HL Deb 22 July 1986 vol 479 cc142-67

Consideration of amendments on Third Reading resumed.

The Secretary of State for Employment (Lord Young of Graffham) moved Amendment No. 6: Page 7, line 1, leave out ("whether or not") and insert ("notwith-standing that").

The noble Lord said: My Lords, from all the excitement of recycling, we come to the slightly more pedestrian matter of a drafting amendment to clarify the requirements of Clause 4(3).

The present wording of subsection (3) might suggest that even if a payment made on or after the date of a worker's final instalment of wages fails to satisfy the requirements of Clause 1(2), there is some merit in considering whether it satisfies the time limit in Clause 3(3)(b). That is clearly undesirable. Replacing the words "whether or not" by "notwithstanding that" improves the clarity of the clause and makes it apparent that if the requirements of either Clause 1(2) or Clause 3(3)(b) are not satisfied, then there is no need to look at the requirements of the other clause. This amendment is intended to clarify the position for both employers and workers, and I ask your Lordships to accept it.

On Question, amendment agreed to.

4.30 p.m.

Clause 13 [Abolition, or variation of scope of operation, of wages councils]:

Lord Wedderburn of Charlton moved Amendment No. 7: Page 14, line 41, after ("so") insert— ("(i)").

The noble Lord said: My Lords, I should like also to speak to Amendment No. 8, which carries the substance of the matter. I apprehend that this is not a very controversial matter, but it carries on the theme of clarity pursued by the Secretary of State with the last amendment which, he will have noticed, we did not in any way resist. It arises from two provisions, Clause 18 and Clause 26(3) which, if I may briefly describe it in this way, were put into the Bill at rather later stages. They are concerned with workers who work in a dual capacity, part of the time of which takes them into a wages council sphere and part of the time of which does not.

There have long been difficulties about such matters. I refer to workers who work in different types of business where the employer owns a retail shop within the wages council and the worker works for a short time also in the employer's florist shop nearby which is not within it; and workers who work in residential establishments that are licensed and within the wages council and who move to an unlicensed building of the same employer, or to an office in the case of cleaners, and who fall outside the wages council for a small part of their work. There is the famous illustration of the shop assistant who sold sweets in the shop but lost entitlement to the wages council rate for the time that she was assigned to the postal counter.

The Government's answer to these problems, which was fortified by Clause 18 and the provision in Clause 26, is the traditional answer—to apportion the time or the work, to divide between the two. We have no hope of convincing the Government to change that formula, although my noble friend Lord McCarthy put forward arguments in that direction at an earlier stage. All we seek to do here is to give the Secretary of State power to put to good use his enthusiasm for clarity. We are glad that we can offer him the gist in person. Where the anomalies are so great it seemed to us that a further power might be useful; namely, that the Secretary of State might need to vary the frontiers of the wages council so as to bring the incidental work or payments or time under more comprehensive protection or, indeed, under a more sensible arrangement.

It could be said that it is possible under the Bill as it stands for the Secretary of State to do this under Clause 13 because it is true that Clause 13 allows the Secretary of State to vary the scope of the operation of a wages council by reference to any matter or circumstance whatever. But the same provision, Clause 13(3), goes on to bring to the attention of the Secretary of State in making such an order particular matters. They relate only to the operation of the wages council in regard to employers who are specified in the order, or members of an organisation so specified, or the like. The particular matter therefore which is spelt out by the Bill appears to relate to the variation of the scope of a wages council and possibly even to indicate that it would normally be by restricting that scope. But it says nothing at all about the problems which can arise in respect of groups of workers for whom the apportionment arrangements and the dual capacity arrangements in the other two clauses might well not be wholly sensible and fully satisfactory.

We therefore offer in this amendment the suggestion that in exercising his power the Secretary of State should specifically be told by the Bill that, just as he must pay particular attention to employers' problems under subsection (3), to be even handed he must also pay particular attention to the very difficult problems which sometimes arise in respect of workers in this position. I beg to move.

