My Lords, it is now 18 months since the Home-based Working Committee was established to conduct a special inquiry into the effects and future development of home-based working in the UK. At that time, barely a day went by when there was not a media story about working from home, so the time was very definitely right for the sort of evidence-based, in-depth inquiry that this House does so well. I am grateful to the noble Baroness, Lady Watkins, whose idea it was to have this inquiry and who steered it through the Liaison Committee.
In November 2025 the committee published its report, titled Is Working from Home Working? The Government and the Office for National Statistics both responded in February 2026. It is a pleasure to be able to debate the report this evening and I am pleased to see so many of the committee members here. They were all very committed to the work we were doing and were challenging but constructive throughout the inquiry. Despite coming at the subject from a range of perspectives, we reached a consensus on the report.
I am grateful to the many people and organisations who gave evidence, both written and in person. I put on record my appreciation for the hard work and commitment of our specialist adviser, Dr Cevat Aksoy, and our committee staff Dom Walsh, Robert Wilson, Mark Gladwell and Lara Orija.
It is evident that there has been a rapid growth in remote and hybrid working since 2020. It was of course driven initially by the pandemic, but it now represents a significant change in the way that work is done by many in the UK. Since that time, the UK workforce appears to have settled into what has been described as a new normal, where a large minority work from home at least some of the time. At the time our report was published, ONS data suggested that 13% of working adults in Great Britain worked from home all the time and a further 26% worked from home some of the time. We also found that the UK has one of the highest rates of home-based working globally. As our report makes clear, these major changes in working practices represent both opportunities and risks for the workforce, for employers and for wider society.
The committee found that government policy and data collection regarding remote and hybrid working sit across multiple departments and agencies. The committee recommended that the Government should allocate ministerial responsibility for the co-ordination across departments of data on the prevalence and impacts of remote and hybrid working.
The committee also noted that there are significant limitations with the data collected by the ONS on remote and hybrid working, so we recommend that the ONS should start regularly collecting and publishing additional data on variable levels of hybrid working. For example, when it says that someone is working from home, that could mean one day a month or four days a week. Its data does not split that up.
My Lords, it is a pleasure to follow the noble Baroness, Lady Scott, who chaired the proceedings of the committee with considerable skill and good temper, as we were all searching for data which does not exist and may never exist, I suspect, given the Government’s priority list. She gave us a good lead all the way through, and, with the help of the secretariat, a good and practical report has been produced. I much congratulate our chairman.
The sudden expansion of working from home during the recent pandemic was, let us be honest, a huge surprise to all of us. Interestingly, and topically, I note that the BBC is going to cover the World Cup working from home in Salford—I look forward to the efforts to make Salford look like San Francisco. Workplace change is generally very slow, but, as the pandemic raged, the expansion of home working took place in a great rush. It was interesting the way that new technology came along at the same time as the pandemic struck. If you had a laptop, a smartphone or a desktop, you could hold meetings with colleagues and see them almost anywhere in the world. It spread like wildfire. Sales of the appliances soared, some bought by employers for workers and others bought by the workers themselves. No longer was digital technology restricted to people with special skills and special knowledge of technology.
This response was necessary to maintain output and economic growth—and, of course, keep down unemployment—during the pandemic. The combination of the pandemic and technology was remarkable, and we were very lucky that it stopped things from getting considerably worse than they already were. As the noble Baroness, Lady Scott, said, the impact was not general. Many jobs—for example, in health, hospitality and factories—could not be executed remotely, and face-to-face contact was still essential. Other areas, especially office-based work, were highly appropriate for remote working, and it spread rapidly in that sector, as well as some others.
My Lords, I too warmly congratulate the noble Baroness on her report: thoughtful, practical, and admirably free from dogma. I think we are all going to ask her to review the report a couple of years’ time, because it is clear that we need more evidence.
As has been well said, the pandemic accelerated what the committee calls a previously “modest and gradual shift”. We have a new reality, with 13% of working adults in Great Britain working from home, 26% in a hybrid way. We do not want to turn back the clock. For carers, disabled people and parents, it has been life- changing and, properly managed, hybrid working can offer the best of both worlds. I can remember going to work and pretending that I had a very important meeting, when actually I was going to see my children’s primary school play. We have all been in situations where we were rigidly supposed to stay at our desks with no flexibility—we might work in the evening, we might do anything, but no, it was the nine-to-five commitment —but the world is very different now. At the same time, what matters is what works for both parties, and I worry that the pendulum may go too far. Employees owe their employer commitments and obligations, as well as the employer owing them to the employee.
