement regulations. However, creating the fair work agency is about more than simply moving things around; the agency will also take on the ability to enforce workers’ right to paid holiday and their entitlement to statutory sick pay.

Clause 72(2) explains that part 5 of the Bill confers powers on the Secretary of State and enforcement officers to carry out the purpose of enforcing the labour market legislation in schedule 4. Clause 72(3) makes it clear that an enforcement officer includes anyone whom the Secretary of State has appointed to carry out enforcement of that legislation on his behalf, and clause 72(5) clarifies that enforcement officers appointed by the Secretary of State have only the powers conferred on them when they are appointed. Practically speaking, that means that whether the Secretary of State or an enforcement officer is carrying out this work, they will have the enforcement and investigatory powers they need to do the job effectively. Those powers are set out in later clauses.

Clause 72(5) is also a particularly important safeguard. As I have already said, the responsibility for enforcing legislation and the powers to carry it out will be vested in the Secretary of State, and the Secretary of State will then confer them on the enforcement officers he appoints. However, the FWA’s remit will also include the serious issue of modern slavery and labour abuse, for which certain specially trained enforcement officers will have extensive police-style powers, as set out in section 114B of the Police and Criminal Evidence Act 1984. Certain officers in the Gangmasters and Labour Abuse Authority are trained to use those powers, which are subject to additional oversight, including by the Independent Office for Police Conduct. The powers should continue to be reserved for tackling the most serious issues handled by the FWA. That is why we have included clause 72(5), through which the Secretary of State will specify what powers enforcement officers will have access to when appointing them. We will ensure that powers are conferred only on officers who are sufficiently qualified to use them and who genuinely need them to do their job.

Ashley Fox (Conservative, Bridgwater)

The Minister is talking about granting officials of the state extensive powers currently reserved to police officers. Can he tell us how many additional officials will be granted those additional powers?

Justin Madders (Labour, Ellesmere Port and Bromborough)

What we are doing is transferring existing powers and responsibilities from the existing agency. There are no new police-style powers being created for these officers; it is simply a transfer over to the fair work agency.

Clause 72 is key to delivering the much-needed upgrade to the enforcement of workers’ rights so that it is more effective and fair for workers and businesses. It brings together enforcement functions currently split between several different enforcement agencies and gives the fair work agency the flexibility to respond to a rapidly changing labour market. I commend the clause to the Committee.

Greg Smith (Conservative, Mid Buckinghamshire)

A lot of the detail is in the clauses that follow this one; as the Minister said, this is very much a building-block clause. Although I totally understand and appreciate the rationale for taking enforcement powers that are currently fragmented across multiple different agencies and consolidating them into one, the devil is always in the detail.

Although it might seem sensible to consolidate the powers that are currently so spread out into one agency, this is very much a centralisation of power. The crux of clause 72 is about directly providing the Secretary of State with the overall function of enforcing labour market legislation. Whenever I see such provisions in any legislation, I cannot help but be reminded of the late, great President Reagan’s famous quote about the nine most terrifying words in the English language:

“I’m from the Government, and I’m here to help.”

As my hon. Friend the Member for Bridgwater suggested in his intervention on the Minister, the serious detail is about the practical workings of the fair work agency as it is set up. What will be the total number of enforcement officers, employees and ancillary staff required—admittedly, some will be brought across from other agencies—to form it? What will be the cost to the taxpayer of putting that together? How many people are we actually talking about? I think that, as opposed to the powers that they will hold, was the crux of my hon. Friend’s intervention.

As I said, we accept the rationale for bringing these powers together under one agency, but whenever such powers are granted to a Secretary of State, no matter what the field, there is always uncertainty and scope for never-ending expansion of the new agency, and of the size of the state, to do what is, in many cases, important enforcement work—I do not doubt that. Given the presumption that the Bill will become an Act of Parliament and that the agency will be set up in the way envisaged in clause 72, it would be good to have clarity about the plan for just how big the agency will be and whether the Secretary of State will put any cap on that from the get-go. How far does the Minister envisage the agency going?

Steve Darling (Liberal Democrat, Torbay)

It is a pleasure to work under your chairmanship, Mr Mundell. I broadly welcome the bringing together of powers under the fair work agency. I note that the Secretary of State is due to publish an annual report, but I am sure that businesses in Torbay would be interested to know where in the Bill the critical friend is to hold the Secretary of State to account and ensure that they are being light of foot and driving the agenda we all want to see in this area, so I would welcome the Minister’s sharing that.

Michael Wheeler (Labour, Worsley and Eccles)

As is customary, I draw the Committee’s attention to my declaration in the Register of Members’ Financial Interests. I am a member of the Union of Shop, Distributive and Allied Workers and the GMB.

I warmly welcome this clause and the subsequent clauses, and the establishment of the fair work agency. I remind the Committee of the evidence we heard of the broad support for the agency, including from Helen Dickinson, the chief executive of the British Retail Consortium, who said:

“I think everybody is supportive of and aligned on proposals like a single enforcement body.”––[Official Report, Employment Rights Public Bill Committee, 28 November 2024; c. 99, Q95.]

Jamie Cater, the senior policy manager for employment at Make UK, said:

“The important thing for levelling the playing field is the fair work agency, and making sure that we have an approach to enforcement of labour market policy and regulation that is properly resourced and does have that level playing field.”––[Official Report, Employment Rights Public Bill Committee, 26 November 2024; c. 54, Q53.]

Jim Bligh, the director of corporate affairs for the Food and Drink Federation, said:

“For me, it is about enforcement and having a really strong, well-resourced enforcement agency.”––[Official Report, Employment Rights Public Bill Committee, 26 November 2024; c. 55, Q53.]

It is clear that there is support for the fair work agency across industry. I warmly welcome it. However, while rights for workers are incredibly important, rights are nothing without enforcement. Enforcement is incredibly important, but enforcement does not work without resources. That is to acknowledge that in setting up the fair work agency, which has broad support, we must ensure that it has adequate resources to do its job well and fulfil its function.

Laurence Turner (Labour, Birmingham Northfield)

As always, it is a pleasure to serve under your chairship, Mr Mundell. As is customary, I draw attention to my declarations in the Register of Members’ Financial Interests and my membership of the GMB and Unite trade unions. It is a pleasure to follow my hon. Friend the Member for Worsley and Eccles. I will make two brief complementary points.

First, the establishment of a single enforcement body was one of the core recommendations of the Taylor review. We were told over the last two Parliaments that an employment Bill was coming. Now that it is here, it is welcome that that recommendation is being acted on.

Secondly, in the Australian system of industrial relations, the Fair Work Commission is a long-standing and effective enforcement body that has survived multiple changes of governing party, so there are good international comparators to draw on, as well as the support we heard in the evidence sessions. The resourcing questions that have been raised are valid, and I am sure that those of us who come at this from a trade union background and point of view also take a close interest in the resourcing of the fair work agency. I make those two additional points in support of this measure.

Nick Timothy (Conservative, West Suffolk)

I want to add my support in principle for the idea of a single labour market regulator. I have written about that in the past in different ways and can claim a small amount of credit for the commissioning of the Taylor review into the gig economy when I was working in 10 Downing Street. These issues are very important to me. Hopefully that will reassure the Minister and Labour Members of my cross-party credentials when that might be necessary.

We can all think of ways in which different kinds of labour market exploitation—non-payment of the national minimum wage or living wage; breaches of terms and conditions, health and safety or holiday rights; and illegal working, among many other examples—can be difficult to address if the laws are tough but the enforcement is poor. Those on both sides of the Committee can agree on that.

I want to add to the questions that have already been raised. I think the Minister said that the idea is that no additional powers will be granted and that this is just a consolidation. My understanding is that the fair work agency will not be a single monolithic agency; it is more about different strands of work being brought under a single leadership. If that is the case, presumably the different agencies that exist will do so until this legal change comes into effect. Presumably, the powers of the officers in each of those agencies differ in certain ways. Will that remain the case under the one body, or will there be interoperability and transfer of officers within the different sections under the single regulator? Or is the idea that the officers across those different entities will all assume the maximum powers that exist at the moment so that they can operate across all the different responsibilities of the new agency? I think that would still mean a net increase in powers across those people. What work has been done in the Department to give us an idea of the numbers we are talking about? If the Minister could answer that and then write to us with some more detail and statistics, I would be grateful.

Justin Madders (Labour, Ellesmere Port and Bromborough)

It is pleasing to hear generally broad support for this measure. As my hon. Friend the Member for Birmingham Northfield pointed out, and as the hon. Member for West Suffolk will know better than most, this was previously a Conservative party manifesto commitment, and we are pleased to be able to move it forward.

Some detailed operational questions were asked. At this stage, how the agency will work in practice is still being fleshed out. The current understanding in the impact assessment is that this is about the consolidation of existing resources and having a single point of leadership. Members will recall that, in her evidence to the Committee, Margaret Beels, the Director of Labour Market Enforcement, talked about how her role would be much easier if she were able to combine the powers of different agencies.

The shadow Minister asked whether we will require extra staff. That will be part of discussions with the Treasury. As he will know, there is a spending review on the horizon and Departments have been asked to look at savings. Clearly, we hope that the combining of resources will lead to some efficiencies, but there is certainly a view from a number of stakeholders that enforcement is not at the level it ought to be—

Greg Smith (Conservative, Mid Buckinghamshire)

I fully acknowledge and appreciate the Minister’s point about negotiation with the Treasury, but even if we take it as read that it is right to bring powers into a single enforcement agency, there is always a cost to creating anything new, even if it is a consolidation. Surely, the Department for Business and Trade has a cost for that. There is legislation live, in front of us right now, that seeks to create the agency, so surely he must know the broad cost of setting it up and consolidating those powers.

Justin Madders (Labour, Ellesmere Port and Bromborough)

Yes, the impact assessment sets out the one-off set-up costs. I am sure the shadow Minister can spend the lunch break looking at the detail. In terms of the current enforcement framework, as I say, there is a view that more needs to be done. Of course, we will be adding holiday pay and social security to that, and there is a power to add further areas. We know that generally, when resources are combined, we can deliver more—the sum is greater than the parts.

The Liberal Democrat spokesperson, the hon. Member for Torbay, asked about the critical friend. This Government are always ready to have critical friends—more on the “friend” side than the “critical” side. We will come shortly to a clause about an advisory board, which will have a broad range of stakeholders able to take that role.

Greg Smith (Conservative, Mid Buckinghamshire)

Does the Minister not agree that for any power held by any Secretary of State in any Department, the critical friend is a very simple concept? It is called Parliament—it is all of us.

Justin Madders (Labour, Ellesmere Port and Bromborough)

Indeed it is, and the usual parliamentary scrutiny will apply, but I was talking specifically about the role of the fair work agency. There will be that role, and no doubt as more detail emerges there will be more parliamentary opportunities to talk about the role and functions of the agency.

My hon. Friends the Members for Worsley and Eccles and for Birmingham Northfield talked about the broad support for the agency’s establishment, as indeed did the hon. Member for West Suffolk. I have a list of all the supportive witnesses at the oral evidence sessions, and it is a broad and impressive cast. It includes the CBI, the British Chambers of Commerce, the British Retail Consortium, the Chartered Institute of Personnel and Development, the Recruitment and Employment Confederation, the Food and Drink Federation, the Co-op, Margaret Beels, and of course all the trade unions. There is support across the board for this single enforcement body.

Peter Bedford (Conservative, Mid Leicestershire)

It is a pleasure to serve under your chairmanship, Mr Mundell. There are a few points about the creation of the agency that I would like the Minister to address. I am broadly supportive of synergies and of the rationalisation of public bodies, particularly to ensure that the taxpayer is getting value for money, but have the Government considered the cost of this new body and whether it will result in savings for the taxpayer? Will they consider locating it outside London so that it is more broadly reflective of the country at large?

Justin Madders (Labour, Ellesmere Port and Bromborough)

As a regional MP—a north-west Member—I am always looking to see where we can get more Government agencies out into the rest of the country. It is probably too early to say, but those kinds of decisions are being looked at.

At the moment, His Majesty’s Revenue and Customs deals with minimum wage enforcement. Moving such a specific task across to another body will take some time, so there may well be a period during which HMRC continues to undertake that work, albeit that it is within the remit of the fair work agency. Such operational details will be discussed and dealt with in due course.

The hon. Member for West Suffolk made a point about the powers of individual officers. Initially, we envisage that officers will move into, effectively, their existing roles. It will be a matter for operational consideration in due course whether it is beneficial to extend people’s remits. It will not be required of anyone without sufficient training and safeguards in place, but as the agency develops, it may well be considered advantageous to broaden the role of enforcement officers. One of the rationales for the body is that there are often several aspects to an employer’s breach of obligations, so we want the fair work agency to be able to tackle these things as a whole. However, that is an operational matter that will be dealt with in due course. I commend the clause to the Committee.

Schedule 4 - Legislation subject to enforcement under part 5

Justin Madders (Labour, Ellesmere Port and Bromborough)

I beg to move amendment 169, in schedule 4, page 127, line 29, leave out paragraph 3 and insert—

“3 Section 151(1) of the Social Security Contributions and Benefits Act 1992 (employer’s liability to pay statutory sick pay).

3A Regulations under section 153(5)(b) of that Act (requirement to provide statement about entitlement).”

This amendment clarifies the specific obligations relating to the payment of statutory sick pay which will be enforceable under Part 5 of the Bill.

David Mundell (Conservative, Dumfriesshire, Clydesdale and Tweeddale)

With this it will be convenient to discuss Government amendment 170.

Justin Madders (Labour, Ellesmere Port and Bromborough)

As we have discussed, the current enforcement system for workers’ rights is fragmented. By creating the fair work agency, we intend to bring enforcement into one place. We have been clear that we also want the fair work agency to enforce individual rights to statutory sick pay, because we want to upgrade the enforcement of workers’ rights and stand up for the most vulnerable in our workforce, including those who are unable to work owing to sickness. That is why part 1 of schedule 4 to the Bill, as introduced on 10 October 2024, includes part 11 of the Social Security Contributions and Benefits Act 1992—one of the main pieces of legislation setting out the statutory sick pay regime—in the body of relevant labour market legislation. Government amendment 169 further clarifies the obligations concerning the payment of statutory sick pay under the Act and regulations made under it, which will be enforceable under part 5 of the Bill.

However, there is a wider body of statutory sick pay legislation containing details about the entitlements bestowed on workers and the duties of employers. After further work, we noted that some of those provisions needed to be included under the fair work agency. That led us to amendment 170, which will add the following legislation to part 1 of schedule 4: regulations made under section 5 of the Social Security Administration Act 1992, in so far as they relate to statutory sick pay, which deal with claims for, and payment of, benefits; section 14(3) of the Act, which establishes the duty on employers to provide employees with certain information about their sick pay entitlement; and regulations made under section 130 of the Act, in so far as they relate to statutory sick pay. Those provisions will be considered relevant labour market legislation, which makes them part of the Secretary State’s enforcement function. We will proceed with them once the fair work agency is ready to enforce them effectively. Amendments 169 and 170 are therefore necessary for the fair work agency to deliver its remit on statutory sick pay.

Greg Smith (Conservative, Mid Buckinghamshire)

Amendment 169 clarifies the specific obligations relating to the payment of statutory sick pay that are enforceable under part 5. Similarly, amendment 170 will ensure that those additional obligations relating to statutory sick pay that are imposed on employers by the Social Security Administration Act 1992 are enforceable under part 5. This goes back to our old friend, drafting errors being corrected that should really have been sorted out before the Bill was presented to Parliament in the first place.

Justin Madders (Labour, Ellesmere Port and Bromborough)

We will probably have this conversation a number of times. It is probably a little harsh to say that this was an error, but it would be fair to say that, given the complexity of social security legislation, not every provision was identified when the Bill was first introduced.

Greg Smith (Conservative, Mid Buckinghamshire)

I beg to move amendment 118, in schedule 4, page 128, leave out lines 11 to 16.

This amendment is consequential on NC20 and removes those regulations from the list of legislation subject to enforcement under Part 5 of the Bill.

David Mundell (Conservative, Dumfriesshire, Clydesdale and Tweeddale)

With this it will be convenient to discuss the following:

Amendment 119, in schedule 5, page 130, leave out lines 16 and 17.

This amendment is consequential on NC20 and removes an enforcement authority within the meaning of regulation 28 of those Regulations from the list of persons to whom information may be disclosed under Clause 98 of the Bill.

Greg Smith (Conservative, Mid Buckinghamshire)

I rise to speak to amendments 117, 118 and 119 and new clause 20, which stand in my name and in the name of my hon. Friends on the Committee. I make it clear that they are probing amendments; it will become clear over the next couple of minutes why we seek to probe the Government on the issue.

