Lords amendment: No. 19, in page 5, line 25, at end insert—
("(3) In this section—
(4) Before making any order under subsection (2), the Secretary of State shall conduct a review.
(5) Unless he has already begun or completed a review under subsection (4), the Secretary of State shall begin to conduct a review immediately after the fourth anniversary.
(6) Any review shall be completed within nine months.
(7) In conducting any review, the Secretary of State shall consult—
(8) If, on completing a review, the Secretary of State decides to make an order under subsection (2), he shall make such an order to come into force not later than one year after the commencement of the review.
(9) If, on completing a review, the Secretary, of State decides not to make such an order, he shall not later than one year after the commencement of the review lay before Parliament a report—
(10) Any report made by the Secretary of State under subsection (9) shall include a summary of the views expressed to him in his consultations.")
§ Mr. Paice
I beg to move, That this douse doth agree with the Lords in the said amendment.
As the House will know, this is an important clause. We are exempting employers with fewer than 20 employees from the Bill's employment provisions because we recognise that it is likely to be more difficult and burdensome for them than for larger businesses to get to grips with the new right and to have available the advice that they need. However, the Government have listened carefully to the arguments calling for changes to the clause.
Although we have, in earlier debates, rebutted many of the suggested amendments, we have not been inflexible. We amended the Bill on Report so that the power to change the threshold could not be used to raise the threshold above 20. In reaching that decision, we recognised that it was unlikely that there would ever be a need to raise the threshold above the initial number. I gave an undertaking to bring forward a further amendment, which was passed in the other place and, on its own, would have required the Secretary of State to review the operation of the clause within five years of its coming into force and to give Parliament the opportunity to debate the issue. It would also have required the Secretary of State to conduct a review of the effects of clause 7 if, before the fourth anniversary of the clause coming into force, she proposed to use an order to change the threshold number.
However, on Report in the other place, my noble Friend Baroness O'Cathain raised the issue of whether there should be a review before any change in the threshold, whenever proposed. My noble Friend the Minister responsible for the employment of disabled people agreed 146 to consider the matter further, and duly returned with an amendment to that effect on Third Reading in the other place.
The overall effect is that, if at any time the Secretary of State proposes to make an order to change the threshold number, a review must be held, whether the order is to be made within the first four years of the operation of the section or at any later time. A review must be held immediately after the fourth anniversary of the clause's coming into effect, even if no change in the threshold is then proposed, unless a review has by then already started or been finished.
The Lords amendment also requires that any review must be completed within nine months. The Secretary of State would be required to consult employer organisations and organisations representing the interests of disabled people in employment or looking for employment. If the review led the Secretary of State to decide on a change in the threshold, that would have to come into force within a year from the start of the review. If, after a review, the Secretary of State decided not to change the threshold, the amendment would require her to lay a report on the results of the review before Parliament and, at the same time, give reasons for her decision.
The Government have always maintained that it would be best to gain experience of the legislation before considering whether there was a case for widening its scope. We believe it is right to keep the threshold at 20. In the light of the changes, I hope that the House will accept that it is a reasonable position to take.
§ Mr. Tom Clarke
Once again, I am extremely pleased to welcome a Government climbdown—[interruption.] I shall give way to the Secretary of State for Social Security if he wishes to intervene. He clearly does not, as he does not have the courage of his convictions.
I congratulate my hon. Friend the Member for Birmingham, Erdington (Mr. Corbett), who supported us so magnificently throughout the passage of the Bill. I regard him as a truly hon. Friend. I know that disabled people are extremely grateful to him for the tremendous contribution that he has made to our achievements.
Earlier today, my hon. Friend the Member for Bolsover (Mr. Skinner), in the moderate style to which we have become accustomed, said that the Government were parking on Labour territory. I welcome that description of the Government's position. We have been told throughout the passage of the Bill that the exemption of small firms from the obligation not to discriminate against disabled people was necessary. We have been told that such firms should be defined as those employing fewer than 20 people.
The Government opted for the figure of 20, and the Under-Secretary of State for Education and Employment, the hon. Member for Cambridgeshire, South-East (Mr. Paice) told us that that figure had been chosen because it reflected the quota legislation. Throughout the Bill's progress through the House, the Minister agreed that 20 was the best figure. Of course a cut-off at 20 for a 3 per cent. quota makes good sense, as 3 per cent. of 20 is a good deal less than one job. I think that even the Minister's mathematics might lead him to that conclusion, but to import that figure into legislation that deals with the rights of individuals rather than percentages of an overall work force makes no sense.
147 Taken with the abolition of the quota, the measure diminishes the rights of disabled people. However confused the Minister might feel, we have the support of every organisation of disabled people on that issue. The provision introduces the phenomenon of legal discrimination. By the time the Bill had reached Third Reading, Ministers were beginning to sound less convinced. We were told that the threshold should never be raised and that 20 was still the best figure. Now the Government are even less sure. They have finally admitted that the figure of 20 might be wrong and that a review of the principle of exemption will be necessary in five years. The Government did not mention that on Second Reading or throughout the Committee discussions.