Businesses have different requirements. They need people to come in at different times, and many people cannot work from home. If you look at the workers out in Belfast last night—the emergency services—they had to go to work. The noble Baroness, Lady Watkins of Tavistock, will know that people in the health service have to go to work. People talking about working at home can be a little bit precious about their world. The key is that it requires management, and within management the key person I would like to have seen more reference to in the report is the chief people officer, whose job is to make sure you get 110% value out of people, and not 90%. That is all about motivation, engagement and leadership; it is at the heart of productivity. The CPO’s role is about culture, engagement, and performance management—always incredibly difficult, but how much more difficult is it when people are working from home? Workforce planning is at the heart of deciding how you are going to organise jobs that involve working from home. I was talking to someone at a utility the other day. All the call centres are now organised with people working at home, but there is a requirement to come into work on a regular basis to meet colleagues, have training and raise issues. It can be done, but it requires a great deal more thought and analysis.
I welcome the opportunity to contribute to this debate, and thank the noble Baroness, Lady Scott, for so ably chairing the committee, and for her excellent introductory speech covering the findings that most of us will probably repeat in part.
I intend to concentrate on health and disability issues. I welcome the Government’s response to the potential health benefits and risks associated with remote and hybrid working. For many, working has significant health benefits, particularly at home, but for others—those who live alone—it can induce loneliness and isolation, leading to withdrawal, anxiety and depression. The committee found that some opt to work from home and concurrently manage caring responsibilities at home in the same environment. Although findings were not definitive, this may disproportionately affect women who work from home. Constantly juggling work and caring roles is difficult and may result in stress. However, it may provide significant cost and time savings in terms of travel, thus reducing employees’ resulting financial worry.
Some companies report monitoring people’s activity at home during working hours, which may be entirely reasonable, but some home workers find that intrusive and anxiety-provoking. The Government’s response states that the Health and Safety Executive will promote its home working guidance, which should address such concerns and make recommendations for employment best practice to support people working from home while monitoring work output. Though I know little about cyber security, there are definite risks if people do not stick to the rules of their employer when working from home, which may in turn lead to loss of employment.
How many companies actually visit the working environments of home workers to ensure that their employees have the correct equipment and sufficient physical room to work safely all day? Or is this to be solely the responsibility of the worker to decide? During Covid, as the noble Lord, Lord Monks, said, working from home was a huge bonus, but post pandemic many found that they had to work from home for at least part of their hours of employment, as so many companies reduced the amount of office space they provided. For some, this is an advantage: from evidence given to the committee on health, hybrid working has widely been seen as positive. However, others continue to work with inadequate desk and chair space, and are not provided with suitable ergonomically designed equipment, potentially leading to significant musculoskeletal problems.
My Lords, it is a pleasure to follow the noble Baroness, Lady Watkins, in speaking in this important debate. I was appointed Business and Energy Secretary on 13 February 2020, just as the enormity of the Covid crisis was beginning to be understood by the Government. As noble Lords know, just over a month later the UK went into its first national lockdown, with profound impacts on many aspects of our lives, including of course the world of work. My department, together with the Treasury, was of course at the centre of the Government’s economic response to the pandemic, and I have provided both written and oral evidence to the Covid inquiry through its various modules. But, having read this Select Committee report in detail, I think that it provides some really thoughtful and complementary analysis to the work being undertaken by the Covid inquiry.
When we went into the first lockdown, in my department we asked ourselves a number of key questions about the world of work in what has now become the new normal. Would working from home actually work for both employers and employees? What impact would there be on productivity as a result of home-based working, including of course the impact on the well-being of people working at home? Would we see a long-term hollowing out of city-centre businesses, which depended so much on the footfall of people going into work during the week, and what would be the impact on public transport? Would that be financially sustainable with significantly reduced work travel? A particular concern of mine was whether we would see the emergence of what I would describe as a potentially societally destabilising two-tier structure, separating those who were safe and could work at home from those who had to go into a workplace during a very difficult time.