The amendments would repeal the working time directive within one year of the Bill’s coming into force. Our reason for tabling them is not that we intend to abolish entitlement to holidays, lunch breaks and so on—far from it, and nobody is suggesting that. However, the working time directive has had a troubled history. One example is the difficulties that occurred between the Commission and member states when the Court of Justice of the European Union ruled that employers—all of them public health and emergency services—did not calculate time spent on call as working time, when they should have done. The CJEU consistently declared that practice incompatible with the directive, arguing that inactive time spent at the disposal of the employer must be counted in its entirety as working time. Then, in 2019, the Court ruled:

“Member States must require employers to set up an objective, reliable and accessible system enabling the duration of time worked each day by each worker to be measured.”

The result of that judgment was never formally brought into British law, but as a result of the European Union (Withdrawal) Act 2018, it became part of retained EU law.

Last year, the Conservative Government legislated to clarify that businesses do not have to keep a record of the daily working hours of their workers if they are able to demonstrate compliance without doing so; to amend the WTR so that irregular hours and part-year workers’ annual leave entitlement is pro-rated to the hours that they work; to introduce an accrual method for calculating holiday entitlement for certain workers; to revoke the covid regulations—it seems odd that we are still saying that—and to introduce rolled-up holiday pay for irregular hours and part-year workers. Consultation requirements under the Transfer of Undertakings (Protection of Employment) Regulations 2006 to allow smaller businesses to consult directly with employees would be another measure. That is just the start of how it might be possible to simplify the working time directive. I would be grateful to hear the Minister’s thoughts on how well the working time regulations are working, and on whether any further changes might be made for the benefit of businesses to enable growth in this country.

Justin Madders (Labour, Ellesmere Port and Bromborough)

The working time regulations have had a relatively long history in our legal framework. They provide vital rights: a maximum working week of 48 hours, rest breaks of 20 minutes every six hours, rest periods of 11 hours each day and at least 24 hours each week, and 28 days of annual leave each year. The regulations implement the EU working time directive; the then Government deliberately designed them to provide maximum flexibility for both employers and workers. For example, workers can choose to opt out in writing from the 48-hour week maximum. We believe that the regulations have benefited millions of workers and their families over the years. They afford workers a better balance between work and other responsibilities, as well as improvements in health and wellbeing.

A 2014 review by the previous Government of the impact of the working time regulations on the UK labour market found that since 1998 there had been a decline in long-hours working in the UK and a general trend towards shorter working hours, which is probably not a surprise. The findings also suggested that the impact of the regulations was mainly through increased employment of workers doing shorter working weeks, rather than through a reduction in total hours worked. Annual leave entitlements have increased since the introduction of the working time regulations; many workers now enjoy a more generous leave entitlement than is prescribed by law.

Limitations on working hours and entitlement to a minimum number of days’ holiday can contribute to improvements in health and safety. Most employers accept that a minimum holiday entitlement contributes to physical and psychological wellbeing. Reductions in stress and fatigue caused by excess hours can provide many benefits, including less pressure on health services and better performance at work, with fewer accidents. By establishing minimum standards, the working time regulations also support a level playing field that discourages competition that relies on poor working conditions and a race to the bottom.

New clause 20 would revoke the Merchant Shipping (Maritime Labour Convention) (Hours of Work) Regulations 2018, which provide for adequate rest for seafarers and support the management of onboard fatigue and the wellbeing of seafarers. Revoking the regulations would negatively affect the ability of the Maritime and Coastguard Agency to enforce safe and healthy working conditions for seafarers.

The new clause would also revoke the Fishing Vessels (Working Time: Sea-fishermen) Regulations 2004, which require the UK to implement the International Labour Organisation’s work in fishing convention, which underpins the safe operation of vessels. Fishing is one of the most dangerous sectors in the UK, with 50 injuries per 100,000 workers compared with a UK average of 0.4. We believe that the 2004 regulations are critical to ensuring that workers take the appropriate hours of rest to prevent fatigue-related incidents.

The new clause would also revoke the Merchant Shipping (Working Time: Inland Waterways) Regulations 2003. The Maritime and Coastguard Agency is in the process of conducting a post-implementation review of those regulations. The initial responses to the consultation have indicated a generally positive view from stakeholders.

The new clause would also revoke the Cross-border Railway Services (Working Time) Regulations 2008, which provide enhanced rights and worker protections for those engaged in cross-border rail services, such as train crew for Eurostar services through the channel tunnel. The revocation of the regulations would erode those enhanced protections.

The Government believe that the minimum standards in the Working Time Regulations 1998 and other sector-specific working time regulations have supported millions of workers and their families by enabling them to better balance work and other responsibilities. The Government have no plans to revoke the working time regulations or any of the other sector-specific regulations.

I understand what the shadow Minister says about whether we consider the regulations to be beneficial to businesses, but he will know that there was ample time under his Government to undertake those reviews. Indeed, one was undertaken just over a decade ago, as I said. We have no plans to erode workers’ rights in this area; indeed, one of the fair work agency’s main functions will be to enforce rights to holiday pay, which evidence to the Committee suggests are not being enforced properly.

The shadow Minister says that he has no intention of revoking the working time regulations and that his amendment is probing, but I can only speak to what is before the Committee. If he had tabled an amendment seeking a review of the operation of the working time regulations, that might have been more appropriate in the circumstances. This feels to me like a dog-whistle amendment, so I am pleased to hear that he will not be pressing it.

Greg Smith (Conservative, Mid Buckinghamshire)

I am always pleased to delight the Minister in these debates. It was a probing amendment, and I can confirm that we will not be pressing amendments 117 to 119 or new clause 20 to a Division. However, I will briefly comment on the Minister’s response. I entirely respect him for it, but it was a full-throated defence of the status quo.

Something that goes deep within my view of politics, of government and of public administration is there is always room for improvement in pretty much everything. I say that as much about measures passed by previous Conservative Governments as about those passed by current or past Labour Governments. I refuse to accept that something is as good as it possibly can be and is working as well as it possibly can in the interests of businesses and workers alike. There is some disappointment from the official Opposition that the Government do not seem to want to look again.

Justin Madders (Labour, Ellesmere Port and Bromborough)

Does the shadow Minister not accept that his party undertook this exercise, which is why regulations were introduced last year to amend the working time regulations?

Greg Smith (Conservative, Mid Buckinghamshire)

I fully and totally accept that, but it is our job as the official Opposition, here and now in January 2025, to press the current Government on further measures that could be taken to work in the interests of everybody in our country—workers and businesses alike. Perhaps I accept the Minister’s point; perhaps we could have tabled an amendment to call for a review. Who knows? Perhaps on Report we might. But the fundamental position that I come back to is one that does not just accept the status quo, but is always challenging, always reviewing and always seeking to make things better in the interests of everyone.

When the Minister goes back to the Department and prepares for the remaining stages of the Bill in the main Chamber and in the other place, may I gently urge him to consider in the round, with the Opposition’s support, whether there are tyres to be kicked and measures to be improved in the operation of the working time directive? May I also urge him to ensure—now that we are a sovereign country once more, having left the European Union—that this Parliament can make improvements should it so wish? I beg to ask leave to withdraw the amendment.

Justin Madders (Labour, Ellesmere Port and Bromborough)

I beg to move amendment 85, in schedule 4, page 128, line 13, at end insert—

“( ) regulations 13 to 15E (entitlement to annual leave, etc);”

This amendment would enable the Secretary of State to enforce the entitlements to annual leave conferred by the Working Time Regulations 1998.

Government amendment 85 will add to schedule 4 the additional holiday pay and entitlement regulations: regulations 13, 13A, 14, 15, 15A, 15B, 15C, 15D and 15E of the Working Time Regulations 1998. It will enable the fair work agency to take enforcement action in relation to incorrect payment or non-payment of a worker’s holiday pay and incorrect payment or non-payment in lieu of annual leave entitlement, ensuring that a wider range of complaints can be dealt with more effectively. I commend it to the Committee.

Greg Smith (Conservative, Mid Buckinghamshire)

This is another example of a tidying-up exercise that we really should not have to be discussing in Committee. It should have been sorted before the Bill was introduced.

David Mundell (Conservative, Dumfriesshire, Clydesdale and Tweeddale)

With this it will be convenient to discuss new clause 23—Review of the effectiveness of enforcement of labour market legislation—

“(1) The Secretary of State must establish an independent review providing for—

(a) an assessment of the effectiveness of enforcement of, and compliance with, relevant labour market legislation requirements as specified in Part 1 of Schedule 4 of this Act;

(b) an assessment of the performance and effectiveness of following bodies in enforcing labour market legislation—

(i) Gangmasters and Labour Abuse Authority;

(ii) Employment Agencies Standards Inspectorate;

(iii) His Majesty’s Revenue and Customs; and

(iv) Health and Safety Executive; and

(c) recommendations on strengthening labour market legislation enforcement.

(2) The Secretary of State must lay before Parliament a report of the review in subsection (1) not more than 18 months after the day on which this Act is passed and before a new single labour market enforcement body is established.”

This new clause would require the Secretary of State to establish a review of enforcement of labour market legislation and to report findings to Parliament before a new labour market enforcement body is established.

Justin Madders (Labour, Ellesmere Port and Bromborough)

The UK’s labour market enforcement system is fragmented, as we know. The enforcement of core rights such as the minimum wage, the domestic agency regulations and the gangmaster licensing scheme is split between three different agencies, so workers often do not know where to go when they think they might not have received what they are due. That makes enforcement ineffective.

Clause 72 is a vital building block of the fair work agency. Clause 72(1) will place on the Secretary of State a responsibility to enforce a set list of labour market legislation. It introduces part 1 of schedule 4, which sets out the list of relevant labour market legislation that the Secretary of State will be responsible for enforcing— the national minimum wage, domestic agency regulations, the gangmasters licensing scheme, parts 1 and 2 of the Modern Slavery Act 2015 and the administration of the unpaid employment tribunal award penalty scheme.

Creating the fair work agency is about more than simply moving things around. That is why we have also taken steps to enforce workers’ rights to paid holiday and statutory sick pay. We tabled two sets of amendments to part 1 of schedule 4 to ensure that the fair work agency delivers the policy intent in relation to enforcing holiday pay and statutory sick pay. As we have discussed, our amendment on holiday pay will ensure that the FWA can take action in relation to incorrect payment or non-payment of a worker’s holiday pay and incorrect payment or non-payment in lieu of annual leave entitlement; our amendment on statutory sick pay will ensure that all relevant statutory sick pay provisions that contain entitlements for workers or impose duties on employers are in scope of enforcement.

Part 2 of schedule 4 grants the Secretary of State a delegated power to make affirmative regulations to add new legislation to part 1 of the schedule. The Secretary of State can use the power to bring in scope legislation that relates to the rights of employees and workers, the treatment of employees and workers and requirements on employers, and legislation on trade unions and labour relations. It is a broad power but a necessary one: if we are to deliver the policy intent of genuinely upgrading enforcement, the fair work agency needs to be able to respond to changes in the labour market. We believe that a power to make affirmative regulations, which Parliament will of course have to approve, will ensure proper parliamentary scrutiny for any further changes.

New clause 23 is well intentioned, but it is unnecessary and would be counterproductive. It would impose a lengthy and redundant review process that largely duplicated the statutory duties that are already undertaken by the director of labour market enforcement. She already oversees the enforcement landscape and provides an annual strategy and annual report on the effectiveness of the activities of the bodies that will make up the fair work agency. New clause 23 would do nothing to add to those mechanisms. In fact, it would slow down the creation of the fair work agency.

I turn to clause 75—

David Mundell (Conservative, Dumfriesshire, Clydesdale and Tweeddale)

We will come to that later.

Justin Madders (Labour, Ellesmere Port and Bromborough)

Okay. I have nothing further to say, except that the shadow Minister’s new clause 23 is a duplication of existing requirements that would add nothing to the process.

Greg Smith (Conservative, Mid Buckinghamshire)

I hear what the Minister says about slowing things down, but it would be remiss of me not to comment that if the Government had perhaps taken their time a bit on the drafting of the Bill, we would not be spending so much time in this Committee considering the absolute deluge of Government amendments that tidy things up that should have been right in the first place. Sometimes it is best not to rush things. Sometimes it is better not to dive in head first and just go for the first thing available, but to be cautious, to review and to fully understand all the implications that new legislation such as this will have in the real world.

That is what new clause 23, which stands in my name and those of my hon. Friends, seeks to double-check. It seeks to ensure that the Government are getting this right—not in our interests or those of anyone in the House of Commons, but in the interests of businesses and workers in the real world, trying to get on with their daily lives, get their jobs done and get their businesses growing and providing the growth and prosperity that we all want to see in the country.

As I have said previously, we do not have a problem in principle with the establishment of a new body to oversee the enforcement of labour market legislation. I have made that clear, and hon. Friends who have spoken have made it crystal clear. But we also made a challenge in the previous debate, and that is what new clause 23 is all about. It is about ensuring that we fully understand the scope, cost and effectiveness of this new body.

Any new body, be it a Government body or in the private sector—although the creation of new bodies in the public sector tends to be slower and often cost more than the private sector would manage—will take time and resources, and we would like to be reassured that this is a good use of time and resources. I repeat that our instinct is that it probably is. Our instinct is that it does seem to make sense, but we can never rely on instinct or on that which might look good on paper as the absolute cast-iron test. It is about the real evidence.

Laurence Turner (Labour, Birmingham Northfield)

We heard from the hon. Gentleman earlier in the main Chamber about sustainable aviation fuel; I wonder whether he might share with us the shadow ministerial equivalent that he seems to have discovered, because we are covering a huge amount of ground. I just say this to him. We did have the Taylor review, which looked at these matters, including the functioning of the individual enforcement agencies, so I am just wondering: does he think that something has changed, in terms of their effectiveness, since then? We have already had an assessment of the nature that he is calling for.

David Mundell (Conservative, Dumfriesshire, Clydesdale and Tweeddale)

I think we will focus on the latter part of Mr Turner’s remarks.

Greg Smith (Conservative, Mid Buckinghamshire)

Yes, Mr Mundell. I am genuinely struggling to find the connection between my questions in transport orals this morning on sustainable aviation fuel and this Bill. I will gladly offer to have a coffee with the hon. Member for Birmingham Northfield to discuss my passionate view on synthetic fuel in the future, but it really is not relevant to this Bill.

I accept the hon. Gentleman’s latter point, about previous reviews, but new clause 23 is specifically looking at the creation of this new body and is about ensuring that that is the right thing to do and that the cost of it will actually bring the benefit that the Minister and other Government Members have explained that they believe it will. It is incumbent on all of us, whether we sit on the Government or Opposition Benches or for the smaller parties, that we challenge everything put in front of us. Any culture in any organisation that does not challenge what is put in front of it is often weaker for it. That is what new clause 23 is seeking to do.

Inherent in that, notwithstanding the Taylor review, is the aim to ask and double-check whether the rationale takes into account how effectively labour market legislation is currently being enforced and understand what research this Government—not former Governments, but this one—have undertaken on what will be done more effectively or efficiently with the creation of this new body. We would like the Government to assess how effectively the labour market legislation that will be enforced by the new body is currently working in that fragmented sense that the Minister spoke about earlier, and how effective the enforcement of it is, before setting up any new quango.

Generally speaking, new quangos fill me with dread and fear, but this one may be worth while. However, we need the evidence. Will the Minister expand on how matters will change for businesses through the new labour market enforcement authority? What will feel different for them and what changes might they need to make as they prepare for it? New clause 23 tries to get to the heart of that.

Steve Darling (Liberal Democrat, Torbay)

I know from my surgeries and casework in Torbay that discrimination is sadly alive and well. I ask the Minister to reflect on some of the evidence from the Equality and Human Rights Commission, which talked about the provision leading to fragmentation and the possibility of some of its standard work falling between two stools. What reassurances can the Minister give that the good work will proceed appropriately either through the fair work agency, or in a partnership approach with the Equality and Human Rights Commission?

Ashley Fox (Conservative, Bridgwater)

I want to speak in support of new clause 23 and to ask the Minister whether he is familiar with Parkinson’s law. It states that the number of workers in any public administration will tend to grow over time, regardless of the quantity of work done. The corollary is that work expands to fill the time available for its completion.

Although Conservative Members are in favour of the creation of the fair work agency, there is a risk that, over time, it will seek to have more staff and more power, will consume a great deal more of taxpayers’ money and resources, and will impose more on employers’ time, without great result. That is why a review is necessary. We want to ensure that any new authority is lean and efficient. We also want the Government to take the same approach to regulations.

Unfortunately, the Bill is a hefty document. It will impose £5 billion-worth of costs on employers, which will probably result in fewer people being employed, higher inflation and lower growth. It is therefore perfectly reasonable for the Opposition to ask the Government to reflect after 18 months and ascertain whether they can find anything in this weighty tome that they could do better or more efficiently.