Lord Young of Graffham

My Lords, I am grateful to the noble Lord, Lord Wedderburn, for his desire to clarify my life; but, alas, this does not really clarify the way. Clause 13 gives the Secretary of State a general power to make an order varying the scope of operation of any wages council by reference to any matters or circumstances whatever and a particular power to vary the council's scope of operation by excluding individual named employers or employers in membership of, or represented on, named organisations.

Amendments Nos. 7 and 8 taken together would give the Secretary of State an additional particular power to vary the council's scope of operation by varying the description of work done or workers who are within scope. Amendment No. 8 would provide that such variation should have regard in particular to the provisions of Clause 18 and Clause 26(3) which are concerned with workers whose work for an employer is only partly within scope of a wages order and with the method of apportioning their remuneration between the part in scope and the part not in scope.

In the debate on Amendment No. 38 on Report (the amendment which introduced the present subsection (3) of Clause 26) the noble Lord, Lord McCarthy, referred to the apportionment principle as anomalous and unjust. These two amendments, put down in the names of the noble Lords, Lord Stoddart and Lord Wedderburn, imply that the principle of apportionment may be undesirable in certain circumstances and require the Secretary of State to have regard to that fact when making an order varying a council's scope of operation.

Clause 13 makes it possible for the Secretary of State to vary the scope of operation of a wages council in cases where minor boundary extensions seem applica-ble. This amendment, which is in form an extension of this power but in reality a limitation on how it may be used, is intended to make it possible for a wages order to be applied to all the work done for a particular employer by a worker whose work would otherwise be covered only partly by the order. For example, if a worker was employed by a hotel and spent most of his time tending the grounds (which is out of scope work) but part of it tending the bar (which is in-scope work) the Secretary of State would be able to alter the definition of the council's scope so that all the work the worker did for the employer concerned was covered by the wages order.

Workers have been employed partly on work in scope, and partly not, probably since wages councils first began and no government have sought to change the position in such a way. This Government are certainly not going to do so, for reasons we have made abundantly clear both in your Lordships' House and in another place. Work in scope will be covered by the wages order, the other work will be subject only to contractual arrangements, as would be the case if it were done by another worker engaged solely on that work. It may seem to noble Lords opposite a good idea to remedy what they see as an anomaly, but just where do you draw the line? What would be the situation if the hotel I have just mentioned employed a full-time gardener as well as the part-time gardener and part-time barman? Would not the full-time gardener regard it as an anomaly if his part-time colleague was covered by the wages order for all the time he worked for the hotel while he was not so covered? I really must ask your Lordships to reject this amendment.

Lord Wedderburn of Charlton

My Lords, we thank the Secretary of State for his response, although we are disappointed by it. Perhaps I may make two comments about his response. I must make it clear that my noble friend Lord McCarthy is wholly in accord with this amendment. Only an unfortunate circumstance prevents my noble friend being here to explain again how the apportionment factor can be anomalous and even unjust. I am not sure that the Secretary of State actually resisted that argument to the full. Of course, I understand that where people are doing two sorts of jobs there will be a difficulty whatever line is drawn, as the Secretary of State's noble friend Lord Trefgarne explained in setting the number of employees to reckon on for rebates for redundancy. Therefore, on that matter we remain unconvinced.

We have no criticism at this point of the apportionment principle but merely say that it may be insufficient to do what is obviously sensible. We felt that the Secretary of State would like a further power to do something sensible, but if he feels that he does not want to do that, so be it.

Secondly, we were interested to note his reliance upon historical precedent. "You cannot do this", he said, "or anything different from this because this has been done ever since wages councils first began". If only he would take the same approach to some of the other matters he is throwing out of the wages councils legislation. We could have pressed upon him that argument had we heard it in Committee, and we would have known how to do it. We would have said that it has been like that since 1909 when young people in sweated trades first began to be protected.

However, we see that we shall not prevail upon the Secretary of State. It is a small point, but one suspects it is one which will cause the Secretary of State to look at his general powers under Clause 13 when this Bill is enacted. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 8 not moved.]

Clause 14 [Wages orders]:

Lord Young of Graffham moved Amendment No. 9: Page 17, line 19, after ("time") insert ("being").

The noble Lord said: My Lords, I ask your Lordships to support this amendment, which is a drafting correction to insert the word "being" which is omitted from the present print of the Bill.