This excellent Select Committee report—I commend and congratulate the noble Baroness, Lady Scott, and all noble Lords who served on the committee—has sought to answer precisely these questions, with the benefit of distance from the time of the pandemic, which of course was a catalyst for the big increase in home working. In the limited time that I have available, I want to pick up on one issue, which is productivity—a number of noble Lords have talked about this—and the impact on productivity of longer-term home or hybrid working.
My Lords, I too thank our committee team and specialist adviser for their excellent work on this report, and the noble Baroness, Lady Scott of Needham Market, for her leadership of the committee and her introduction to this debate.
As we have heard, digital technology has grown quickly since the pandemic. This has helped organisations across the public, private and voluntary sectors to find a mix of home and office working that suits employers and employees alike. It is one of the most profound structural shifts in our labour market in decades. As one witness to our committee put it, the old office is dying and the new one is struggling to be born.
There are three closely connected issues arising from this report: industrial relations, the changing role of management and the implications for productivity. It is clear that we are moving away from the cult of presenteeism and morphing towards one that values what people deliver rather than where they work.
Expectations have also changed. Many employees now see some flexibility not as an optional perk but as a normal part of their job. When that flexibility is properly agreed, it can enhance trust and improve outcomes for both sides, but, where it is imposed or withdrawn unilaterally, it risks creating tension, disengagement and conflict. Indeed, a top-down return-to-office mandate can damage morale and retention when the lived experience of employees is ignored. It was a pity that the committee was unable to hear from businesses adopting a total return-to-office mandate, despite the Herculean efforts by the committee staff to engage with them.
We heard consistently that hybrid working succeeds or fails not because of the policy itself but because of how it is managed. That success relies less on physical supervision and more on greater clarity about objectives and outputs, as well as deliberate efforts to sustain team cohesion and culture. This is a fundamental shift in management practice, and many organisations are still adapting. It is a challenge as well as an opportunity, and there is a clear need for investment in management capability.
My Lords, one of the greatest challenges that the committee faced when writing this report was the lack of good data on how we work in the UK. I would like to expand on some of the points made by our excellent chair, the noble Baroness, Lady Scott.
Without knowing who works from home on how many days, we cannot look for associations between that and various different outcomes and possible effects at the individual, company or national level. As the noble Baroness, Lady Scott, said, the Office for National Statistics currently routinely collects data only on answers to the following questions: in the past seven days, have you worked from home, and in the past seven days, have you travelled to work? That means we cannot tell the difference between someone who works at home one day a week, or even less, and someone who works at home most of the time. Without this kind of data, we have to rely on proxy measures, and those suggest that home-based working is important to study.
We have all heard about the dramatic decreases in job opportunities for those early in their careers. They are often touted as a worrying sign of the effects of AI on the workplace, but—this is where I wish I could use graphics, because it is so much easier to illustrate data—the decline in adverts for jobs suitable for those just entering the workplace starts almost immediately post-pandemic, in late 2022, in data taken from job adverts across the UK, the US, Canada and Australia simultaneously. That is well before we could expect to see any effect on job hirings from AI.
In fact, a team from the University of Warwick, the LSE and the Ellison Institute has analysed data on job adverts and hirings and data on working from home and AI adoption. Although working from home and AI tend to affect the same classes of jobs, it looks as though it is working from home that has so far caused the around 5% decline in the share of new jobs going to junior staff. Why? Other research, in line with what we heard as a committee, suggests that managers are less likely to want to risk taking on a less experienced person when they are hiring for a job where there will not be much opportunity for on-the-job, in-person learning or supervision.
My Lords, I too pay tribute to the noble Baroness, Lady Scott of Needham Market, for her excellent chairing of the committee. Bringing together members with different experiences and perspectives is no small task, yet she guided our deliberations with patience, skill and good humour throughout. I also thank our clerk, Dom Walsh, for his team, whose professionalism enabled us to navigate a substantial body of evidence and research, and those who gave evidence.
Having served on the committee, I can say that one conclusion stands out. The debate about working from home is too often presented as a binary choice: success or failure, productivity or inefficiency, office or home. The evidence that we received pointed to a more nuanced reality: the central issue is not where people work but how work is organised, managed and supported. Remote and hybrid working are no longer temporary responses to an emergency, such as the Covid-19 pandemic; they are now established features of the labour market. The challenge is therefore not whether hybrid working should continue but how it can operate effectively for employees, employers and the wider economy.