The working time directive is immensely complicated and imposes burdensome record keeping on employers. In the past, it has resulted in retained firefighters in rural areas having to count the time when they sit at home, not doing anything, as working time. It has been a difficult and troublesome measure, and perhaps my party should have done more to simplify it when we were in office, but that is not an excuse for the Government to say, “Because you didn’t do enough, we intend to do nothing.” It is reasonable for us to ask the Government, at the end of 18 months, to take another look and see whether they can do anything to reduce the burden on businesses.

Justin Madders (Labour, Ellesmere Port and Bromborough)

I am beginning to wonder whether the Opposition’s support for the fair work agency is as strong as I thought. They now appear to want to make sure that creating it is the right thing do, despite its featuring regularly in Conservative manifestos and despite the support of the breadth of stakeholders who gave evidence to the Committee. The current Director of Labour Market Enforcement made it clear in her evidence to the Committee that the creation of the fair work agency would make her role much easier and more effective. She spoke about the recommendations in her most recent report:

“The ones that relate to having a better joined-up approach, to greater efficiency and to better sharing of information among bodies are the things that I think the fair work agency will do a lot better.” ––[Official Report, Employment Rights Public Bill Committee, 28 November 2024; c. 153, Q159.]

I think that almost half of the recommendations from her most recent report contained an element of that.

On Parkinson’s law, which the hon. Member for Bridgwater referred to, I am not sure whether that is actually an Act of Parliament; I suspect it is not. But it is fair to say that, while we are consolidating existing bodies—there are no specific plans at this stage to increase the workforce—we know from the evidence that this Committee received that there are still huge issues with payment of the minimum wage. Some 20% of workers on the wage floor reported that they were receiving less than the minimum wage; 900,000 workers reported that they had no paid holiday; and 1.8 million people do not receive payslips. There are huge gaps in enforcement at the moment, which is one of the reasons why the fair work agency is needed.

While the shadow Minister might want to seek reassurance that setting up the new body is the right thing to do, we believe that the issue has actually been pretty settled between both the main parties for a long time that it is the right thing to do. Requiring a report within 18 months—before the fair work agency can actually be set up—is simply going to delay that work by 18 months. He has also added into the amendment the Health and Safety Executive, which will not actually be part of the fair work agency, so that, again, would create some complications.

However, I assure the shadow Minister that there will be a regular review of the fair work agency’s performance. I did start to stray into clause 75 in my earlier speech, and I did that, Mr Mundell, because that clause actually deals with the requirements for the agency to provide an annual report and enforcement strategy, which will be our way of measuring the effectiveness of the fair work agency.

I understand that the shadow Minister wants reassurance that this is the right thing to do, but I suggest that there is more than enough evidence already that it is; his amendment will simply delay our arrival the destination that I thought we had all agreed was the right one. I ask him not to press the amendment.

David Mundell (Conservative, Dumfriesshire, Clydesdale and Tweeddale)

For clarity, the question on new clause 23 will be put at a subsequent point in the proceedings.

Clause 73 - Enforcement functions of Secretary of State

David Mundell (Conservative, Dumfriesshire, Clydesdale and Tweeddale)

With this it will be convenient to discuss clause 74 stand part.

Justin Madders (Labour, Ellesmere Port and Bromborough)

Clause 73 specifies which functions are considered enforcement functions of the Secretary of State for the purposes of part 5 of the Bill. It defines enforcement functions widely and then carves out certain functions that are not enforcement functions.

Clause 73(1) specifies that the enforcement functions of the Secretary of State include the following: any functions granted under part 5 of the Bill; functions in the relevant labour market legislation that they are responsible for enforcing; and any other functions that they perform to support enforcing labour market legislation.

Clause 73(2) goes on to set out exceptions. It lists specific functions that are not enforcement functions for the purposes of part 5 of the Bill. These are generally functions that relate to the arrangements for state enforcement of labour market legislation, and the overall governance of the fair work agency. These overarching governance functions include: appointing officers under clause 72; delegating functions under clause 74; setting up the advisory board under clause 75; publishing the annual reports and enforcement strategies under clauses 76 and 77; providing for transfer schemes to move staff into the Department under part 1 of schedule 7; and powers to make subordinate legislation.

The effect of clause 73 becomes clear when it is read in conjunction with clause 72. First, the enforcement functions that are listed in clause 73(1) can be performed by enforcement officers appointed under clause 72. Under clause 72(4), the powers of an enforcement officer include the power to exercise any enforcement function. Those powers can be limited further by the terms of the appointment of those officers.

Clause 74 gives the Secretary of State flexibility about how they carry out the functions of labour market enforcement. It provides the option to delegate functions to another public authority. Clause 74(1) gives the Secretary of State the power to make arrangements with the public authority so that it can exercise the delegable function. It also enables the Secretary of State to make arrangements to appoint a public authority’s staff as enforcement officers. The Secretary of State can delegate the enforcement functions listed in clause 73(1), all of which have been highlighted already. Those functions relate to arrangements for state enforcement of labour market legislation or the overall governance of the fair work agency. The Secretary State can also delegate powers relating to the licensing of gangmasters under sections 7 or 11 of the Gangmasters (Licensing) Act 2004. The arrangements the Secretary of State makes with public authorities can also include an agreement to make payments in respect of the performance of any function by either the public authority or their staff.

Clause 74(5) means that delegating an enforcement function does not strip the Secretary of State of responsibility or control in enforcing labour market legislation. The Secretary of State can still carry out functions even when they have arranged for another public authority to do that on their behalf.

The Bill is about bringing enforcement and employment legislation into one place in order to make enforcement more effective and efficient by ensuring the better use of resources. It is about creating the right powers to carry out investigations and take enforcement action where necessary. However, it does not set out a specific approach to implementing that more joined-up enforcement, because operational flexibility will be the key to the success of the fair work agency. The clause helps to provide that flexibility by enabling the Secretary of State to delegate certain functions to other public authorities or to make arrangements for staff of other bodies to be appointed as enforcement officers. Both clauses are integral to the effective functioning of the fair work agency in the future.

Greg Smith (Conservative, Mid Buckinghamshire)

On the face of it, the clauses are not problematic: they are quite clear, and it is important that those things that are considered as enforcement functions are clearly defined. That is all well and good—until we get to clause 74(5), which states:

“Arrangements under this section do not prevent the Secretary of State from performing a function to which the arrangements relate.”

Therefore, a body with certain powers—admittedly in the Secretary of State’s name—is created; essentially, a quango is put in place, and people are given the clear job of carrying out the enforcement functions in the Bill. However, if the Secretary of State is not prevented from performing one of those functions, what is the mechanism by which they can overrule the quango they themselves set up to perform them? Of course, the ultimate buck must stop with the Secretary of State, but it is a pretty established convention that where a quango is set up and has powers delegated to it—I think of Natural England within the Department for Environment, Food and Rural Affairs and many other quangos—it is very rare for a Secretary of State to intervene, overrule and perhaps come to a different conclusion from that quango.

We will not oppose the clauses, but I would be grateful if the Minister could reflect on the circumstances in which he believes clause 74(5) would come into effect, to make clear the procedures a Secretary of State would need to follow to bring that subsection into effect.

Steve Darling (Liberal Democrat, Torbay)

I broadly welcome the proposals in the clauses, and I look forward to the Minister’s explanation of the issues outlined by the shadow Minister.

Justin Madders (Labour, Ellesmere Port and Bromborough)

I hear what the shadow Minister says. He is possibly over-egging the pudding or taking us on a ride on the ghost train in terms of what clause 74(5) means. It simply means that if the Secretary of State delegates powers to another body, they are still the responsible person for the overall operation. This is not about overruling different bodies; it is about where the final responsibility lies. I hope I have put the hon. Gentleman’s mind at rest to some extent.

Clause 75 - Advisory Board

Justin Madders (Labour, Ellesmere Port and Bromborough)

I know you have been eagerly awaiting this clause, Mr Mundell. It concerns an important part of the fair work agency, and something that the Liberal Democrat spokesperson touched on earlier. The agency has a big job on its hands to restore trust among workers that they will get the rights that they are entitled to and that Parliament has laid down. It also important that the agency is trusted by businesses, and that they know they will be treated fairly and that if they follow the law, they will not be undercut by those who seek to avoid it. That is an important job for the fair work agency and it is important that we get it right. It must reflect the concerns of businesses and workers.

The Low Pay Commission has served the country well since the last Labour Government created it to advise on the national minimum wage. That is because it is a social partnership, comprising equal voices of workers, businesses and independent experts, and can reflect the perspectives of all those bodies when making recommendations. We want the FWA to replicate that success.

The clause requires the Secretary of State to create an advisory board for the fair work agency. Subsection (2) specifies that the board must consist of at least nine members appointed by the Secretary of State. Subsection (3) provides that board members must hold and vacate their position in accordance with the terms and conditions of their appointment. Subsection (4) provides for the advisory board to have a social partnership model, requiring equal representation of businesses, trade unions and independent experts.

We know this is a complex area that is constantly changing, but we believe that the model and approach that has proved so successful with the Low Pay Commission should be replicated here. I therefore commend the clause to the Committee.

Greg Smith (Conservative, Mid Buckinghamshire)

I hear what the Minister says in his explanation of the clause. Often, advisory boards are perfectly good and useful bodies, but I return to my earlier point that where a power rests with a Secretary of State, the accountable body to which any Secretary of State must submit themselves is the House of Commons, where they are a Member, or the House of Lords, in the rare case that they sit in the other place. Parliament is the advisory body—the critical friend—that the Secretary of State should submit themselves to.

However, accepting that an advisory board is going to be established, I want to ask the Minister about its make-up. While the Bill seems to be quite clear, there are some gaps, and some unanswered questions that the public, businesses, employees and the trade union movement will no doubt wish to have answered.

Probably the clearest definition in clause 75(4) is that in paragraph (a):

“persons appearing to the Secretary of State to represent the interests of trade unions”.

I think we can all understand that that means representatives of the trade union movement.

Ashley Fox (Conservative, Bridgwater)

There are 10 of them over there.

Greg Smith (Conservative, Mid Buckinghamshire)

There is my first question, prompted by my hon. Friend: does that include right hon. and hon. Members of Parliament who themselves are members of trade unions? Could that be the case?

We are less clear on paragraphs (b) and (c). Paragraph (b) states:

“persons appearing to the Secretary of State to represent the interests of employers”.

That is a far less easily defined body of people. On the one hand, I can hear some potentially arguing that that is the representative bodies that gave evidence to the Committee, such as the Confederation of British Industry and the Institute of Directors. That would be a legitimate answer, until somebody came forward and made a compelling case that, as an individual employer, they should be considered to sit on the board.

While I have utmost respect for all the umbrella bodies and representative bodies that seek to represent British business interests and the many employers of all different sizes around our country, the evidence we heard demonstrated that sometimes the representative bodies say something a little bit different from what individual employers say. The gentleman from GAIL’s gave us some powerful and compelling evidence. Will the Minister make it clear which individuals he envisages will sit on the advisory board to represent the interests of employers? Will they come from the representative bodies or individual employers? Will the Government put in place some other test to identify those individuals?

Paragraph (c) is even more opaque. It concerns

“persons appearing to the Secretary of State to be independent experts.”

For a starter for 10, I would argue that the word “independent” will need to do a lot of heavy lifting. For example—

Michael Wheeler (Labour, Worsley and Eccles)

Will the shadow Minister give way?

Greg Smith (Conservative, Mid Buckinghamshire)

I will be delighted to in one second, when I have finished my train of thought.

Can someone be classed as independent if they are an academic or a university professor, perhaps with considerable knowledge of and expertise in employment law and matters relating to the Bill—someone we should all respect—but also a member of a trade union? Does their membership of a trade union count towards whether they are independent? Would that be at odds with paragraph (a)?

Michael Wheeler (Labour, Worsley and Eccles)

I apologise for interrupting the egging of the pudding—we were definitely in the “over” area of the egging. Does the shadow Minister accept that despite what we have heard, and despite the picture that he is trying to create, this model works? It is not novel; we have the Low Pay Commission. It is an established fact. Despite the many layers and convolutions that we see being built in front of us, we are actually considering something quite straightforward here.

Greg Smith (Conservative, Mid Buckinghamshire)

I am grateful to the hon. Gentleman for his intervention and for what appears to be his support for the British egg industry. I encourage him to eat as many British eggs as possible and to support our farmers.

Justin Madders (Labour, Ellesmere Port and Bromborough)

Egg-cellent!

David Mundell (Conservative, Dumfriesshire, Clydesdale and Tweeddale)

We are not going down this route, thank you.

Greg Smith (Conservative, Mid Buckinghamshire)

I always bow to your advice, Mr Mundell. I will try to save the Minister the embarrassment of having that recorded in Hansard.

Let me try to return to my point. While I accept that advisory boards of Government Departments often follow this formula, we have a particular definitional problem with this one. The problem is whether, in the example I gave before the intervention of the hon. Member for Worsley and Eccles, the independence of a seemingly independent expert—most reasonable people would say a university academic, professor, doctor or whoever would normally fall into that category—would be influenced if they were a member of a trade union, and whether in that case their membership of the board would be compliant with the provision for an “equal number” of independent experts and those representing the trade union movement on the board.

This is an important problem for the Minister to acknowledge. He must be very clear to the Committee whether the word “independent” in paragraph (c) would disallow anyone who is a member of a trade union from being a member of the board under paragraph (c), for fear of contradicting paragraph (a).

Alex McIntyre (Labour, Gloucester)

I refer the Committee to my membership of the GMB and Community unions. The shadow Minister is keen for us all to stress our trade union membership, and we do so at the start of every sitting. He makes the point about trade union membership potentially impacting independent experts, but he will be aware that many university professors are funded by private limited companies to support their research, just as some Opposition Members are supported by private limited companies and employers for campaign purposes, none of which is declared in this Committee. Would he not say that might impact those professors’ independence too? Would that not need to be declared to ensure that the numbers are balanced?

Greg Smith (Conservative, Mid Buckinghamshire)

I understand the hon. Gentleman’s point. I believe in freedom; I have no problem with any hon. or right hon. Government Member being a member of a trade union. The point here is clarity and transparency. We have a Bill in black and white in front of us that refers to equal numbers but fails to define whether a member of a trade union could sit as an independent expert or would have to be categorised under subsection (4)(a) as representing the interests of trade unions. This is a matter of information on which the Committee and the general public deserve to have clarity before we allow this clause to become part of primary legislation in our country. As in all walks of life, there will be points of debate on that. I want to hear from the Minister’s own mouth whether he deems it to contradict the “equal number” provision. We could dance on the head of a pin all day, but when we are seeking to pass legislation, clarity is very important, and I look to the Minister to give it.

Steve Darling (Liberal Democrat, Torbay)

I am concerned about the heavy weather that colleagues on the Opposition Benches are making of this. For me, this measure is about driving a positive culture in employment, and the board’s balance is entirely appropriate. I welcome the clause.

Ashley Fox (Conservative, Bridgwater)

I have a number of concerns about the establishment of the advisory board for the enforcement of labour market rules. I do not believe that such an advisory board is necessary and I am convinced that its creation would represent an expensive and bureaucratic exercise that would be redundant at best and a tool to disguise the Government’s intentions behind a veil of unnecessary consultation at worst. Let me explain why.

Let us first address the central issue: the need for advice. It is not as if there is a shortage of expert opinions on labour market matters; far from it. If the Secretary of State is seeking guidance from trade unions, he need look no further than the extensive and loud representation of trade union interests on the Benches behind him. There seems to be no shortage of trade union representatives in key positions, be it MPs with close ties to the unions or those with—

Michael Wheeler (Labour, Worsley and Eccles)

Does the hon. Member accept that there is a difference between “member of” and “represents” when it comes to trade unions?

Ashley Fox (Conservative, Bridgwater)

Yes, I do. Indeed, “funded by” trade unions is another distinction. The point I am making is that this advice is available for free. There is no need for the Secretary of State to commission a board and pay representatives of trade unions to give him advice. The notion that three members of trade unions are needed on the advisory board seems, to put it bluntly, quite redundant. The Secretary of State can obtain that advice from any number of trade unions, their experts, or any of the MPs that sit on the Government Benches, who will all freely give it. Let us not forget that there are already plenty of independent experts contributing to various public bodies and providing high-level advice to the Government—there is certainly no shortage of them dotted throughout Whitehall.

If the Government require business perspectives, they certainly need not search too far for that advice either. If they wanted to, they could listen to the CBI or, if they preferred, to the Federation of Small Businesses, which provide ample insights and recommendations on policy matters relating to labour and employment. Those bodies represent businesses large and small, and have extensive networks of experts available to advise on any issues regarding the labour market. The problem—I suspect the Federation of Small Businesses would agree—is that the Secretary of State does not listen to them, so what difference would it make if he were to put one of them on a board of nine or 12? Do we need more voices from the same sectors giving advice?