On Question, amendment agreed to.

Clause 16 [Effect and enforcement of wages orders):

Lord Young of Graffham moved Amendment No. 10:

Page 18, leave out lines 12 to 32 and insert— ("16.—(1) If, in the case of any worker to whom an order under section 14 applies, the amount of remuneration paid to the worker by his employer in respect of any week is less than the statutory minimum remuneration provided for him by the order in respect of that week, the worker shall be taken to be entitled under his contract to be paid the difference between those two amounts as additional remuneration in respect of that week.

The noble Lord said: My Lords, with permission, I should like to take Amendments Nos. 10 to 15 and Amendment No. 21 together. The first six amendments clarify the application of Clause 16, which deals with the effect and enforcement of wages orders. The seventh amendment, which is related to the others, improves the wording of Clause 20(6) dealing with the recovery of underpayments by means of civil proceedings taken by a wage inspector. The amendments do not change the substance of either clause. They make the Government's intentions clearer and improve the drafting.

The broad effect of the amendments is to ensure that the provisions of Clause 16, which entitles workers contractually to the statutory minimum and makes it an offence for employers to pay less, are consistent with the revised Clause 17 included in the Bill at the Committee stage. Clause 17 establishes what remuner ation is to be taken into account in determining whether the statutory minimum has been paid. I ask your Lordships to support this group of amendments I beg to move.

On Question, amendment agreed to.

Lord Young of Graffham moved Amendments Nos. 11 to 15.

Page 18, line 33, leave out ("relation to") and insert ("respect of")

Page 18, line 34, leave out ("remuneration not less than") and insert ("an amount of remuneration equal to, or exceeding.").

Page 19, line 16, leave out from ("(a)") to ("by") in line 19 and insert ("the statutory minimum remuneration provided for the worker in respect of the week in question").

Page 19, line 21, leave out ("actually so paid") and insert ("paid to the worker").

Page 19, line 42, at end insert— ("() Any reference in this section, in relation to a worker, to remuneration or statutory minimum remuneration in respect of a week shall be construed as a reference to remuneration or statutory minimum remuneration in respect of the following namely—

  1. (a) in the case of a time worker, time worked by the worker in that week, and
  2. (b) in the case of a piece worker—
    1. (i) work executed by the worker in that week, and
    2. (ii) any such time as is mentioned in section 15(4) occurring during that week.").

On Question, amendments agreed to.

Clause 17 [Computation of remuneration]:

Lord Young of Graffham moved Amendment No. 16:

Page 21, line 20, after ("apply") insert— (" (a) ").

The noble Lord said: My Lords, we introduced an amendment on Report designed to ensure that where an employer supplied goods or services to a worker and the charge he made for those goods or services was to count as remuneration paid for the purpose of comparing what he had paid with the amount statutorily due, the worker had to give his prior agreement or consent. This was to avoid the risk to which the noble Lord, Lord McCarthy, had drawn attention, of a worker having to accept payment in goods or services provided by the employer. While the noble Lord, Lord McCarthy, was gracious enough to thank me for that amendment I have now to tell your Lordships' House that we think it desirable to go one step further.

As the Bill stands, it would not be impossible, or indeed unlawful, for a worker and employer mutually to agree to an excessive charge being made for the goods or services in question in order to side-step the requirement of the Bill that statutory minimum remuneration should apply. In other words, there could be a mutual agreement to contract out of the legislation. We have never countenanced contracting out in any previous wages council legislation and it has no place in the current Bill. Indeed, we have safeguarding provisions elswhere in this part. The purpose of this amendment is to make sure that no loopholes exist, and I commend to it the House. I beg to move.

4.45 p.m.

Lord Wedderburn of Charlton

My Lords, I thank the Minister for his explanation of this amendment, but there are one or two questions I should like to put. It is a difficult matter. Indeed, the noble Lord, Lord Trefgarne, is on record on 26th June as saying he considered it to be complex. The noble Lord, Lord Rochester, said that he thought that Clause 17 was one that he did not understand. I certainly did not, and I refrained from speaking. My noble friend Lord McCarthy found it difficult. So there has been difficulty, especially round the area of what my noble friend Lord McCarthy called, on one occasion, the truck provision or the potential truck provision.