One aspect of the evidence that particularly struck me was the unequal distribution of opportunity. The benefits of hybrid working are most available to professional and highly skilled workers, particularly in larger cities such as London. By contrast, many people employed in healthcare, manufacturing, retail and hospitality have little access to such flexibility. We should therefore be cautious about assuming that the experiences of office-based workers reflect those of the wider workforce. Much of the evidence available came from employees rather than large employers. Employees frequently reported positive outcomes, including improved work/life balance, reduced commuting, greater autonomy and enhanced well-being. These benefits were especially cited as important for disabled people, carers and parents, many of whom found that flexible working enabled them to remain economically active.
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The Government indicated that they would consider routes to improving evidence sharing and data collection. The Department for Business and Trade specifically says that it will engage across government to shape flexible working policy and evaluate its impact. The ONS said in a separate response to our report that it was engaging with the department, but that any extension to the data collected would require sponsorship from a government department. So the first of what I suspect will be many questions to the Minister tonight is: can the Government confirm that they will support the ONS to gather data on these variable levels of hybrid working? What steps have the Government taken to capture detailed data on how different groups experience home-based working?
The committee found that home-based working has mixed effects on individuals’ physical and mental health and well-being. There was an overall perception that the impact of home-based working is positive, but that is derived mostly from self-reported evidence. There is no doubt that people with disabilities and carers may have an improved experience of work or may be able to work where otherwise they could not. However, others may be disadvantaged: in particular young people who miss an interpersonal connection, or people with unsuitable home working environments. The Government have acknowledged this evidence gap and highlighted plans for a vanguard taskforce and workplace health intelligence unit, to be established as part of their Keep Britain Working programme. These initiatives will examine how flexible work arrangements can support individuals with long-term health conditions to stay in work. Can the Minister give us a timeline for the establishment of that unit?
The committee welcomed findings that the flexibility of home-based working can benefit individuals with disabilities and with parental and caring responsibilities. The Access to Work scheme provides important support to enable people with disabilities to work, including working from home, yet the committee heard that the scheme was facing administrative and financial difficulties. The Government have stated that a consultation to inform the future direction of Access to Work has concluded and plans will be set out in due course, so I wonder whether the Minister is able to update the House on that this evening. Can she also confirm that remote and hybrid working arrangements will continue to form part of any new scheme?
The committee also heard that groups of people can face challenges in accessing and benefiting from remote and hybrid working, and recommended that the Government promote equitable access through awareness campaigns targeted at employers that focus on specific sectors, regions and demographics where prevalence is lower than it could be. The Government have said they will consider how to target communications on flexible working towards worker groups and businesses that are less likely to work flexibly now.
I ought to note at this point that the term “flexible working” can and often does include hybrid and remote working, but it also encompasses a whole range of other practices. That is an important distinction when we think about the question of equity across the workforce for those whose jobs are simply not able to be done from home, so we welcome the inclusion of flexible working opportunities as a sub-criterion in the Government’s Social Value Model procurement tool.
I turn to productivity. The committee was surprised by a lack of data on the impact of remote and hybrid working on productivity. Evidence on personal productivity was self-reported. Many workers tend towards the view that they are more productive at home—that is hardly surprising given the reduction in commuting time and the potential autonomy to manage their own time effectively. Employer views were much more mixed. Around one-third thought their workers were less productive at home, around one-third thought they were more productive, and around one-third thought it did not make much difference—make of that what you will. However, all employers focused instead on intangible but important issues such as collaboration, creativity and workplace culture. Pretty much all of them reported improved recruitment and retention. In its response, the ONS described plans to develop a linked employer-employee data infrastructure, which would include productivity measures. The ONS aims to publish a technical note and a set of exploratory statistics in the second half of this year.
Overall, we concluded that by retaining the flexibility of remote work and the collaborative benefits of in-person work, the hybrid model has the potential to be the best of both worlds, but only if it is co-ordinated and well managed. We heard that there is little value in employers establishing a hybrid working mandate unless they take steps to ensure that collaboration actually happens. We heard lots of stories of people commuting into the office only to spend the whole day on Zoom calls. Employers need to work harder to make sure that teams are attending the office on the same day and that collaboration is enabled.