Who might we see the Secretary of State appoint to this board? I am sure Sir Brendan Barber would get a look in, or perhaps Baroness Frances O’Grady. I wonder what Len McCluskey is up to these days—I am sure he has vast experience in employment rights matters.

David Mundell (Conservative, Dumfriesshire, Clydesdale and Tweeddale)

Mr McCluskey is now a constituent of mine.

Ashley Fox (Conservative, Bridgwater)

Mr Mundell, you are as fortunate as Mr McCluskey.

I am sure that those are just the independent experts that the Secretary of State will be considering appointing to this board. This highlights another crucial point: the Government designation of independent experts is incredibly vague. The Government define “independent expert” as anyone who is neither a trade union representative nor an employer representative. There is no requirement in the Bill for someone to have any particular expertise; they just must not fall into one of those two categories. Nowhere does it say that that expert cannot be a member of a trade union; nowhere does it say that they cannot be a former leader of a trade union; nowhere does it detail what qualifications or experience these experts are expected to bring. Let us not forget that these experts will be paid substantial sums of money—potentially hundreds of pounds per day—and the Government want us to take it on trust that they will be appointing the best people for the job.

As is often the case with such bodies, it is not a risk, but a total certainty that the advisory board will be appointed disproportionately to represent one end of the political spectrum. I suspect the Government will make every effort to ensure that those appointed align with the views they already hold—or, if we have a board of nine, that at least eight of them are firmly in the camp of the Labour party. The most likely outcome in my view is that this board will be packed with individuals whose perspectives on labour markets are perfectly aligned with Government policy and with the trade unions that this Government represent. It might be more straightforward for the Government simply to ask the TUC for instructions on how to go ahead, rather than to go through this cumbersome and expensive process. It would certainly cost the taxpayer less, and I would argue it would be more honest too. The fact is that this board’s purpose seems more to provide a cover for a Government agenda that is already in place than to genuinely provide diverse input. It looks like an expensive way to present the façade of consultation without delivering anything meaningful at all.

If the idea of this surplus of readily available advice was not bad enough, we have not started to talk about the cost of setting up this quango and the board. Having served on two public bodies, I know that advisory bodies are expensive and time-consuming ventures that require significant administrative resources in terms of staff, time and finance. Not only do the members of those bodies need to be compensated—perhaps the Minister will advise us whether they will be paid £300 a day, or £400 or £500 a day—but there is also the cost of setting up the selection process, conducting interviews and managing the day-to-day operation of the body. We are talking about at least nine members being appointed—probably more—which will consume considerable amounts of civil service time and taxpayers’ money. The selection process alone will involve a long list of procedures: advertising positions, longlisting, shortlisting, interviewing, and ultimately appointing the individuals—all, inevitably, to end up with the appointment of the nine people that the Secretary of State wanted to appoint in the first place.

What will this board ultimately do? It will advise the Secretary of State on drafting a strategy. We all know how these things go: the result will be a glossy document full of attractive photographs, distributed widely to people who will never read it, and it will have little or no practical impact on the ground. It will be yet more time and money wasted by this Government. We do not need more reports or strategies; we do not need an advisory board. Labour market rules are already there and they need to be enforced. The person responsible politically is the Secretary of State. He should take responsibility for the political decisions he makes in enforcing those laws, and not hide behind an advisory body.

Christopher Chope (Conservative, Christchurch)

I have some good news to share. The Clerks reported on Tuesday that we needed to replace two bulbs so that the Hansard reporters could see more clearly. At least one of them has now been replaced. I think they are looking for a second pair of ladders for the second one. It is important to keep abreast of productivity in this place.

Laurence Turner (Labour, Birmingham Northfield)

It is a pleasure to serve under your chairship, Sir Christopher. I am sure that the whole Committee is grateful for that illuminating update. I will keep my comments brief.

The words that we have talked about at great length—“appearing to the Secretary of State to represent” employees, workers or employers—are a standard form of language that has appeared in industrial relations legislation, and indeed non-industrial relations legislation, since the 1960s at least. Similarly, the wording about an “independent expert” unsurprisingly follows a Whitehall pro forma. Very similar language appears in the Levelling-up and Regeneration Act 2023, so its inclusion should not be a matter of contention for the Committee.

Justin Madders (Labour, Ellesmere Port and Bromborough)

It is a pleasure to see you in the Chair, Sir Christopher. As always, I will start by referring to my entry in the Register of Members’ Financial Interests. Following the reference to illumination, I hope to shed light on the advantages of a fair work agency.

We have heard a fair amount of criticism from the Opposition Benches about the suggestion that we set up an advisory board. The shadow Minister asked whether a Member of Parliament could apply to be on it. I do not think that it is entirely clear whether they could. I do not know whether the prohibitions on second jobs for MPs have that scenario in mind, but I imagine that it could fall within the prohibition relating to advising on areas of policy. I also hope that all Members are fully engaged in their day-to-day work of representing their constituents and will not feel it necessary to apply. Indeed, we will play a role here in scrutinising the work of the fair work agency. Given the comments of the hon. Member for Bridgwater, he will not be making an application, in any event.

On the point that academics could also be members of a trade union and could therefore fit into more than one category, anyone in a free society is entitled to join a trade union should they wish to do so. We would not want to make it a condition for job applicants to have to state their trade union membership—that is a slightly McCarthyist road to go down—but members of the Low Pay Commission are already required to declare any interests, including membership of trade unions or political parties. There is an opportunity for transparency in that sense.

As my hon. Friend the Member for Birmingham Northfield says, the pro forma definitions in the Bill are not novel interpretations. They are tried and tested definitions—I would like to say “trusted” as well, but it is clear that the hon. Member for Bridgwater does not trust us to operate them in the way they have operated in the past—of how people are appointed to such bodies. As has been noted, they have worked successfully for the Low Pay Commission for a quarter of a century.

The shadow Minister was accused of over-egging the pudding, but the hon. Member for Bridgwater broke enough eggs in his criticisms to feed us all for the next month. I think he suggested that we did not need an advisory board at all, which suggests that he does not believe it important that the voice of business have input into the work of the fair work agency. He also said that we did not need more reports, which is one of the roles of the advisory board, and yet only a couple of hours ago he voted for a report into the application of the fair work agency. What he was getting at is that if we have to have this, we need to be assured that there is no jiggery-pokery about who will be appointed to it.

Ashley Fox (Conservative, Bridgwater)

It is good to see you in the Chair, Sir Christopher. The point I was aiming to make is that there is no shortage of free advice from trade unions, employers and independent experts, so there is no need to set up a board to pay people to give advice that is freely available. The Secretary of State should simply take political responsibility for the choices he makes, rather than having advice collected together by a board and passed back to him.

Justin Madders (Labour, Ellesmere Port and Bromborough)

I understand the hon. Gentleman’s point, but this is about how we intend to deal with industrial relations and the workplace in future—the tripartite arrangement, where we get everyone in the room, so they can agree or put different points of view. As has been demonstrated successfully by the Low Pay Commission, that results in the right balance, which is good for the economy and good for workers. It results in settlements that everyone can agree with.

Peter Bedford (Conservative, Mid Leicestershire)

It is good to see you in the Chair, Sir Christopher. To follow up on the point that my hon. Friend the Member for Bridgwater makes about the advisory board, what is the Minister’s view of ministerial accountability? Will there be transparency on the board’s recommendations and on being held to account for decisions? Over the past several years, Governments of all colours—Conservative, coalition and Labour—have tended to create boards, advisory panels and so forth and have felt obliged to follow the advice that they give. They almost want to derogate from their responsibility. What is the Minister’s view of the advice given by the board? Does he believe that robust ministerial responsibility should still exist, so the Minister could, or should, take decisions that are against the board’s advice? I guess I am asking what the transparency is on the board’s advice to the Minister.

Justin Madders (Labour, Ellesmere Port and Bromborough)

That is a perfectly reasonable question. It is dealt with in the clauses, which we are about to debate and which address the requirement for the board to set out an annual report and strategy. That will inform the Secretary of State of the direction of travel of the fair work agency. Again, this is not an unusual arrangement. If we believe, as we do on the Government Benches, that the fair work agency needs an advisory body—I cannot recall any person or organisation who submitted evidence to the Committee suggesting that that was not an appropriate idea—the logical conclusion of what the hon. Member for Bridgwater suggests is that the Bill should name every single person on it. That is not a practical way to proceed.

I suggest that a huge mountain has been made out of a small molehill. This is an established practice that has worked well and has been seen to work well, and it has support from many stakeholders. It is entirely in line with what we seek to achieve.

Clause 76 - Labour market enforcement strategy

Christopher Chope (Conservative, Christchurch)

With this it will be convenient to discuss clause 77 stand part.

Justin Madders (Labour, Ellesmere Port and Bromborough)

Clause 76 will require the Secretary of State to prepare and publish a labour market enforcement strategy every three years, which should give an assessment of levels of non-compliance with labour market legislation, as well as what activity is undertaken to address that. Subsection (4) will require the Secretary of State to consult the fair work agency’s advisory board when preparing or revising the enforcement strategy, to benefit from its expertise. Subsection (5) will require the strategy to be laid before Parliament, allowing parliamentary scrutiny in the usual manner. A labour market enforcement strategy is a critical tool to maintain accountability and focus on enforcing labour market legislation. It can help to tackle workplace exploitation by prioritising enforcement in sectors in which workers are at higher risk.

Clause 77 sets out the requirement for the Secretary of State to prepare and publish an annual report about the enforcement of labour market legislation. Subsection (3) will require the Secretary of State to consult the fair work agency’s advisory board when preparing the annual report, to benefit from its expertise. Subsection (4) will require the annual report to be laid before Parliament, allowing parliamentary scrutiny in the usual manner. Clause 77 will promote accountability by requiring an annual report on the fair work agency’s enforcement actions and will allow Parliament to monitor progress in protecting workers’ rights. It will ensure that employment standards are not just set, but actively maintained across the UK. I commend the clauses to the Committee.

Greg Smith (Conservative, Mid Buckinghamshire)

It is good to see you in the Chair, Sir Christopher. Clauses 76 and 77 are relatively straightforward. Quite rightly, as is standard in similar legislative provisions, they state explicitly that both the strategy, every three years or so, and the annual report, every year, should be laid before Parliament. That is welcome: it is standard and is in no way under question.

If the Minister is agreeable to it, I would like him to confirm that Members of both Houses will be given the chance to question and debate the documents—certainly the strategy, which is an important document on a longer timescale—rather than their just being laid before the House. Although it would be unusual to specify that in the Bill, will he confirm that when the first strategy is published under clause 76 or the first annual report is published under clause 77, his expectation is that Ministers will be willing to make an oral statement so that the House can properly question it and scrutinise the Secretary of State, or whichever Minister draws the short straw and presents it to the House?

When documents are simply laid before the House, sometimes these things get overlooked. Select Committees sometimes have too much work in their programme to squeeze in a scrutiny session around the publication of such documents; sometimes the House of Commons sees only a written statement. It would be sufficient if the Minister confirmed that his desire is to see these documents not simply laid before Parliament, but actively debated, at least through the means of an oral statement.

Steve Darling (Liberal Democrat, Torbay)

It is a pleasure to serve under your chairmanship, Sir Christopher. On behalf of my residents in Torbay, whether they are employers or workers, a strategy to know how the Government are looking to drive this agenda forward can only be welcomed.

Justin Madders (Labour, Ellesmere Port and Bromborough)

I think there is broad support for these clauses. The shadow Minister requests that I commit to an oral statement, but he will be aware that I am not in control of the business of the House. I hope that we would want to ensure that all Members have the opportunity to ask questions, but he will know that a number of other mechanisms—sorry, I am sounding a bit like the Leader of the House now—are available to Members to ensure that particular matters are debated.

Greg Smith (Conservative, Mid Buckinghamshire)

I am enjoying the Minister’s audition to be Leader of the House of Commons, a role that I am certain he would do exceptionally well. As I am sure he well understands, although the business of the House is for the business managers and the Leader of the House to negotiate through the usual channels, all I am really asking of him is an in-principle commitment to offer an oral statement at the Dispatch Box. Whether it gets approved or selected by the usual channels is a different matter. An indication of the intent of the Minister and the Department for Business and Trade to offer an oral statement so that these strategies and annual reports can be scrutinised across the House would be important and welcome.

Justin Madders (Labour, Ellesmere Port and Bromborough)

I thank the shadow Minister for destroying any career prospects that I might have had. I certainly believe that the first publication would be of sufficient magnitude for an oral statement to the House. As a Minister I would certainly want to give such a statement, although whether it happens is outside my gift, as the shadow Minister knows. As we do not know when it will happen, or indeed whether either of us will be in the same role by that point, I can probably say no more. Perhaps I will be doing something else, or nothing at all. Who knows? I certainly think that the first publication of the strategy would warrant an oral statement, but for the reasons that I have outlined, I cannot make a cast-iron promise.

Clause 78 - Power to obtain documents or information

Justin Madders (Labour, Ellesmere Port and Bromborough)

I beg to move amendment 86, in clause 78, page 83, line 6, leave out “to ascertain” and insert “the purpose of ascertaining”.

This amendment makes a minor drafting correction.

Christopher Chope (Conservative, Christchurch)

With this it will be convenient to discuss Government amendment 90.

Justin Madders (Labour, Ellesmere Port and Bromborough)

Clause 78 will confer a power on the Secretary of State—although in practice it will be delegated to enforcement officers—to require a person to provide documents or information relevant to an investigation. This is a vital power, and a common power for enforcement agencies to have. It is right that its use be clearly defined. Clause 78(3) defines “enforcement purpose” in relation to the power; Government amendment 86 will make a small drafting correction so that the definition is consistently drafted. This is a technical change, but one that will make sure that this key power is easy to interpret and understand.

Government amendment 90 similarly clarifies the definition of “enforcement purpose”, in this case for the powers of entry in clause 79. As drafted, the Bill has identical definitions of enforcement purposes in clauses 78 and 79, with clause 79 relying on the definition in clause 78. However, these are different powers and the wording on enforcement purposes in clause 78 does not neatly match the provisions of clause 79. It is right that the wording of the definition of “enforcement purpose” in clause 79 should better reflect what the clause says. This amendment therefore clarifies the definition to tailor it to powers of entry. This is, again, a technical change, but one that will make sure that this key power is easy to interpret and understand. I commend the amendments to the Committee.

Greg Smith (Conservative, Mid Buckinghamshire)

Government amendments 86 and 90, as the Minister says, will clarify the purposes for which the power conferred by clause 79 to enter premises and inspect documents may be exercised, with a number of conditions. I would be grateful if he clarified whether a warrant will be required to enter business premises and exercise the powers in clause 79. If not, why not? It is a pretty broad power for enforcement officers that they can enter premises for

“the purpose of enabling the Secretary of State to determine whether to exercise any enforcement function”.

I would be grateful if the Minister provided some practical examples of what that means. It seems a pretty broad power to be able to go in simply to see whether there is anything to look at; it seems at odds with statutory precedent.

Amendment 88 is a minor drafting correction. I will not rehearse the usual arguments.

Justin Madders (Labour, Ellesmere Port and Bromborough)

The shadow Minister asks about the requirement for a warrant. The Committee will shortly come on to a clause that deals with that point. I believe that the purposes for which the power is to be used are also set out elsewhere in the Bill.

Justin Madders (Labour, Ellesmere Port and Bromborough)

Improving the enforcement of workers’ rights is important and depends on access to the right information. Clause 78 introduces a power to obtain documents and information. The power will be conferred on the Secretary of State, but in practice it is a function that Secretary of State will delegate to enforcement officers.

Creating the fair work agency involves bringing together different agencies with different information-gathering powers. Multiple overlapping powers would be confusing and slow down enforcement. The powers of some current enforcement bodies have not kept pace with the times. For example, the employment agency standards inspectorate’s powers are activated only when they enter a premises. That makes no sense in today’s business world where many businesses are operated online and remotely, and documents are stored electronically. It is high time that we brought the legislation into the 21st century.

Clause 78 gives enforcement officers the power to require a person to provide documents and information relevant to an investigation. The person will receive a notice from the officer to provide the relevant documents or information that the officer deems necessary for their purpose. This is a common power for enforcement agencies to have, and it synthesizes and updates the powers that existing enforcement bodies already have.

Greg Smith (Conservative, Mid Buckinghamshire)

I broadly accept the Minister’s argument on bringing legislation into the 21st century, and it would be foolish not to acknowledge changes in the way that documents are stored or the fact that certain businesses operate online in a way that they simply did not when the existing legislation was passed. We do not seek to object to that element.