These are deductions which count against the worker—if I may put it that way—in calculating remuneration. Therefore, we are wholly at one with the Secretary of State in wanting to be careful to see that the whole nature of the legislation is not abused by the worker being made to pay or have a deduction made which is such that the employer can get away from a proper calculation of statutory minimum remuneration.

The questions I should like to put to the noble Lord the Minister relate to the change from the previous version, which said that the deduction could be in respect of, goods or services supplied by the employer with the worker's prior agreement or consent", to the version which substantially appears in Amendments Nos. 18 and 19.

The first question is: where the price is greater than the net expenditure of the employer, why should the employer recover a greater sum than that expenditure to which he would be limited in the second of the two cases unless the worker has agreed to the price? Is it the case that the worker's prior agreement or consent does not need to be to the actual price because the price which the employer can charge when he is supplying goods of a kind which in the course of his business he supplies is to be the price that he would have obtained for the goods or services if they had been supplied in the course of that business? If it is not in the course of his business then he is only allowed expenditure incurred in connection with the supply of the goods or services.

All phrases have problems, but accepting the second, for the moment, as watertight, the issue of whether the employee needs to have given his consent and agreement to the actual business price, which may be rather more, in our view arises. The second point is that we regret that at this late stage the phrase, in the course of his business appears. I do not think that appears in a similar area of the Bill. I am not trying to do other than accept that the noble Lord is attempting to make this subsection better from the same point of view which we share, but the phrase, in the course of his business is well known to cause difficulties in other areas of the law. We express regret that a problematical phrase should have been introduced at Third Reading.

Obviously it is not really possible at this stage to propose any other phrase which would be better. It will no doubt go through as part of the Bill, but we want to register that second point and ask that first question, which worries us somewhat. The intention of the Government to improve the clause in our view has succeeded, but we worry about the issue of the relationship between an employer's expenditure and the price of goods when they are offered and supplied in the course of his business,

Lord Young of Graffham

My Lords, I am grateful to the noble Lord, Lord Wedderburn. At this late stage the intention of this amendment is merely to prevent a mutual agreement to contract out of the legislation. Indeed, the employer would be entitled to charge the retail price and this could be the maximum. However, the point of the amendment is to prevent voluntary contracting out by both parties. Indeed, in the words I used before, it would prevent an excessive charge being made for the goods or services in question, in order to prevent the statutory minimum remuneration being paid. I suspect that this amendment has the support of noble Lords opposite. It is for the protection of the employee, and I hope that your Lordships' House will accept it in that spirit.

On Question, amendment agreed to.

Lord Young of Graffham moved Amendment No. 17:

Page 21, line 28, leave out from beginning to second ("or") in line 29.

On Question, amendment agreed to.

Lord Young of Graffham moved Amendment No. 18:

Page 21, line 31, at end insert ("or (b) to deductions made or payments received by the employer on account of any goods or services supplied by the employer with the worker's prior agreement or consent to the extent that any such deductions or payments do not result in the employer recovering from the worker an amount exceeding the cost to the employer of supplying the goods or services in question;").

On Question, amendment agreed to.

Lord Young of Graffham moved Amendment No. 19:

Page 21, line 34, at end insert—

("() For the purposes of subsection (4)(b) the cost to an employer of supplying any goods or services shall—

  1. (a) where he supplies goods or services of the kind in question in the course of his business, be taken to be the amount which he would have obtained for the goods or services if they had been supplied in the course of that business; and
  2. (b) in any other case, be taken to be the amount of expenditure incurred by the employer in connection with the supply by him of the goods or services.").

On Question, amendment agreed to.

Clause 20 [Officers]:

Lord Young of Graffham moved Amendment No. 20:

Page 24, line 23, leave out ("has dealings") and insert ("is dealing").

The noble Lord said: My Lords, Clause 20(2) requires wages inspectors to identify themselves. The expression "has dealings" may imply that a sequence of dealings must take place before an officer need identify himself to a person who may not know that he is acting as an officer. It is the Government's intention that officers should identify themselves whenever they deal with a person who appears not to know that they are acting as officers. I ask noble Lords to support the amendment. I beg to move.