It was made very clear to us that strong management skills can alleviate the potential downsides of home-based working. Several witnesses, including from professional associations, told the committee that many managers need much more training in how to facilitate effective remote and hybrid working. The committee recommended that the Government publish guidance on managing employees in these circumstances and incentivise investment in management training, such as by reconsidering the proposed cuts to level 7 apprenticeships. In response, the Government suggested that existing support for management training is sufficient. Perhaps I could gently urge the Minister to have a look at our evidence again, because it strongly suggests otherwise.
Employers that the committee spoke to generally agreed that the Government should avoid further regulatory and legislative intervention regarding remote and hybrid working. This was particularly the case with the so-called right to switch off, where there was a widespread sense that a code of conduct is preferable to legislation. Several witnesses suggested that the Government should reconvene the Flexible Working Taskforce, and the committee asked the Government to explain why it had been disbanded. In response, the Government said that they have launched a consultation on flexible working. As part of the plan to make work pay, the Government will look to establish a more structured and official-led stakeholder group. Can the Minister update the House tonight on what progress has been made in setting up this stakeholder group? The make work pay consultation on improving access to flexible working closed in April. Can the Minister provide an update on the initial findings?
We heard that employees tend to be more supportive of home working than employers. There is a preference gap of about one day: most employees would rather be in the office two days and at home three days, while employers prefer it the other way. This emphasises the importance of ongoing dialogue between employers and employees. We spent quite a lot of time discussing the industrial relations aspects of this.
We also spent a lot of time discussing employers’ back-to-office mandates. The evidence we took suggests that, while these were becoming more common, they quite often codified hybrid work rather than mandating full-time office attendance. The Employment Rights Act allows employers to reject a flexible working request if it is deemed reasonable. However, there is a lack of clarity over the definition of “reasonable”—clearly, what is reasonable to an employer is unlikely to be reasonable to an employee. The committee recommended that the Government consider the risk of litigation and its impact on the tribunal system, which is already struggling, if there is no more clarity on the definition of reasonable. I wonder why the Government consider that the tribunal data from the current system preceding the new reasonable test means that the new test will not significantly increase the tribunal system’s workload.
The committee found that remote and hybrid working have the potential to support wider government priorities relating to increasing employment levels, especially for people with disabilities and those with caring responsibilities. The committee recommended that the Government explain whether home-based working will form part of the thinking behind Get Britain Working and the connect to work programme.
The committee recommended that the Government conduct further research into understanding the wider consequences of changing work patterns. This would encompass regional differences, urban-rural policy, transport, and the retail and hospitality sectors. The committee spent some time looking at these, but we were bedevilled by the same lack of data in this area as in a number of others. It is true to say that the broader the scope of the area you are looking at, the harder it is to nail down whether working from home was causing the issue or whether it was other changes in the economy —or, in the case of the retail sector, things such as energy prices and employment costs. It is quite difficult to tease that out.
The committee found that digital technologies are critical to facilitating access to remote and hybrid working. We recommended that the Government increase long-term investment in digital infrastructure, such as by committing to further funding of Project Gigabit. The Government should support the development of digital skills. We were all surprised to hear how many younger people, while clearly having certain digital skills, do not have the right skills to bring into the workplace, even digitally. That came as a surprise to all of us. In response, the Government said that the proposed statement of strategic priorities has established that business connectivity should be treated as a priority by Ofcom. That is not the same as household connectivity, so perhaps the Minister could clarify that. The Government also noted that digital access and the development of digital skills are being supported by the digital inclusion plan.
The committee found that future developments in remote and hybrid working are difficult to predict. Some sectors may see remote jobs supplanted by AI, while others may find that automation increasingly allows work to be completed at home. The committee has recommended that the Government set out their approach to how AI will relate to remote and hybrid working.
The committee concluded that the long-term social and economic effects of remote and hybrid working are still unclear. There are risks in the long term for collaboration, productivity and skills development. The committee recommended that further research be conducted on the long-term effects of home-based working and that the Government should provide funding for academics to complete this work, facilitating access to longitudinal data.
Our report shed light on the opportunities and challenges that remote and hybrid working pose to individuals, employers and society. However, gaps in the available data remain. We still do not have a full understanding of how different groups experience home-based working and what the long-term impact of the growth of this will be. I beg to move.