When expanding any power of any enforcement officer under the state, however, there is always a concern to best ensure that the checks and balances that any reasonable person would expect are there. The Bill will undoubtedly become an Act, so I gently ask the Minister how, when these powers are delegated by the current or any future Secretary of State to the enforcement body, the practical application of the use of those powers—particularly those that are a step into the unknown regarding online and electronic document storage—will be assessed and reviewed to check that the right delegations are in place, and that there is no overstretch or unnecessary steps to demand documents that may not be required.

We can all imagine a situation in which, because documents are held in electronic form, some enforcement officers might desire to be over-zealous and ask for far more than they need. I do not see a safeguard to ensure that enforcement officers ask only for things that they categorically and absolutely need within the function of the duties that this or any future Secretary of State delegates to them.

Steve Darling (Liberal Democrat, Torbay)

It is important that we hear from the Minister about getting the balance right and supporting people’s rights, while not being too invasive to businesses. I look forward to hearing from him.

Justin Madders (Labour, Ellesmere Port and Bromborough)

Fair points were made by the Opposition spokespeople. Clearly, the Secretary of State is ultimately responsible to Parliament for the operation of the fair work agency and the use of powers by enforcement officers. I expect that will ensure that there is oversight at least on a parliamentary level. On an operational level, there will also be an opportunity for the advisory body to be involved.

On the modernisation of the rules, I understand that that applies only to the employment agency standards inspectorate, because the other bodies already have those powers. It is not a dramatic extension of the existing powers that are already in place.

Clause 79 - Power to enter business premises in order to obtain documents, etc

Justin Madders (Labour, Ellesmere Port and Bromborough)

I beg to move amendment 87, in clause 79, page 83, line 11, leave out “business”.

The effect of this amendment and amendment 89 is that the power in clause 79 may be exercised to enter any premises, including premises used as a dwelling, for the purposes of inspecting or examining documents on the premises, etc. However, NC8 provides that, in the case of a dwelling, the power is not exercisable without a warrant.

Christopher Chope (Conservative, Christchurch)

With this it will be convenient to discuss the following:

Government amendments 88, 89, 91, 94 and 96.

Justin Madders (Labour, Ellesmere Port and Bromborough)

I will speak first to amendments 87 to 89 and new clause 8, which are necessary because they represent a vital step forward in ensuring effective enforcement while respecting fundamental rights. Clause 79 enables enforcement officers to enter business premises to carry out inspections. This is a fundamental and necessary clause for the fair work agency to operate. A workplace inspectorate that could not inspect workplaces would not be of much use.

Clause 79 as initially drafted excluded dwellings from that power of entry but, as hon. Members will be aware, a significant number of businesses are now run from private dwellings, particularly within the gig economy and online marketplaces. These amendments therefore expand the scope of the power to cover dwellings that are used as business premises, but it is right that we introduce adequate safeguards for this power, because it in effect allows an arm of the state to enter family homes and disrupt private life. Therefore, there will be a requirement for enforcement officers to obtain a warrant from a justice before entering a dwelling.

We believe this approach strikes a balance between ensuring robust enforcement of labour market legislation and modernising the law to include best practice safeguards. Without this amendment, enforcement efforts would be hampered. Many violations occur in business premises that double as private dwellings. By granting access through a warrant-based system, enforcement officers can efficiently investigate breaches without undermining public trust. The proposed safeguards mirror those in other enforcement frameworks, ensuring consistency and fairness.

This amendment is a necessary evolution of enforcement powers. It ensures that enforcement officers can effectively combat labour market abuses wherever they occur, while upholding and protecting the rights of individuals by ensuring that safeguards are in place.

I now move to amendments 91, 94 and 96, new clause 9 and new schedule 1. The fair work agency is all about simplification, replacing multiple, complex approaches to enforcement with a single, simple system that—unlike this amendment grouping—is easy for employers and workers to understand. These amendments do precisely that by introducing a single process for obtaining warrants across the two powers that require them.

The detailed safeguards included in the new schedule reinforce the transparency, legality and proportionality of these powers, which is vital for public trust in enforcement processes. The amendments also improve the clarity and coherence of the Bill, making it easier to implement and understand. Together, these measures strengthen the Bill, ensuring that robust enforcement mechanisms are paired with the necessary protections for individuals and premises, and I commend them to the Committee.

Greg Smith (Conservative, Mid Buckinghamshire)

This is a bumper grouping—amendments, new clauses and even a new schedule. I will start with new clause 8, which provides that an enforcement officer may not exercise the power conferred by clause 79, to enter a business premises for any enforcement purpose, to enter premises that are a dwelling without first obtaining a warrant. As in previous debates in this Committee about dwellings, the official Opposition agree that obtaining a warrant first should be necessary, so we are fine with that.

New clause 9 makes further provision about warrants under part 5 and enables warrants that authorise people to accompany the enforcement officer executing the warrant. It also provides that entry under warrant is unlawful unless it complies with the provisions in new schedule 1 relating to the execution of warrants, which equally seems sensible. The new clause also provides that those persons who are authorised to accompany the enforcement officer can exercise the same powers that the officer may exercise as a result of the warrant. Off the back of that quite niche point, could the Minister explain who the Government envisage accompanying the enforcement officer under those powers—for example, a warranted police officer? Who does the Minister envisage being part of that process?

New schedule 1 makes further provision about applications for the execution of warrants under part 5. Warrants must be executed within three months of being granted. That is fairly standard, so the Opposition find that to be an uncontentious point.

Moving on to some of the amendments in this group, amendments 87 and 89 provide that the power in clause 79 may be exercised to enter any premises, including premises used as a dwelling, for the purposes of inspecting or examining documents on the premises. However, new clause 8 provides that in the case of a dwelling, the power is not exercisable without a warrant.

We agree that a warrant should be necessary to enter dwellings, so I wonder whether the Minister can reflect on the potential inconsistency that could be interpreted to exist between those two clauses. It may be a drafting error—it may well be unintentional—but to avoid any uncertainty and to avoid legal challenge down the road, it would help to get some clarity.

Amendments 88, 91, 94 and 96 are all consequential on new clauses 8 and 9 and new schedule 1, which causes me to return to the old chestnut—why those amendments were not included in the Bill on introduction. But the fundamental question on the group is, how frequently do the Government expect such powers to be used? An indication of that would give the Committee a much greater understanding of expectations on the use of the powers—whether the Minister considers that they might be used very occasionally, or whether they will form the backbone of the way that the body operates. That is not quite clear yet.

I appreciate that in real life, the proof of the pudding is in the eating and there is a lot of trial and error and seeing how things work in practice. As ever, though, I would expect the Department, through its own consultation, conversations and experience with those fragmented enforcement bodies as they exist at the moment, to have at the very least an expectation of how often the powers that are provided for in these amendments, new clauses and new schedule would be used.

Justin Madders (Labour, Ellesmere Port and Bromborough)

I am pleased that the shadow Minister recognises the need for these safeguards. As for who could accompany an enforcement officer, it would depend on the individual circumstances. It could be a police officer. It might be someone from social services. I had probably best write to the hon. Gentleman to set out in some more detail who that might apply to.

I am afraid that asking how often we expect the powers to be used is rather like asking, “how long is a piece of string?” I would say, though, that some of the recent reports from the labour market enforcement bodies, including even the Low Pay Commission, show that there are actually quite a lot of labour violations in domestic settings—far more than there might have been in the past. That trend may well continue into the future.

I did not quite follow the shadow Minister’s inconsistency point.

Greg Smith (Conservative, Mid Buckinghamshire)

I am grateful to the Minister, and I would be happy to follow this matter up in correspondence if we cannot make it clear in Committee. The point I was trying to make was that new schedule 1 makes provision for the execution of warrants under part 5 being granted, which is standard, but as we get into some of the detail, amendments 87 and 89 provide that the power in clause 79 may be exercised to enter any premises, including premises used as a dwelling, whereas new clause 8 provides that in the case of a dwelling, the power is not exercisable without a warrant. It seems to create potential for an extreme legal interpretation, to put those two at odds.

Therefore, if there is a drafting way that the two could be married up, so that it could be made clear that a warrant will always and categorically be required to enter a dwelling, that would be welcome. Perhaps it will be enough for the Minister to simply do so verbally in this Committee.

Justin Madders (Labour, Ellesmere Port and Bromborough)

I thank the hon. Gentleman for that intervention. Certainly that would be my understanding, but I will happily write to him to confirm that.

I now have some more examples of people who might accompany enforcement officers during a visit. I am told that it could be other enforcement officers; IT experts, as data might be stored on computers; or HMRC fraud investigators. As I have suggested, we will write to the hon. Gentleman with a detailed list so he has a better idea of what we are looking at.

Christopher Chope (Conservative, Christchurch)

With this it will be convenient to discuss the following:

Government amendments 177 to 182 and 205.

Ashley Fox (Conservative, Bridgwater)

On a point of order, Sir Christopher. It is my belief that you have not put Government amendments 91, 94 and 96 to the Committee.

Christopher Chope (Conservative, Christchurch)

The reason we have not done that is because we have not yet reached them. We have to do things in order. Government amendment 94, for example, is an amendment to clause 83, and we have not reached clause 83 yet. However, I am always very grateful for advice from hon. Members because nobody in this room is infallible.

Justin Madders (Labour, Ellesmere Port and Bromborough)

I am sure if we had a Division on that, there would be some interesting comments. It can be difficult to keep up, but your understanding of the current grouping, Sir Christopher, is as mine, which is always an encouraging start.

Turning to clause 79, all the existing employment rights enforcement bodies have powers to enter premises and inspect workplaces to gather information to inform their investigations, but each body’s powers are different and some of them are now very out of date. Clause 79 therefore introduces a single power to enter into any relevant premises to obtain information or documents.

The clause has been drafted with the aim of continuing the current approach to enforcement and compliance, so in general, an officer will agree a time for their visit with the employer in advance and arrange the visit at a reasonable time during business hours. However, it allows an officer to turn up unannounced if they have reasonable grounds to believe that an employer may frustrate entry.

The clause gives power to an officer to inspect or examine any documents on the premises. The officer may also require any person on the premises to produce documents that the officer has grounds to believe are on the premises and are within their control or possession. If the person cannot provide the necessary documents, they will be able to provide them to the officer at a later time and date. An officer can also have access to, and check the operation of, any computer or equipment, as such devices may store information that is necessary for the purposes of an investigation. The clause also allows the officer to seize any documents produced on the premises that may be necessary for the investigation.

To enter a dwelling, as we have discussed, an officer will have to obtain a warrant from a justice. That reasonable safeguard protects the rights of all individuals to family life whilst allowing agents to carry out all the vital work they need to protect the rights of workers.

New clause 49 will restrict the exercise of powers in clauses 78 and 79 in relation to the intelligence services, unless the Secretary of State is satisfied that using the powers would not be prejudicial to national security, the prevention and detection of serious crime and the economic wellbeing of the UK. The new clause requires the Secretary of State to issue a certificate of satisfaction before the powers can be exercised. Conditions on the exercise of either power may also be imposed if necessary. Subsection (5) also states that, other than as provided for in the clause,

“nothing in this Part requires any person to…produce”

or disclose any document or information “containing intelligence service information”.

Government amendment 182 is consequential on Government new clause 49. Clause 108, as introduced, sets out that the enforcement provisions in part 5 generally apply to Crown premises and the parliamentary estate. Clause 108(5) enables the Secretary of State to prevent powers of entry from being exercised in relation to Crown premises when that is deemed necessary for national security reasons. Government amendment 182 amends clause 181 to provide textual consistency and to ensure that new clause 49 functions as intended.

The amendments strike a balance to ensure that the fair work agency does not inadvertently act in a way that could be prejudicial to key national interests that the intelligence services work hard to protect, while also enabling those services to be investigated like other employers. This is vital to ensure that there is not a two-tier system of enforcement whereby some workers have less protection than others because of who their employer is.

I turn to Government amendment 181. Clause 101 imposes restrictions on the disclosure of intelligence service information, which is necessary to protect such information. It also defines “intelligence service information” for the purposes of that restriction. However, new clause 49 contains a slightly different definition, so Government amendment 181 amends that in clause 101 so that it is consistent with the definition in new clause 49(6)(c).

Government amendments 177 to 179 are technical amendments that are consequential on Government amendment 181. They make changes to the definition of “appropriate service chief” in clause 101(4). This is necessary as a result of the amendment to the definition of “intelligence service information” in clause 101 that is made by Government amendment 181. These technical amendments insert wording to clarify who the relevant service chief is in relation to information that has been received directly or indirectly from, or in relation to, each of the intelligence services. This addition is intended to capture information that may be obtained or held by third parties that relates to the intelligence services.

The amendments are part of a series of measures that are intended to balance the need to ensure that intelligence service information is protected, enabling the intelligence services to continue to do their important work, while also ensuring that the fair work agency can exercise relevant powers when necessary.

As we have already heard, part 5 of the Bill contains provisions that provide the building blocks that we will use to create the fair work agency. Several measures in the part, including some new clauses and amendments, are intended to specify how investigatory enforcement powers apply in relation to the intelligence services. They contain exemptions that are necessary to balance the protection of national security while ensuring that the fair work agency can still investigate when appropriate.

Clause 101 defines GCHQ and the intelligence services for clarity. If the amendments and new clauses are agreed to, those terms will be used more widely. The amendments are a technical change to ensure that the defined terms are repositioned to clause 112, which defines terms as they apply across part 5.

Greg Smith (Conservative, Mid Buckinghamshire)

I cannot remember, Sir Christopher, whether you were in the Chair when the Committee previously discussed exemptions for the intelligence services, but it seems that we now have a different approach to such exemptions in the amendments that the Minister has just spoken to. I guess it is “Never Say Never Again.”

Justin Madders (Labour, Ellesmere Port and Bromborough)

Ah!

Greg Smith (Conservative, Mid Buckinghamshire)

There was always going to be a point when we returned to that.

New clause 49 would restrict the Secretary of State’s ability to exercise enforcement powers in relation to people serving in the intelligence services, unless it has been certified that there was no risk to national security. It would also restrict their ability to require others to provide documents or information relating to the work of the intelligence services.

Amendment 181 amends the definition of “intelligence service information” so that it is consistent with new clause 49, and amendments 177 to 179 are consequential to that. Amendment 205 defines GCHQ and intelligence services for the purposes of part 5 of the Bill—all very sensible—and applies the powers in clauses 78 and 79 to the intelligence services. The Secretary of State must be satisfied that the exercise of the power will not be contrary to the public interest, or prejudicial to national security, the prevention or detection of serious crime, or the economic wellbeing of the United Kingdom.

I am genuinely grateful to the Minister and the Government that these exemptions for the intelligence services are included in the amendments and new clause—as I said a couple of moments ago, that represents a very sensible route—but I wonder why they seem to have been added as an afterthought. Did nobody in government consider the importance and the sensitivity of documents held within the intelligence services before the Bill was first presented to the House of Commons?

Justin Madders (Labour, Ellesmere Port and Bromborough)

The shadow Minister was quite right to refer back to our earlier debate on flexible working. Today, he certainly is the man with the golden pun, but this set of rules is slightly different: it still allows the intelligence services to be dealt with, whereas I think his proposal would have excluded the intelligence services altogether. The requirement is just that the Secretary of State is satisfied that the inspections and powers are necessary. Of course, when dealing with highly sensitive intelligence documents, we would want such safeguards, so I am pleased that he supports our measures.

Clause 80 - Supplementary powers in relation to documents

Christopher Chope (Conservative, Christchurch)

With this it will be convenient to discuss clause 81 stand part.

Justin Madders (Labour, Ellesmere Port and Bromborough)

The clause is a vital element of the fair work agency’s investigatory powers. It means that enforcement officers can copy documents and require that information is produced in a legible and readable format so that officers can take information away for analysis in slower time. The clause is necessary to ensure thorough inspection of the relevant information and documents for the purpose of the investigation, and it builds on powers that existing bodies have.

Clause 81 allows enforcement officers to retain any documents received under clause 78, or documents seized under clause 79, so that they have time to review documents properly to support their investigations and, if necessary, use those documents as evidence at trial. This reasonable and proportionate power is critical to allow the effective enforcement of employment rights. It is proportionate because if a photograph or a copy can be made of a document, that document is released back to the owner. I hope Members understand why the powers will be necessary so that the fair work agency can pursue its activities effectively.

Greg Smith (Conservative, Mid Buckinghamshire)

His Majesty’s loyal Opposition do not object to the thrust of the clauses, particularly the provision about not retaining a physical document if taking a photograph or making a copy of it is practicable. I do not want anyone to misinterpret what I am saying, but although I recognise the need for enforcement agencies to be able to acquire the evidence and documents they need to conclude their right and proper investigations, the question arises, how long may evidence be held by the enforcement agency, or indeed any part of the British state, particularly in cases in which a physical document has not been retained but a photograph or a copy has been taken of it? Clause 81 is pretty explicit about the retention of physical documents, but it is less clear on how long a copy or a photograph may be held by any arm of the state. I look for reassurance from the Minister that the rules will apply to copies as much as to the original documents seized, taken or willingly given to the enforcement officers.