I think that the Minister has already concluded that the figure of 20 is wrong. All disabled people should have a right to fair and equal access to the jobs market. I look forward to the day when the denial of employment rights to disabled people in small, medium and large firms will be abolished altogether.
§ Mr. Alfred Morris
Before my hon. Friend concludes, will he comment on the huge number of employers who employ fewer than 20 people? He has made a powerful point that deserves the attention of both sides of the House.
§ Mr. Clarke
As always with disability issues, my right hon. Friend is absolutely correct. I have some private regard for the Under-Secretary of State for Education and Employment, even though I believe that he defends the most abysmal of policies. He does not realise that he must stand at the Dispatch Box and defend a Government that would exclude 96 per cent. of firms from employment discrimination policies and present it as progress.
§ Mr. Wigley
When he responds to this brief debate, will the Minister clarify whether the Government are to some extent returning to the provisions originally in clause 7? As that clause stood originally, it was possible for the Secretary of State to amend the threshold of 20 immediately by order. I understand that there will now be a built-in time delay of up to 12 months before it can be operational. If the Secretary of State believes that there should be an immediate change, will he be able to implement that change without going through the review mechanism and the time delay that is built into the process by the Lords amendment?
§ Mr. Paice
The hon. Gentleman could put that interpretation on it, although he refers to the maximum period. We propose that the review must take no more than nine months, and there is no reason why it could not be conducted much more quickly. We are anxious to ensure that any decision to change the figure is made on the basis of a proper examination of all of the issues.
While I appreciate the personal note in the speech made by the hon. Member for Monklands, West (Mr. Clarke), it was a case of smiling while wielding the knife—even though the knife proved to be made of rubber.
§ Mr. Paice
I must advise the hon. Gentleman that he is treading on dangerous ground this evening. Every time 148 that he congratulates the Government on what he classifies as a "U-turn" or a "climbdown", he is undermining the Labour Front-Bench campaign that we are lurching to the right. I can only assume from everything that the hon. Gentleman has said this evening that the Conservatives are lurching to the left. The hon. Gentleman could find himself in real trouble with his party.
I announced the decision to re-examine the issue before its fifth anniversary on Report six months ago. The fact that it comes as a surprise to the hon. Gentleman only serves to underline his lack of attention at that time.
What the right hon. Member for Manchester, Wythenshawe (Mr. Morris) said about the number of businesses is correct, but far more important is where the jobs are. More than 80 per cent. of jobs are in businesses with more than 20 employees, so the job opportunities of the disabled will not be seriously affected by the proposal.
§ Mr. Alfred Morris
The Minister knows that the Government make a great point of wanting to help small employers. They are very concerned about small employers and, by extension, presumably they are very concerned with the employees of small employers. The Minister's constituency is famous because of Newmarket. Can he tell us how many stables in his constituency employ fewer than 20 employees? It is a very important point and the fact that 96 per cent. of employers are excluded must be a matter of considerable concern. Many people admire the Minister's constituency.
§ Mr. Paice
I am grateful for the right hon. Gentleman's admiration for my constituency. I must be straight with him and admit that Newmarket is not in my constituency—although my constituency surrounds it and the racing industry is important to it.
I do not know the specific answer to his question, but the nub of the issue is that we are not encouraging small employers to discriminate in any way. In the amendment and the clause that it amends, we are saying that small employers should have their particular difficulties recognised by not being forced to comply with the legislation. We hope that small employers will be enlightened: we hope that they will adopt the same approach as other employers and employ disabled people. The amendment does not encourage or exhort small businesses to discriminate against the disabled.
During the Committee stage, Labour Members suggested that a great phalanx of small businesses were waiting to discriminate against disabled people. They could do that now, but they are not doing it in any great number. We are simply trying to protect them from over-burdensome regulations.
§ Mr. Robin Corbett (Birmingham, Erdington)
I am especially grateful for the Minister's remarks about small firms. He knows that we are disappointed about this and other issues. He said that, although small firms will not be obliged to comply with these provisions, we shall look to those small firms to embrace the Bill's aims. I think that some progress has been made. Will the Minister confirm that the largest growth in jobs in the past few years has occurred in the small firms sector? It is vital to the strength and efficiency of our economy that that should continue into the future.
§ Mr. Paice
The hon. Gentleman is right: we do look to the small firms sector. The Government are second to 149 none in their desire to see the small business sector continue to prosper and expand. However, it will do so only if it is not affected by too many regulations. That is why the Government are anxious to minimise the burdens placed on small businesses across all Government activities and policies, and it is why we are proposing the threshold of 20 at this time.
I am grateful for the hon. Gentleman's kind remarks about what I said about encouraging small businesses. If he reads the speech that I gave on Report, he will find that I said it then as well. We want small businesses to adopt an enlightened approach, but we simply do not believe that they should be forced to adopt fairly expensive measures and to understand arid follow all of the legislative ins and outs of the Bill. As I have said, the review will take place in five years' time, if not before. I commend the amendment to the House.
§ Lords amendment agreed to.
§ Lords amendments Nos. 20 and 21 agreed to.