From my perspective, the change has been very successful. There is no convincing evidence about productivity—although the noble Baroness, Lady Scott, rightly talked about the range of opinions—but it seemed to me all the way through the proceedings that the quality of management was crucial. If home working was well managed, then companies were pleased with it. If it was not, they were not. The same is probably true of looking at productivity in a fixed workplace of a traditional kind. Major changes in workplace practices are often controversial, with workers sometimes being involved in disputes. Discussions about working time, overtime, and maternity and paternity leave can be contentious in workplaces. But this did not generally occur, as far as we are aware, with the introduction of working from home in the pandemic. There were some problems, certainly, but not anything significant. That was to the credit of British employers and workers, who kept up output in the teeth of a frightening pandemic. It is important to acknowledge just how well we thought they did.
As the noble Baroness, Lady Scott, also said, we seem to have settled into a new normal, where a large minority of workers now work from home, or remotely, at least for some of the time, but that is not the end of the story. Working from home is a phenomenon, but it may be overshadowed by the arrival of another one. Artificial intelligence, which is lurking just around the corner, is likely to be most powerfully felt in those sectors which have introduced working from home the most widely, particularly clerical work and work in offices. It will have a major impact on the future of work; maybe that is a subject for another report by a House of Lords committee.
I finish with one question: do the Government accept that guidance is needed in respect of the proposed code of practice, and what constitutes reasonable, as far as employers dealing with requests from workers for flexible working is concerned? We have started something here, and this will continue on a bigger scale, particularly when we see new technology coming along in the form of AI.
For some people and businesses, working from home is essential. The Minister used to work for Standard Chartered bank. If you have to be on the telephone to Hong Kong in the morning and to America in the evening, this is very difficult to do without flexible working. If tech businesses had to be constrained by the talent pool in their local area, that would be extraordinarily limiting. It is a context between the business, activity, individuals and the employers, and we should try to be unprejudiced, objective and, above all, evidence-based as we look for a way forward.
More must be said about young people, because the Milburn report, which we have all found harrowing and deeply alarming, stated that one in eight people is now not in education, employment or training. Without action, that could become one in six. Of all the people who need to go to work—to learn, listen, be exposed to the watercooler moment, and have bossy people such as me wandering around on management walk- abouts, seeing when they look miserable or out of order —young people should be able to go to a work environment whenever possible. That is very easily said.
I also believe that older people should go to work, because they become rather comfortable. They are better off, live further away, like their house, have their dog, and they are in their comfort zone. In fact, they are stuck in a rut and becoming fossilised. They need to go to work to learn about TikTok and the next generation.
Hybrid working needs good management, analysis and thought. It is here to stay. We do not yet have all the answers, but the noble Baroness and her committee have helped us to understand a few more of the answers rather better.
I acknowledge that the Keep Britain Working programme is considering how employers and government will build healthier, more inclusive workplaces and refine best practice, with the aim of reducing sickness and absence and promoting employment for disabled people. Workplace adjustments and flexible working may well support those with health conditions to enter and stay in work, which is welcomed.
Conversely, it is possible that employers may encourage disabled employees to work only from home, leading to loneliness and a lack of opportunity for promotion. That may be more cost-effective for employers and reduce the cost of the Access to Work government grant scheme. However, I do not believe that this should lead to a reduction in benefits that fund individual workers’ transport to work, which support disabled people to get to work and stay in work. Can the Minister assure the House that His Majesty’s Government will continue to fund specialist equipment, through grants for ergonomic furniture, assisted software and other adapted equipment for disabled people working on company premises and at home? Similarly, is it intended to legislate to ensure that everyone working from home should be provided with the right equipment by their employer to conduct their work safely and effectively?
We did not take evidence relating to piecework at home, but we did learn about its history. Are further regulations needed to protect home workers to ensure that output numbers expected for pieceworkers by employers can be produced within the contracted hours that they are paid for at home? How will the Government ensure that all pieceworkers earn at least the minimum wage for the hours they work?