Steve Darling (Liberal Democrat, Torbay)

I broadly welcome the way forward proposed in these clauses.

Justin Madders (Labour, Ellesmere Port and Bromborough)

I hope that I can put the shadow Minister’s mind at rest. My interpretation of the provisions of clause 81(2) are that they would apply equally to the provisions of clause 81(3) and that copies would be retained only for as long as necessary for the purposes set out in subsection (2). I will write to him if my understanding is incorrect, but I believe that the legislation is fairly clear on that point.

Clause 82 - Powers of enforcement officers under Police and Criminal Evidence Act 1984

Justin Madders (Labour, Ellesmere Port and Bromborough)

The clause refers to where provision is made for authorised enforcement officers to exercise relevant powers under the Police and Criminal Evidence Act 1984. Those powers are crucial in equipping enforcement officers to effectively investigate labour market offences. The clause forms part of our broader strategy to consolidate fragmented employment and labour practices under one unified fair work agency, including replacing the Gangmasters and Labour Abuse Authority with a strengthened enforcement body.

It is essential that these powers, which are currently exercised by the Gangmasters and Labour Abuse Authority, are carried over to the fair work agency so that the agency can respond more swiftly and effectively to offences, ensuring that breaches of employment law are met with appropriate and immediate action. The integration will not only preserve the Gangmasters and Labour Abuse Authority’s valuable work, but expand on it, reinforcing the Government’s commitment to protecting workers’ rights across the labour market. I therefore commend the clause to the Committee.

Greg Smith (Conservative, Mid Buckinghamshire)

This is an uncontentious clause.

Clause 83 - Offences relating to gangmasters: power to enter premises with warrant

Justin Madders (Labour, Ellesmere Port and Bromborough)

I beg to move amendment 92, in clause 83, page 85, line 10, at end insert—

“(aa) exercise any power conferred by section 79(2) or (4),”.

This amendment would enable an enforcement officer entering premises with a warrant under clause 83 to exercise the same powers to inspect, examine and seize documents as would be exercisable if the officer had entered the premises in reliance on the power conferred by clause 79.

Christopher Chope (Conservative, Christchurch)

With this it will be convenient to discuss Government amendments 93 and 95.

Justin Madders (Labour, Ellesmere Port and Bromborough)

These are minor amendments to ensure that there is consistency between the general power of entry in clause 79 and the power of entry under clause 83. They provide for a consistent approach, which will be easier and simpler to understand. This is a technical change, but one that will ensure that these key powers are easy to interpret and understand.

Greg Smith (Conservative, Mid Buckinghamshire)

I heard what the Minister said, and these are indeed relatively minor amendments that do make sense. Amendment 92 enables an enforcement officer entering a premises with a warrant under clause 83 to exercise the same powers to inspect, examine and seize documents as would be exercisable if the officer had entered the premises in reliance on the power conferred by clause 79. Amendments 93 and 95 largely build on that. While we accept the spirit and the letter of the amendments, which all make sense, I cannot pass up yet another opportunity to wonder why they were not in the Bill in the first place.

Steve Darling (Liberal Democrat, Torbay)

I welcome the further clarity that the amendments offer.

Justin Madders (Labour, Ellesmere Port and Bromborough)

The clause is an essential measure that empowers enforcement officers to enter premises, including by force if necessary, when investigating unlicensed gang- masters activity under the Gangmasters (Licensing) Act 2004. It carries over the existing powers of the Gangmasters and Labour Abuse Authority and brings them together with the other enforcement powers of the fair work agency. It enables officers to gather necessary evidence when there is a reason to suspect illegal labour practices and is a vital step in protecting vulnerable workers from exploitation. It ensures that enforcement officers can conduct thorough investigations to uphold fair labour practices without delay. As at present, enforcement officers will need a warrant to exercise this power.

The clause supports a co-ordinated approach to labour enforcement by integrating the functions of the Gangmasters and Labour Abuse Authority into the fair work agency. We are amending the clause as discussed and introducing a new schedule so that the process of applying for and executing a warrant mirrors that in clause 79, to create a single system of enforcement across the employment rights landscape. I commend the clause to the Committee.

Greg Smith (Conservative, Mid Buckinghamshire)

As we made clear in the debate on the amendments to the clause, the official Opposition are broadly content, particularly given the explicit requirement for a warrant to enter premises, that we can support it.

Clause 84 - Power to request LME undertaking

Christopher Chope (Conservative, Christchurch)

With this it will be convenient to discuss clauses 85 to 87 stand part.

Justin Madders (Labour, Ellesmere Port and Bromborough)

The labour market enforcement system was introduced by the Immigration Act 2016. It has proved an effective and flexible system to ensure that employers comply with the law. This set of clauses largely replicates the relevant provisions of the 2016 Act but replaces references to the enforcing authority with references to the Secretary of State, in order to reflect the transfer of functions to the Secretary of State. Clause 72(4) provides that enforcement officers may exercise any enforcement function of the Secretary of State.

Clause 84, together with clause 72(4), will ensure that enforcement officers appointed under clause 72 will have access to the powers they need. It gives the Secretary of State the power to request labour market enforcement undertakings, which are agreements made between the Secretary of State and a non-compliant employer. They outline measures that the employer will take to maintain compliance with the law and set out the prohibitions, restrictions and requirements with which the employer has agreed to comply. Labour market enforcement undertakings are important to ensure effective enforcement of the relevant labour market legislation within the fair work agency’s remit. They are effective in securing timely compliance, fostering collaboration, providing tailored solutions and improving conditions for workers. Labour market enforcement undertakings encourage persons to take responsibility for compliance while reserving more punitive actions for cases where voluntary efforts fail.

Turning to clause 85, the power to request labour market enforcement undertakings will be a key part of the fair work agency’s enforcement powers. Labour market enforcement undertakings are voluntary measures agreed between an individual business and the Secretary of State and seek to correct non-compliance to avoid the need for more extensive powers. Clause 84 gives the Secretary of State the power to request such undertakings, but clause 85 is crucial to ensure that the scope of the undertakings is clear. It does that by defining a “measure” in relation to an undertaking. It also specifies when those measures can be agreed as part of an undertaking and provides a delegated power for the Secretary of State to specify additional measures that may be included in an undertaking through affirmative regulations.

Clause 85 largely replicates existing legislation in the Immigration Act 2016, although references to the enforcing authority are again replaced by references to the Secretary of State, in order to reflect the transfer of functions and powers to the Secretary of State. The clause, together with clause 72(4), will ensure that enforcement officers appointed under clause 72 will have access to the powers they need.

Clause 86 closely follows section 16 of the Immigration Act 2016 and carries over elements of the labour market enforcement undertakings system, which has operated well since its introduction. The clause provides that the Secretary of State will be able to specify the time period for which an undertaking will last, with a maximum time of two years. That is sensible flexibility: the more serious or systemic the breach, the longer an undertaking may need to be monitored. Clause 86 will also allow the Secretary of State to release persons from an undertaking, and require a release where the undertaking is no longer serving its purpose. That, again, is sensible flexibility, which will allow the fair work agency to cease subjecting persons to undertakings where they comply with the provisions of the undertaking and show improvements, so that fair work agency officers can thereafter focus on higher-risk employers.

Clause 87 replicates section 17 of the Immigration Act 2016 and provides for how the Secretary of State should give notice to an employer about labour market enforcement undertakings. It replicates the existing law with minimal change—the current system works well. I commend the clauses to the Committee.

Greg Smith (Conservative, Mid Buckinghamshire)

I will focus most of my comments on clause 87, on the means of giving notice under the provisions of clause 84. I think we can all fully understand what clause 87(1) means by

“(a) delivering it to the person,

(b) leaving it at the person’s proper address,

(c) sending it by post to the person at that address”.

However, there is some potential for confusion—and a need for greater clarity, be that in advice, notes after the Bill becomes an Act or perhaps more formally during the passage of the Bill—regarding what precisely we mean by “electronic means”. Subsection (8) states:

“‘electronic address’ means any number or address used for the purposes of sending or receiving documents or information by electronic means”.

As Members of this House, we all sometimes have constituents who use all manner of extra means to try to get messages through to us, particularly with the growth of different social media channels and direct messaging. Most reasonable people still define “electronic means” as what is now probably the old-hat electronic means: published email addresses and perhaps text messages via mobile phones, WhatsApp and similar messaging platforms. Some businesses have websites that make it quite difficult to contact the business by means other than a website contact form, or perhaps their only published contact details are via social media channels.

Without wanting to get too detailed and specific, I think it would be welcome if the Minister could—this afternoon would be great, but certainly at some point before the Bill becomes an Act—double-check with the Department and his legal advisers whether things such as Instagram direct messages would count as “electronic means” under the clause. It is very easy—I am guilty; I have done it with some messages—to miss a message that does not come via the expected channels, such as published email addresses, postal addresses or whatever it might be. With social media channels—I have certainly found this with Instagram—it is sometimes very easy for legitimate constituent messages to find their way into junk folders, which are far less straightforward than our inboxes.

If the notices may be issued via those slightly less obvious electronic channels, can we have clarity on that? What safeguards will be put in place to get around the chance of a notice going into some sort of electronic trap—a junk folder, spam folder or whatever it might be—so that the enforcement body can have confidence that the notice it has served has reached the intended recipient? I suppose that these days the same point would apply to the postal method of delivering a notice—we all know that postal deliveries are not as frequent as they used to be—so if such notices are not going to be sent via some form of signed-for or special delivery, how can there be confidence that any notice served under clause 87 has reached the business owner or the director against whom enforcement action is being considered? Clarity is key here.

Steve Darling (Liberal Democrat, Torbay)

I welcome the points made by the shadow Minister, and wait eagerly to hear from the Minister.

Justin Madders (Labour, Ellesmere Port and Bromborough)

I am grateful for the general support. The shadow Minister has raised some fair questions and articulated the frustration we all feel when trying to deal with certain organisations. I know it is a Thursday afternoon, but I could talk for some time about how my satellite TV provider has proven quite elusive when I have tried to speak to an individual.

I think I can put the shadow Minister’s mind at ease on this issue. Clearly, the purpose of the undertakings is to encourage compliance, so an undertaking will not appear out of thin air, but will be the result of an ongoing conversation between the employer and the fair work agency. Clause 87(6) specifies that notices or undertakings can be sent by electronic means only if

“the person has indicated that notices under section 84 may be given to…an electronic address”

and in a particular format, so there is already a safeguard in the Bill to ensure that those messages do not go missing. The whole purpose of an undertaking is that there is an agreement between both parties that there will be compliance, so it would not be in the fair work agency’s interest to send things to addresses or places where it was not confident that they would be received. It is all about encouraging compliance, and that is the purpose of the clauses we have just debated, so I commend them to the Committee.

Clause 88 - Power to make LME order on application

Christopher Chope (Conservative, Christchurch)

With this it will be convenient to discuss the following:

Clauses 89 to 94 stand part.

Government amendment 189.

Justin Madders (Labour, Ellesmere Port and Bromborough)

Clause 88 carries over provisions that are currently in section 18 of the Immigration Act 2016. It gives the appropriate court the power to make a labour market enforcement order following an application by the Secretary of State. Labour market enforcement orders are a critical tool in the existing enforcement of employment rights, and it is vital that this system can continue to operate when enforcement is brought together under the fair work agency.

Clause 89 sets out the circumstances in which the Secretary of State may apply for a labour market enforcement order, and largely follows section 19 of the Immigration Act 2016. The Secretary of State may apply for an order if an employer refuses or fails to enter into a labour market enforcement undertaking, or does not comply with the measures in an undertaking that it has entered into. That is a common-sense approach to enforcement, first allowing businesses to fix problems voluntarily, and ordering them to improve only if that does not work. That is the compliance-first approach we want the fair work agency to take.

Clause 90 replicates section 20 of the Immigration Act 2016. It too grants the power to a court, where a person has been convicted of a labour market offence, to make a labour marker enforcement order. That is a reasonable measure, which protects workers by introducing an additional safeguard in relation to rogue employers. The labour market enforcement order may impose measures in accordance with clause 91 to ensure compliance with relevant legislation. This provision is substantially unchanged from the Immigration Act.

Clause 91 largely replicates section 21 of the Immigration Act 2016. It lays out what measures may be imposed in a labour market enforcement order. It also carries over from the Immigration Act 2016 a power for the Secretary of State to specify such measures in regulations. That is an existing power, and it makes sense to keep it to allow for flexibility in enforcing employment rights legislation. The measures are specifically designed to prevent or reduce the risk of the respondent failing to comply with any requirement imposed by or under relevant legislation, thereby protecting workers.

Clause 92 also carries over provisions from the Immigration Act 2016. It specifies that labour market enforcement orders can be granted only for a maximum period of two years and cannot be imposed on those under the age of 18. It also allows for courts, when making an order, to release individuals from undertakings for the labour market offence concerned, and from any other orders, to avoid individuals being subject to multiple undertakings and orders at the same time.

Clause 93 replicates section 23 of the Immigration Act 2016 and allows courts to vary or discharge labour market enforcement orders. Clause 94 carries over the appeals process for labour market enforcement orders from the Immigration Act 2016. The Bill clearly lays out which higher courts will deal with the appeal and what orders those courts may make, which is unchanged from the current regime. Clause 94 ports over the appeals process for labour market enforcement orders from the Immigration Act 2016. A clear appeals process is a vital and necessary way to enable the effective operation of the undertakings and orders system.

Let me turn to Government amendment 189. Schedule 6 outlines consequential amendments to other existing legislation and ensures consistency with the new provisions introduced by the Bill, which is important because it makes our legislative framework cohesive and functional. The amendment makes an essential technical addition to the Sentencing Act 2020, updating it to include reference to the labour market enforcement orders that a court may impose on someone upon conviction of a labour market offence. The amendment ensures that our statutory framework can function effectively. The labour market enforcement order system is an existing system that works well. I therefore commend amendment 189 and clauses 88 to 94 to the Committee.

Greg Smith (Conservative, Mid Buckinghamshire)

It is always good to see the Government copying and pasting from a piece of Conservative legislation, with the odd use of the replace function. I will focus my comments largely on Government amendment 189, which makes a consequential amendment to the Sentencing Act 2020 to include labour market enforcement orders in the list of orders that may be made on conviction by a criminal court but that are not dealt with in that Act.

I do not fully understand why the amendment was not included in the Bill on its introduction—it seems a straightforward and should have been in there from the start. But my central question for the Minister is, how does this compare with the current position on enforcement made on conviction by a criminal court? Can the Minister reassure the Committee that this is simply a tidying-up measure that brings existing experience into line with the proposed legislation, or does he envisage the amendment making a material difference?

Justin Madders (Labour, Ellesmere Port and Bromborough)

Let me deal first with the usual concern raised by the shadow Minister about why we have had to table an amendment. He has probably noticed that schedule 6 contains a considerable amount of other legislation. It is not that unexpected that not every piece of legislation affected by the Bill would be covered—that is really what this is about.

The shadow Minister also sought reassurance, and my understanding is that the amendment does not change the current powers of the courts in any meaningful way. If I am incorrect about that, I will of course write to him.

Clause 95 - Evidence of authority

Justin Madders (Labour, Ellesmere Port and Bromborough)

Enforcement officers need the powers to do their jobs effectively, and that is what we are providing through the Bill. Clause 95 introduces a key safeguard around carrying out the enforcement functions in part 5 of the Bill. It applies to any person proposing to carry out an enforcement function of the Secretary of State and to exercise any of the powers of an enforcement officer. It requires those persons—in practice, fair work agency inspectors—to provide evidence of their appointment when carrying out investigations or taking enforcement action. That evidence will be in the form of official identification, sometimes referred to as a warrant card, provided by the Department.

Existing enforcement bodies provide such evidence currently. For example, section 9(1) of the Employment Agencies Act 1973 requires inspectors of the employment agency standards inspectorate to show evidence of their authority “if so required”. We have mirrored that approach in clauses 95 to 97. Persons acting to carry out the Secretary of State’s enforcement functions and use the powers of enforcement officers will have to provide evidence of their appointment on request. That gives businesses the opportunity to satisfy themselves that an inspection, which is an inconvenience and costs time and money, is genuine. The fact that the clause requires officers to provide this evidence only on request reflects the fact that the fair work agency’s inspectors are likely to be in correspondence with businesses before their premises visit.

The way in which we have drafted the clause is proportionate and reflects existing best practice. It balances having an important safeguard in place with ensuring that that does not create unnecessary operational burdens. I therefore commend clause 95 to the Committee.