Some employees reported unreasonable expectations by employers who expected availability out of contracted hours, and associated stress as a result. People working from home report less sick leave. Are they working while unwell or are they healthier due to being able to work at home? Many home-based workers reported working much longer hours than those contracted and feeling unable to log off. Do they feel less able or less reluctant to take sick leave? No one wants home working to lead to the equivalent of sweatshop employment, with no boundaries between home and work and a lack of real human interactions. Some workers live alone in small homes, others in shared houses with multiple occupants. What are the long-term health effects associated with these challenges?
It is clear that we need further guidance on home-based working and close monitoring to ensure that the advantages of increased productivity—or decreased productivity—are known. How can the Government ensure that we develop and promote safe, healthy home-based working policies across our community?
I recall a conversation that I had, as we went into the first lockdown, with the UK heads of some of the major consulting and accounting firms. At the time, they all expressed real concern about the impact of longer-term home working on their employees’ productivity. I had a similar conversation a few months later with them; it suggested that the same firms were pleasantly surprised that productivity had not dropped and, in some cases, had even increased. But then, towards the end of 2020, the anecdotal view I was getting was that any gains in productivity were starting to tail off, as the benefits and synergies of collaborating in person were no longer readily available to employees.
The conclusion from this Select Committee report—forgive me, I am paraphrasing—is that when it comes to productivity the jury is still out, particularly because of the limited availability of quantitative data. I very much welcome the Government’s agreeing to the Select Committee report’s recommendations to collect data and to monitor the economic consequences of home working, including on the UK’s global competitiveness. However, I suggest that the Government need to go somewhat further in their response than just including some specific questions on home working in their periodic surveys to business.
As the Minister will be aware, the CBI, in collaboration with the London School of Economics, published a report in March this year, Remote Work and Firm Productivity. I would recommend all noble Lords to have a look at the detail of that. There is something to be said for the Government working with the major business representative organisations to periodically produce similar targeted analysis of the impact of continued home and hybrid working on the UK’s productivity levels, and, in the context of global competitiveness, to benchmark those productivity levels against what is happening in other jurisdictions around the world. I know that the Select Committee has examined productivity in the context of G7 countries, and that has been incredibly useful, but if the Government are willing to undertake further analysis in collaboration with business representative organisations, they should look at other economies as well, not just those in the G7, which have a similar structure to ours.
I agree with the Select Committee’s conclusion that we do not need any major legislative or regulatory interventions in this area. However, having the Government use their convening power to help deliver internationally benchmarked analysis on home and hybrid working—basically, which measures help in different jurisdictions and what hinders productivity—will make a real difference to both employers and employees as they navigate what we all understand is an increasingly complex world of work, not least, as a number of noble Lords have pointed out, due to the rise in the use of AI in the workplace.
We heard that hybrid working should be designed intelligently, so that the time together is meaningful. It should, as one witness said, “earn the commute”. If done well, hybrid working can give people more control over their work, improve job satisfaction and support more effective use of time; if done badly, it can lead to isolation and loneliness, unclear expectations and a reduction in effectiveness. There are particular risks for younger workers, where opportunities to learn informally from colleagues may be diminished.
As has been said, the committee discovered a lack of current data on productivity, but the evidence from Professor Nick Bloom showed that hybrid working has now settled into a new equilibrium—typically two or three days in the office—and was associated with some productivity gains. These gains appear to come less from direct increases in output and more from improved retention, reduced turnover and a more efficient use of time, particularly through reduced commuting. These benefits are real but not a silver bullet. They are indirect and contingent and, again, if effectively managed, they can make a positive contribution to the holy grail of economic growth.
Hybrid working can also support wider labour participation, particularly for disabled people, those with caring responsibilities and older workers. However, these opportunities are uneven, as the noble Baroness, Lady Watkins, has said. Many workers, especially on the front line, cannot benefit from location flexibility.
The committee heard about some unintended consequences. A parent working from home is physically at home but psychologically at work. The effects of those blurred boundaries are not yet fully understood.
Hybrid working is not just reshaping our workplaces but affecting our wider economy and society, in areas such as city centres, commuting patterns and transport systems, retail and hospitality, as well as highlighting the importance of good digital access, especially in rural areas.
Hybrid working is neither a cure nor a problem to be reversed. It is a structural change that brings both opportunities and risks. The task for Government is threefold, so I have some questions for my noble friend the Minister. How are the Government supporting flexibility, with its benefits for individuals and the economy? How are they addressing inequalities, ensuring that those who cannot work from home are not disadvantaged? How are they supporting improvements in management and organisational practice, particularly in the public sector, because that is where success or failure will undoubtedly be determined?