Greg Smith (Conservative, Mid Buckinghamshire)

As the Minister has said, the clause replicates existing best practice. It is perfectly reasonable that any enforcement officer turning up at any site seeking to engage in enforcement activity—be that under this legislation or in any other field—should have to prove on what authority they are acting. This clause is, therefore, uncontroversial.

Clause 96 - Items subject to legal privilege

Justin Madders (Labour, Ellesmere Port and Bromborough)

The clause provides a safeguard to ensure the protection of any document or information that is subject to legal professional privilege. Such documents or information do not have to be provided in response to any enforcement action by the fair work agency. As Members will know, legal professional privilege is a well-established principle, and refers to a person’s ability to speak freely and frankly with their legal adviser to obtain advice. It is a key principle in the judicial system in this country.

Practically speaking, the clause means that no provisions relating to the enforcement of labour market legislation —those in part 5 of the Bill—can require a person to produce documents or information they are entitled to withhold on grounds of legal professional privilege in High Court proceedings in England and Wales. The same is true of documents or information a person is entitled to withhold in Court of Session proceedings in Scotland.

No provisions in the enforcement clauses can compel someone to disclose information they could choose to withhold on the grounds of confidentiality of communications. The clause defines communications for this purpose as any communication between a professional legal adviser and their client or as any communication made, connected with or for the purposes of legal proceedings. Protecting legal professional privilege helps to protect the administration of justice and the rights of individuals and other legal persons. It is a well-recognised concept that appears in many other pieces of legislation. For example, section 42 of the Freedom of Information Act 2000 exempts from disclosure information subject to legal privilege.

The fair work agency will have strong investigatory enforcement powers. Those are proportionate and justified, and it is important that, where investigations do happen, defendants are able to communicate frankly with any legal advisers representing them. I therefore commend the clause to the Committee.

Greg Smith (Conservative, Mid Buckinghamshire)

As the Minister said, the protection of legal privileges is well established in our legal system. It is important, and the clause is the belt and braces of ensuring that it applies to this legislation. In one respect, I could argue that I do not see why it is necessary to write the protection of legal privilege into the Bill, given how entrenched it is in our system. But it never hurts to have that belt-and-braces approach, and the Opposition object in no way, shape or form to the protection of legal privilege.

Clause 97 - Privilege against self-incrimination

Justin Madders (Labour, Ellesmere Port and Bromborough)

Clause 97 provides for another standard safeguard in our legal system: protection against self-incrimination in criminal legal proceedings. The fair work agency has investigatory powers that enable the Secretary of State and the enforcement officers they appoint to require the production of documents and information to enable them to fulfil their functions. It is an offence under clause 104 for anyone, without reasonable excuse, to fail to comply with such a requirement.

The clause protects individuals from self-incrimination by providing that any information they are required to provide under clause 78 is not adduced as evidence against them in criminal proceedings. However, the individual can still choose to voluntarily adduce this information as evidence in the proceedings.

The clause disapplies that protection for certain offences. It provides that the protection does not apply where the offences under trial relate to any of the offences listed in subsection (4)—providing false information or documents under clause 103 of the Bill, or breaching other statutory provisions about false statements and statutory declarations. It is vital, in the context of someone providing false information, to ensure that the right evidence is presented to the court. That, in turn, is crucial to enable the court to come to the right decision.

These protections and exemptions help to ensure the effective functioning and the fairness of our legal system. I therefore commend the clause to the Committee.

Greg Smith (Conservative, Mid Buckinghamshire)

It is becoming almost uncomfortable how much we agree on the current set of clauses. However, these protections, particularly those against self-incrimination, come with the correct, proper and, dare I say it, entirely standard exemptions listed, and the Opposition do not object to the clause.

Clause 98 - Disclosure of information

Christopher Chope (Conservative, Christchurch)

With this it will be convenient to discuss clause 99 stand part.

Justin Madders (Labour, Ellesmere Port and Bromborough)

On clause 98, regulators and enforcement agencies must be able to work together effectively to share information and pool knowledge. For example, if the fair work agency identifies issues with health and safety in the course of its investigations, it should be able to let the Health and Safety Executive know, and vice versa.

Silo working is bad for workers, bad for businesses and bad for the taxpayer. Clause 98 is about preventing silo working. It authorises the two-way sharing of information between the fair work agency and other bodies. It introduces schedule 5, which lists the public bodies with which information can be shared to enable them to exercise their functions. We have tabled amendments to the schedule to add the Pensions Ombudsman, as well as certain authorities in the devolved nations.

The clause also allows for schedule 5 to be amended by affirmative regulations. That provides the flexibility necessary for the fair work agency to respond to changes in the wider labour market and regulatory landscape. Effective information sharing is crucial for successful enforcement of employment rights across agencies. Without the clause, the fair work agency would be unable to receive and share vital information, undermining its ability to effectively enforce those rights.

Clause 99 ensures that the information sharing authorised in clause 98 is efficient and reflective of best practice. Although it is vital that the fair work agency can share information with other bodies, it is critical that personal information is protected. Information will be able to be shared under clause 98 without breaching any obligation of confidence, or other restriction on the disclosure of information.

Clause 99 ensures that information shared under clause 98 is shared in accordance with the relevant data protection laws and remains subject to relevant prohibitions on disclosure in the Investigatory Powers Act 2016. It is crucial to safeguard the ongoing secure handling of information and to ensure that all parties can be confident that that information will be managed in the proper way.

Greg Smith (Conservative, Mid Buckinghamshire)

The critical thing in what the Minister just outlined is that any information sharing must happen within the confines of our existing data protection laws. That is absolutely mission critical. Of course, everyone accepts that enforcement agencies must work with other enforcement agencies and that they need to work closely with other Government agencies at times, where there is a compelling need to do so. In that respect, our existing data protection laws will be the necessary safeguard, as well as the explicit recognition of the other agencies that might be conferred with. From that perspective, clauses 98 and 99 are relatively straightforward.

I ask that the Minister to keep a close eye on the Bill as it passes through Parliament, becomes an Act and is enforced, to check on what we commonly call mission creep and to ensure that the powers exercised under these clauses do not, for unnecessary reasons, become too commonplace. For example, some agencies may unnecessarily share a little too information, in a way that is not relevant to an enforcement activity. We can all get behind enforcement activities where proper due process is followed, but there can sometimes be mission creep, which can stretch into realms that a reasonable person would not say was acceptable.

Peter Bedford (Conservative, Mid Leicestershire)

Does my hon. Friend agree that the phrasing in the clause is perhaps a little too ambiguous and could lead to the mission creep he mentions? If that were to happen, it could result in abuse of power.

Greg Smith (Conservative, Mid Buckinghamshire)

My hon. Friend eloquently—probably more eloquently than me—gets across the point I was trying to make. Where the wording of legislation is open to wider interpretation, mission creep is often the unintended consequence. I have no doubt the Minister does not want to see that mission creep and wants safeguards in place. However, to my hon. Friend’s point, it would be good if the Minister explained to the Committee when he sums up—or committed to doing so on Report—what safeguards can be put in place to ensure that mission creep does not happen and that elements of information sharing not relevant to a direct, live enforcement investigation or prosecution are not allowed to be shared, as well as the impingements that that would bring on businesses across our country.

Justin Madders (Labour, Ellesmere Port and Bromborough)

The shadow Minister makes a reasonable point. Of course, this will all be subject to data protection legislation and the safeguards contained therein. It is also the case that, if the Secretary of State wishes to expand the list of bodies with which information is shared, there is a requirement to amend that list by way of affirmation regulation, giving parliamentary oversight.

Schedule 5 - Persons to whom information may be disclosed under section 98

Justin Madders (Labour, Ellesmere Port and Bromborough)

I beg to move amendment 97, in schedule 5, page 130, line 22, at end insert—

“The Pensions Ombudsman.”

This amendment would enable information obtained in connection with the exercise of enforcement functions under Part 5 of the Bill to be disclosed to the Pensions Ombudsman for the purposes of the Ombudsman’s functions.

Christopher Chope (Conservative, Christchurch)

With this it will be convenient to discuss Government amendments 171, 98 to 100, and 172 to 174.

Justin Madders (Labour, Ellesmere Port and Bromborough)

This is a large grouping again, and I will turn first to Government amendments 97 to 100. Open, two-way information sharing with the regulator is what clause 98 and schedule 5 are all about. These amendments add Scottish health bodies to schedule 5, which will support those bodies in fulfilling their functions. This has been agreed by Scottish Government officials and the bodies themselves.

Amendment 97 also adds the Pensions Ombudsman to schedule 5. Fair work agency inspectors may come across useful pension information that will help the Pensions Ombudsman in its duties, and it is right that they can share that information. The amendments stand to benefit the bodies concerned and the public by allowing the Secretary of State to share information obtained by the fair work agency that is relevant to the functions of those bodies.

Amendments 171 to 174 are about where the fair work agency, in fulfilling its statutory duties, is likely to obtain information that would be beneficial to other statutory bodies. Clause 98(5) gives the Secretary of State the power to disclose certain information to the persons specified in schedule 5. Amendments 171 to 174 add additional public bodies in the devolved nations to schedule 5. Amendment 171 adds the National Crime Agency, amendment 172 adds Social Care Wales, amendment 173 adds the Health and Social Care Regulation and Quality Improvement Authority in Northern Ireland, and amendment 174 adds Welsh Ministers.

The amendments will enable information obtained in connection with the exercise of part 5 enforcement functions to be disclosed to those bodies for the purposes of their functions. The amendments stand to benefit those bodies and the public by allowing the Secretary of State to share information with those bodies that is obtained by the fair work agency and that is relevant to its functions, where the disclosure is relevant to the exercise of those bodies’ own functions. The amendments have all been agreed by the relevant bodies, and on that basis I commend them to the Committee.

Greg Smith (Conservative, Mid Buckinghamshire)

As the Minister said, this is a relatively substantial grouping of amendments, and he outlined very clearly what they all seek to do. I will merely pose a couple of questions so that we can get into some of the practicalities of the amendments.

What purpose does the Minister envisage for the data that will be shared with pensions, healthcare and social care services? How do the Government intend to use the powers in those settings, and what safeguards will be in place? I think we all understand the need for information sharing with a lot of the organisations he outlined, but it seems strange to include healthcare, social services and —to many extents—pension operators. If he could give the Committee some practical examples of where he feels that is necessary, it would help us to consider the amendments more clearly before coming to a determination.

Justin Madders (Labour, Ellesmere Port and Bromborough)

The shadow Minister lays down a challenge for me. On the Pensions Ombudsman—I will certainly write to him if anything occurs to me after consultation with officials—it is not unusual for an individual’s payslip or contract to indicate that pension deductions have been made, when they have not actually reached the appropriate pension funds. That may be one example of where such a reference could be made.

The shadow Minister will be aware from the Low Pay Commission’s recent reports that health and social care are the sectors where some of the worst labour market abuses are ongoing, so it is important that we are sighted of particular issues in those sectors. I will take further advice on any other specific examples I might be able to give him, and I will write to him in due course.

Justin Madders (Labour, Ellesmere Port and Bromborough)

I will not detain the Committee long. Schedule 5 is the list of bodies with which information can be shared, which obviously now includes the Pensions Ombudsman. As I have indicated, any further bodies would need to be added to the list by affirmative regulations.

Greg Smith (Conservative, Mid Buckinghamshire)

We accept the list, but welcome the Minister’s commitment from the previous debate to provide clarity on the organisations on it. We need greater reassurance on those, but for the time being I will certainly not object to the schedule.

Clause 100 - Restriction on disclosure of HMRC information

Justin Madders (Labour, Ellesmere Port and Bromborough)

Data from His Majesty’s Revenue and Customs will be crucial for the investigation and enforcement of many different employment rights beyond the national minimum wage, which HMRC is specifically tasked to enforce on behalf of the Secretary of State. However, much of HMRC’s data is understandably confidential, and it is therefore prudent to require an extra level of approval before information shared by HMRC is disclosed further.

The clause restricts the disclosure of that information without authorisation from the commissioners of HMRC. If information is inadvertently shared without approval, section 19 of the Commissioners for Revenue and Customs Act 2005, on wrongful disclosure, applies. The result could be a fine and/or imprisonment for the individual committing the offence. The clause ensures information-sharing best practice across Government and puts in place an appropriate safeguard around the sharing of HMRC data.

Greg Smith (Conservative, Mid Buckinghamshire)

On the face of it, this is a sensible clause with appropriate safeguards around HMRC data. The only note of caution I would throw into the mix when involving HMRC in any investigation is that there are arm’s length bodies and then there are arm’s length bodies, and it is well known that HRMC can often prove very independent, if I may put it that way, when it comes to such investigations. I know—and this is relevant—from other work I do, including as chairman of the loan charge and taxpayer fairness all-party parliamentary group, that there can sometimes be some difficulties and challenges in terms of HMRC’s ability to share data and its willingness to engage in a straightforward conversation, even with other enforcement agencies.

I encourage the Minister, prior to enforcement of this legislation, to work with his colleagues in the Treasury team—his right hon. Friend the Chancellor and, more importantly, the Economic Secretary to the Treasury—to find the most straightforward way of getting an agreement in place with HMRC on these enforcement activities, because there are too many tales of woe from other areas, such as the loan charge, in which I take a particular interest on behalf of a number of constituents and which must be got right. HMRC is a body that many right hon. and hon. Friends have found it difficult to get straightforward answers out of under all sorts of Governments—blue ones, red ones and coalition ones—over recent years. I encourage the Minister to do that due diligence and work to ensure that, metaphorically speaking, all the ducks are in a row.

Justin Madders (Labour, Ellesmere Port and Bromborough)

The shadow Minister raises some fair points. I commend him for the work he does on the loan charge, and that all-party group is important. Certainly, HMRC’s functions in terms of the fair work agency will be focused on national minimum wage enforcement. I do not think that that is an area where we have some of the difficulties the shadow Minister referred to, but of course we will make sure. The intention in the clause is to make sure that appropriate safeguards are indeed in place.

Clause 101 - Restriction on disclosure of intelligence service information

Justin Madders (Labour, Ellesmere Port and Bromborough)

I beg to move amendment 175, in clause 101, page 95, line 11, leave out from “person” to end of line 12 and insert

“to disclose information to an enforcing authority where—

(a) the person is serving in an intelligence service, or

(b) the information is intelligence service information.”

This amendment would provide that clause 98(2) does not authorise the disclosure of intelligence service information.

Christopher Chope (Conservative, Christchurch)

With this it will be convenient to discuss Government amendment 176.

Justin Madders (Labour, Ellesmere Port and Bromborough)

When carrying out investigatory and enforcement activity, the enforcement officers will need to obtain information relevant to the Secretary of State’s enforcement functions. That is why clause 98(2) permits the disclosure of information to the Secretary of State or an enforcement officer if the disclosure is made in connection with an enforcement function. But there is a need to ensure that certain categories of information are treated differently, given their likely sensitive nature or content.

One such category is intelligence service information. The chiefs of the intelligence services are under statutory obligations to make sure that information relating to their service is not disclosed unless to do so is in accordance with certain requirements. Clause 101 therefore sets out restrictions on the disclosure of intelligence service information, to ensure that the Bill is consistent with those obligations.

Clause 101(1), as introduced, refers only to persons serving in an intelligence service. After discussion with the intelligence services, it is clear that there is a need to ensure that intelligence service information held by third parties is also protected, so Government amendment 175 widens the restriction at clause 101(1) to ensure that clause 98(2) does not require third parties to disclose intelligence service information to an enforcement officer.

Government amendment 176 is consequential on amendment 175. Amendment 176 inserts wording into clause 101(1) to clarify that the restriction on persons serving in an intelligence service from disclosing information under clause 98(2) does not affect disclosures that such persons could make under intelligence service disclosure arrangements.

These amendments protect intelligence service information from disclosure. They are part of a series of amendments that aim to balance the need to preserve the work that the intelligence services do in protecting key national interests with ensuring that the fair work agency can exercise its functions where necessary. On that basis, I commend the amendments to the Committee.

Greg Smith (Conservative, Mid Buckinghamshire)

When it comes to protecting our intelligence services, it turns out that the Minister is not Dr No after all. [Interruption.] I think we will leave it there. The point that I have made so many times is that it is right to protect and exempt our intelligence services to ensure that they can get on with the work they need to do, with the right level of confidentiality, and that the vital work done to protect our country is at all times protected. Therefore, we welcome the amendments, but, as ever, we ask why it has taken until the Bill is in Committee to work out that position and the vital importance of exemptions for the intelligence services.