How the Government answer those questions will affect not just whether hybrid working succeeds today but whether our labour market is ready for the wider changes to come. Although it was beyond the scope of our inquiry, the interaction between hybrid working and the growing use of AI will become increasingly important as we seek to build a modern, fair and productive labour market for the future.
Clearly, understanding the effects of different working patterns on different groups of people, and how we can best encourage more of the benefits and mitigate the downsides, is vital. In their response to our report, the Government agreed, and in fact mentioned a broader evaluation of flexible-working policy changes and the effects of the new Employment Rights Act, and said that the Department for Business and Trade will be engaging with departments about data that they held and that they needed. Can the Minister give an update on this engagement and on what data is being used to perform these policy evaluations?
In our report, we pointed out the need for the ONS to collect more granular data on who is working at home and for how many days. In its response, the ONS said that:
“Any continuation or expansion of hybrid working questions on the”
opinions and lifestyle survey
“would require sponsorship from a government department”,
and that it was talking to the Department for Business and Trade about this data. Can the Minister provide any update on this?
One of the other quite dramatic shifts in recent years is the difficulty of getting people to complete surveys, such as those on which the ONS relies for this kind of data. Less than half of people asked to complete them are doing so. This increases the risk of bias in the type of person who does complete them, skewing the results. There are obviously big advantages to using data that we already hold about people, such as administrative data, and in being able to link data about the working patterns of people within an organisation with, say, the organisation’s performance, the promotion prospects and earnings of people with different working patterns, or productivity.
As a committee, we heard how other countries are able to use their linked employer and employee datasets to look at the effects of working from home, not to mention many other vital issues to do with employment, wages and productivity. But the UK, despite its world-leading national statistics and having the highest percentage of hybrid workers, does not yet have that. In response to our report, the ONS said that it was currently working on beginning this task, having already published a road map for its design in mid-2025. This road map suggested starting with the ONS working with HMRC to bring their data together with PAYE datasets. There seem to be lots of proposals and activity in this area from different organisations, and I wonder whether the Minister could confirm how the Government are progressing this.
I finally note that we have not had a National Statistician in post since early May 2025. I very much hope that this is a situation that will soon change, and that the Minister can reassure us all that data collection and analysis in this really important area is improving.
However, the evidence also highlighted genuine concerns: social isolation, weaker workplace relationships and blurred boundaries between professional and personal life. Questions were also raised about career progression and mentoring opportunities, particularly for younger workers, who benefit from direct interaction with colleagues and managers. Microsoft reported that extensive remote working may weaken collaboration and knowledge- sharing networks.
For me, perhaps the most contested issue is productivity. Yet one of the committee’s strongest conclusions was that there is no convincing evidence that working from home either universally increases or decreases productivity. Overall, the evidence suggested that productivity depends less on location than on leadership, communication, organisational culture and effective management, as so ably highlighted by my noble friend Lady Bottomley.
However, several important questions remain unanswered. We found limited evidence on the impact of home working on consumer service outcomes, regional inequalities and equality and inclusion, and on whether remote working may conceal issues such as domestic abuse or increased caring burdens on women. As we have heard, there are also wider implications for cities, towns, transport systems and hospitality businesses. These gaps demonstrate the need for further research and better data, as articulated by the noble Baroness, Lady Freeman, and others. Can the Minister therefore say what plans the Government have to address these evidence gaps and improve data collection even further?
My conclusion is straightforward: hybrid working in some form is here to stay, but its success is not inevitable. Employers should retain the flexibility to determine arrangements that suit their organisations and workforce, rather than operate under a rigid mandate set out by any Government. Government should support this transition through investment in digital infrastructure, better data collection and the sharing of best practice. Can the Minister say when the Government plan to improve full access to internet connectivity, as well as to digital skills and digital infrastructure, particularly in rural and deprived areas? Indeed, in the area where I live, there is hardly any connectivity.
To conclude, further debate should focus not on where people work but on how we create productive, inclusive and sustainable workplaces, particularly as AI becomes more widespread. Therefore, can the Minister say what action the Government are taking to ensure that flexible and hybrid working do not further entrench inequalities in the workplace?