Justin Madders (Labour, Ellesmere Port and Bromborough)

The clause ensures that intelligence service information is disclosed to the fair work agency only in accordance with intelligence service disclosure arrangements and cannot be shared by the fair work agency without authorisation from the appropriate service chief. In the course of investigating some employment rights abuses—for example, in cases of modern slavery or coercive employment practices—the fair work agency may make use of information provided by the intelligence services or come into possession of information relevant to the intelligence services. That information is likely to be highly sensitive in nature, and specific disclosure arrangements therefore apply.

The clause authorises a person serving in an intelligence service to make disclosures of information to an enforcement authority in accordance with intelligence service disclosure arrangements. It restricts the disclosure of intelligence service information by an enforcing authority without the authorisation of the appropriate service chief for the intelligence service from which the information was obtained. It is right that there are additional protections for this information, not least on national security grounds. I commend the clause to the Committee.

Greg Smith (Conservative, Mid Buckinghamshire)

Yes, absolutely—there is no issue for His Majesty’s loyal Opposition with the protection of our intelligence services.

Clause 102 - Offence of failing to comply with LME order

Christopher Chope (Conservative, Christchurch)

With this it will be convenient to discuss the following:

Clauses 103 and 104 stand part.

Justin Madders (Labour, Ellesmere Port and Bromborough)

Clause 102 addresses the need for accountability and compliance with labour market enforcement orders. It creates a clear offence of failing to adhere to a labour market enforcement order without reasonable excuse, sending a strong message that non-compliance will not be tolerated. The clause ports over the existing offence in section 27 of the Immigration Act 2016 and does not create a new offence. The clause is essential to ensure that labour market enforcement orders hold real weight and authority in our legal framework.

The penalties under clause 102 are designed to be fair yet firm, with varying limits for summary conviction in England, Wales, Scotland and Northern Ireland, and up to two years’ imprisonment or fine on conviction on indictment. The range of penalties enables the courts to respond proportionately to the severity of each offence, ensuring that justice is both accessible and effective across the UK. By maintaining meaningful penalties, we maintain a powerful deterrent against non-compliance, which encourages individuals and businesses to uphold their obligations and respect labour laws. The approach we have taken in the clause emphasises both accountability and fairness, ensuring consistent enforcement across jurisdictions.

I turn to clause 103. For the fair work agency to enforce effectively, it needs to rely on the information it gathers. Providing false information slows investigations down and slows down justice for workers. The clause therefore carries over and consolidates offences from predecessor legislation to create a single offence of providing false information. The clause provides that an offence is committed when a person

“produces, or knowingly causes or allows to be produced, any information or document”

that is materially false. It provides that an offence is committed when the person providing information is either aware that it is false when providing it or has not taken reasonable action to confirm its accuracy. The clause also sets out the penalties applicable in England, Wales, Scotland and Northern Ireland. It is right that falsifying documents should carry a criminal penalty.

Clause 104 provides a vital tool in the arsenal of our labour enforcement officers. Employment rights enforcement is generally a civil regime, founded on consensual investigations. That is right and proportionate, but it is important that there is a clear course of action when individuals block or stymie investigations. The clause creates a single offence for anyone who intentionally obstructs an officer or fails, without reasonable excuse, to comply with their lawful requirements. In doing so, the clause consolidates similar offences in the predecessor legislation for the current enforcement bodies.

Clause 104 is fundamental to ensuring that enforcement officers can perform their duties without interference, which is essential for effective labour market oversight. Obstructing officers’ work undermines these efforts, delaying investigations and weakening compliance. The clause directly addresses this issue by establishing clear consequences for those who intentionally hinder enforcement officers in the execution of their duties. The penalties in the clause are proportionate but firm, with tailored limits across UK jurisdictions. This approach ensures consistent consequences for obstruction, reinforcing compliance with employment rights law and protecting workers’ rights, fostering a safer and fairer labour market.

As we deliver this upgrade to enforcement, we need to ensure that there are safeguards in place to prevent action that might interfere with the work of the intelligence agencies and could be detrimental to national security. That is why we have tabled new clause 50, which provides a defence for individuals to the offence of providing false information in clause 103. The defence applies only where the Secretary of State has issued a certificate stating that they believe it necessary for the person to engage in such conduct for reasons of national security, preventing or detecting serious crime, or maintaining the economic interests of the country. The new clause sets out that such a certificate may be revoked by the Secretary of State at any time. This is a necessary exemption; it maintains the ability of the Secretary of State to carry out their enforcement function, while balancing national security interests.

Greg Smith (Conservative, Mid Buckinghamshire)

I will focus the majority of my comments on Government new clause 50. As the Minister has outlined, the new clause provides a defence to the offence in clause 103 of providing false information or documents in response to a requirement imposed by the Secretary of State under part 5 of the Bill. The defence would apply if the Secretary of State certified that the conduct in question was necessary in the interests of national security, or for those other reasons that the Minister outlined.

I think we can all categorically understand the defence of the conduct being necessary in the interests of national security—that is uncontroversial. Likewise, when it is for the purposes of preventing or detecting serious crime—that seems relatively uncontroversial. It is slightly more open to interpretation, but is clearly put forward with good will. Indeed, the prevention and detection of serious crime is something that we all wish to see.

On conduct that is

“in the interests of the economic well-being of the United Kingdom”,

again, on the face of it, that is something we all want to see; we all want the economic wellbeing of our great country to be protected. So, on the face of it, these measures seem sensible. However, that third defence—the economic wellbeing defence—seems incredibly broad and ill-defined. I would be grateful if the Minister could provide a more detailed explanation of what exactly it means, and how the discretion of the Secretary of State would be circumscribed in deciding what matters genuinely relate to the interests of the economic wellbeing of the United Kingdom and what do not.

If we put a bunch of lawyers in a room, they could come up with virtually any reason why something could fall within the interests of the economic wellbeing of the United Kingdom. I do not think that anybody—including the Minister, from the perspective of ensuring that his Bill works once it is an Act, or indeed of the national interest of the United Kingdom—would want to see such an ill-defined phrase enabling a legal argument that virtually anything relates to the economic wellbeing of the United Kingdom. For example, would a fraction-of-a-per-cent drop in growth be defined as relating to the UK’s economic wellbeing? I do not think that the new clause is sufficiently well defined to give the Minister the powers that I think he is looking for within the confines of this proposed legislation, or indeed to give the outside world the confidence that it needs to understand the full scope of what is going on here.

Laurence Turner (Labour, Birmingham Northfield)

I understand the point that the shadow Minister is making, but this phrase seems to be well established in the relevant legislation. It appears in the Regulation of Investigatory Powers Act 2000 and other legislation that establishes legal parameters around the security services, and appears to have first been used in this House by Douglas Hurd. I do not know whether the Minister will also respond to this, but does the hon. Member accept that these provisions appear to be carrying forward some well-established and understood legal concepts?

Greg Smith (Conservative, Mid Buckinghamshire)

I agree with the hon. Gentleman that this is a well-established form of wording, and I do not think there is anything between our positions on national security. However, even if it is well entrenched in previous legislation, leaving “economic wellbeing” so ill-defined presents an open goal to those who would wish to abuse that definition. Indeed, if we had proposed such a broad and ill-defined Opposition amendment, I am sure that Government Members would start to use terms such as “wrecking amendment”, and so on, and to talk about opening up the legislation far too widely.

Although we are not opposed to the spirit and the letter of the bulk of new clause 50, it would be helpful, before this legislation goes any further, if the Minister gave a serious, detailed and clear explanation of what he means by the economic wellbeing of the United Kingdom, and a guarantee that this will not be used, potentially through misinterpretation, by those in the legal profession such that what the Minister wishes to achieve through this legislation could fall down and be found wanting.

Justin Madders (Labour, Ellesmere Port and Bromborough)

The first thing to say is that the new clause came at the request of the security services, so it is not a whim on the Department’s part, and it applies specifically to the offence under clause 103 of providing false information. It would be rather rash of me to start talking about situations in which that might apply. I understand the hon. Member’s point about the wider economic test being quite broad, but as my hon. Friend the Member for Birmingham Northfield said, that is the established test in legislation. Given that we are talking about a defence to a specific offence under clause 103, I would suggest that the chance of this being frequently used, or indeed misused, is extremely remote, although as I say, it would be improper for me to speculate on the circumstances in which it might be used, given the sensitivities around the proposals.

Clause 105 - Offences by bodies corporate

Christopher Chope (Conservative, Christchurch)

With this it will be convenient to discuss clauses 106 to 108.

Justin Madders (Labour, Ellesmere Port and Bromborough)

Clause 105 applies the offences in part 5 of the Bill to corporate bodies. It is a standard clause that can be found in predecessor legislation, such as section 27 of the Immigration Act 2016. The clause ensures accountability at both the organisational and individual levels, and practicality in legislation. It makes certain that those complicit in the offence can be held personally liable.

Clause 106 applies the offences in part 5 of the Bill to partnerships; clause 107 applies them to unincorporated associations. Subsections (5) and (6) of clause 107 specify that liability is attached to those who committed the offence with consent or who were negligent regarding the offence, as well as to the association. Unincorporated associations play a significant role in various sectors, including sports and community services. These two clauses ensure that all business structures are subject to enforcement. They are standard clauses that are found in predecessor legislation, such as section 30 of the Immigration Act 2016.

Clause 108 sets out how the provisions of part 5 of the Bill relating to the enforcement of labour market legislation apply to the Crown and parliamentary estate. Clause 108(1) provides that all provisions in part 5 are binding on the Crown. Subsection (2) defines Crown premises as any premises

“held or used by or on behalf of the Crown”.

This means that fair work agency inspectors can enter and inspect Crown premises using powers set out earlier in the Bill. We believe this is right. The Crown employs individuals who are entitled to rights in scope of the fair work agency’s remit. The clause will enable officers to carry out investigations and gather information to ensure that the rights of Crown employees are as effectively enforced as other employees’ rights.

The clause also contains certain exemptions that we believe are justified. First, subsection (6) exempts the King’s private estates from the powers of entry. The King’s private estates are defined in the Crown Private Estates Act 1862. They are distinguished from Crown premises. They are not defined as premises used in connection with Crown business and employing staff. Secondly, subsection (6) also exempts

“premises occupied for the purposes of either House of Parliament”

from the powers of entry. The main premises we would expect the fair work agency to enter in relation to Parliament would be the offices of MPs and peers. The wording here ensures that the exemption is wide enough to exempt Members’ offices in the Palace of Westminster and those beyond it. This exemption reflects standard practice.

I want to draw the Committee’s attention to amendments we have tabled for national security reasons. Clause 108(5) of the Bill as introduced enables the Secretary of State to exempt Crown premises from powers of entry where they deem it necessary for national security reasons. The starting point of the current drafting is that powers of entry apply generally and need to be disapplied. The exemption applies only to investigations of Crown premises that would have national security implications.

Government new clause 49 restricts the exercise of powers in clauses 78 and 79 in relation to the intelligence services, unless the Secretary of State is satisfied that use of the powers would not be prejudicial to national security, the prevention or detection of serious crime, or the economic wellbeing of the UK. The new clause requires the Secretary of State to issue a certificate before the powers can be exercised. Government amendment 182 amends clause 108(1) to provide textual consistency and ensure the new clause functions as intended. Our amendments strike a balance to ensure that the fair work agency is able to investigate the security agencies where necessary, while also ensuring that the powers are not used in a way that could damage the UK’s security interests.

Clause 108 - Application of this Part to the Crown

Clause 109 - Abolition of existing enforcement authorities

Justin Madders (Labour, Ellesmere Port and Bromborough)

Our aim is that the fair work agency will bring together existing state enforcement functions in one place. Delivering this aim means abolishing two existing bodies involved in enforcement of workers’ rights—the Gangmasters and Labour Abuse Authority and the Director of Labour Market Enforcement—and transferring their functions to the Secretary of State. Clause 109 does that.

The function of enforcing the licensing regime for gangmasters and the GLAA’s responsibilities for enforcing aspects of the Modern Slavery Act 2015 will be transferred to the Secretary of State and carried out by fair work agency enforcement officers. The Director of Labour Market Enforcement’s oversight and reporting functions will also be transferred to the Secretary of State. They are replaced by the new duties on the Secretary of State set out in clauses 75 to 77. Clause 75 requires the Secretary of State to set up an advisory board, and there are also the requirements on an enforcement strategy and annual report.

Abolishing these two bodies is a key part of streamlining the current system of employment rights enforcement, which is fragmented and ineffective. It is not about reducing functionality or enforcement capability. In fact, because of the reforms we are making, we hope that the fair work agency will be greater than the sum of its parts. Employment rights will be enforced more effectively and efficiently, which will be fairer for businesses and workers, and there will be greater clarity on where people need to go to seek help.

Greg Smith (Conservative, Mid Buckinghamshire)

Broadly speaking, the clause is uncontroversial. We accept the need to streamline enforcement activities and put them under one roof, notwithstanding my comments about understanding the costs of putting that enforcement body together.

Since we are debating the Employment Rights Bill, I feel it is incumbent on me to pose a question to the Minister as we talk about the abolition, as opposed to the transfer, of existing bodies with existing employees. The term “abolition” has a clear legal meaning, unlike other language that could have been used with respect to the transfer of powers. Will any of the existing employees who engage in enforcement activity under the bodies being abolished by the clause receive redundancy notices? Are they being put out of work or moved to some other part of Government that is not directly related to this enforcement activity, or will all those employees be directly transferred at the discretion of the Secretary of State and deployed under the new agency?

This is an important test of the Bill. Here we have some of the first employees who will be affected by its new provisions. What will happen to those—no doubt very good—people who are currently working as part of the Gangmasters and Labour Abuse Authority and the Director of Labour Market Enforcement? Upon the enactment of the Bill, they will be among the very first people in our country to work out what their employment rights are.

Justin Madders (Labour, Ellesmere Port and Bromborough)

I welcome the shadow Minister’s commitment to workers’ rights; it seems that listening to me for several weeks has finally rubbed off on him. At this stage, it would be premature for me to say that we intend for any redundancies to transpire. The clear presumption, as we move forward, is that all existing staff will transfer over under existing legal protections. Clearly, other issues may arise when we get into the operational detail, and I do not think that it would be appropriate to talk about workforce matters in a Bill Committee; that ought to be discussed with the workforce first. As I say, my clear understanding at this stage is that all staff will be transferring over, because we have a job to do to ensure that the labour market is enforced properly, and we need everyone on board to do that.

Clause 110 - Consequential and transitional provision

Justin Madders (Labour, Ellesmere Port and Bromborough)

The clause introduces schedules 6 and 7, which make consequential amendments and transitional provisions required to deliver this change. Schedule 6 sets out consequential amendments we are making to various Acts of Parliament as a result of these reforms. Part 1 of schedule 6 covers the consequential amendments to existing powers under relevant pieces of labour market legislation. Part 2 of the schedule sets out the changes required to other Acts.

Schedule 7 sets out transitional and savings provisions we need in place to set up the new body. Part 1 of schedule 7 gives powers to the Secretary of State to make transfer schemes to move staff, property, rights and liabilities of the GLAA and DLME to the Secretary of State. Part 2 of schedule 7 provides for other necessary transitional provisions, such as to ensure that smooth sharing of information can continue and to retain provisions that devolved legislation relies on. The clause and the schedules it introduces are necessary to deliver a functioning statute book and to deliver on the policy intention of upgrading enforcement of workers’ rights.

Greg Smith (Conservative, Mid Buckinghamshire)

My thoughts on the clause are similar to those I expressed on the last clause we debated. The language of this one is a little clearer, so the Opposition do not object to it.

Schedule 6 - Consequential amendments relating to Part 5

Justin Madders (Labour, Ellesmere Port and Bromborough)

I beg to move amendment 101, in schedule 6, page 133, line 7, at end insert

“and the italic heading before that section.”

This amendment makes a further consequential amendment to the National Minimum Wage Act 1998.

Christopher Chope (Conservative, Christchurch)

With this it will be convenient to discuss Government amendments 102 and 103.

Justin Madders (Labour, Ellesmere Port and Bromborough)

Schedule 6 outlines consequential amendments to other existing legislation. It ensures consistency with the new provisions introduced by the Bill, which is important to make our legislative framework cohesive and functional.

Amendment 101 ensures textual consistency by removing the italic heading before section 13 of the National Minimum Wage Act 1998. Section 13 is repealed by the Bill. The change is entirely technical, to make sure that all aspects of the legislation are properly aligned and clear for interpretation. Such amendments are common practice when integrating changes into existing legislation and ensure accuracy in our statutory framework. I hope Members will support this uncontroversial and important amendment as it facilitates the clarity and precision of the legislation.

Amendment 102 corrects a small drafting error in schedule 6, and amendment 103 is a consequential change to align with amendment 102. They do not affect the substance of the Bill, but maintain its quality and accuracy.

Greg Smith (Conservative, Mid Buckinghamshire)

These are very minor amendments, to which the Opposition do not object.

Written evidence reported to the House