On Question, amendment agreed to.

Lord Young of Graffham moved Amendment No. 21:

Page 26, line 5, after ("of) insert ("an amount of).

On Question, amendment agreed to.

Clause 24 [Transitory provisions relating to existing wages councils and wages orders]:

Lord Stoddart of Swindon moved Amendment No. 22:

Page 27, line 34, after ("(a)") insert ("subject to paragraph 5A of Schedule 6,").

The noble Lord said: My Lords, I beg to move Amendment No. 22 standing in my own name and that of my noble friend Lord Wedderburn of Charlton. It may be for the convenience of the House if we discuss Amendments Nos. 23, 24, 25 and 29 together with Amendment No. 22.

The combined effect of these amendments relates to the procedure that a wages council has to follow in making a wages order. The amendments do not in any way change the new procedure contained in the Bill; they simply seek to delay the introduction of the new procedure. In fact the amendments are rather modest. They give to the Secretary of State a new power, in addition to the other new powers in Part II of the Bill, which offers him the option of deciding whether the new procedure for making a wages order should, as the Bill now provides, come into effect at the same time as most of the other provisions of Part II, two months after Royal Assent, or at some other date. In other words, the Secretary of State would be given flexibility in respect of the procedures for making wages orders, which surely must be a desirable objective. Indeed, we are trying to help the Secretary of State.

If the amendments are not accepted or agreed by the House, then particular problems will be created for at least two groups: the clothing industry; and the licensed residential establishments and licensed restaurants. In the case of the clothing industry, which faces serious problems that arise from the Bill, where the operative date of a new wages order is on 1st January, the anniversary of the last order will be put in jeopardy. Both sides of the industry are concerned about this matter and support this group of amendments.

Perhaps I should explain that, as part of their national agreement, the British Clothing Industry Association and the National Union of Tailors and Garment Workers agree the contents of the wages order of the Clothing Manufacturing Wages Council. Naturally, like any other agreement, it can take some time to achieve and then the proposed agreement has to be submitted to the memberships of both organisations for final approval or otherwise. While this procedure is not as extended as that proposed in the Bill for wages councils, the dates for the various stages of the existing procedure were agreed within the clothing industry before it was known that the Wages Bill would significantly increase the time taken by a wages council to bring an order into effect.

At present wages councils can make orders effective from the day on which they agree to them. In practice they always endeavour to agree an order well in advance of the operative date so that employers are given adequate notice. However, the Bill will increase to some three months the shortest time taken for a wages council to make an order effective. Indeed, the wages councils which are due to make new orders with effect from dates in December are being advised by the Department of Employment to agree a new order in August of this year.

As I have already indicated, the Clothing Manufacturing Wages Council is due to make a new order on 1st January 1987. Although the industry's voluntary national agreement comes into effect a full month earlier, it is impossible for the industry to change the agreed timetable for the voluntary procedures to agree the contents of a wages council order in time to maintain the anniversary date. I understand that in correspondence with the clothing industry the Parliamentary Under-Secretary of State, for Employment, Mr. David Trippier, has rejected any concession on timing because the problem is not of a sufficiently general character. However, while it is true that only those wages councils with anniversary dates that fall two months after Royal Assent and earlier than the clothing industry anniversary date would be affected by these amendments, there are significant industries, such as the licensed residential establish-ments and licensed restaurants, (which in fact has adjourned its meeting until after this Bill receives Royal Assent) which cannot maintain their anniver-sary date unless these amendments are accepted. Indeed, this industry's anniversary date of 6th October is such as to give the Bill retrospective effect, because the council would have had to issue its proposals before the Royal Assent and indeed, as I understand it, before the Bill entered the Committee stage of your Lordships' House. As it stands, the Bill will penalise catering workers because a statutory body quite properly has not anticipated the outcome of legislation.

I am not sure whether the Government expected the council to anticipate the outcome of this Bill; but if they did, then it did not show much courtesy and respect to this House. Indeed, had the council anticipated it, the legality of any order may very well have been in question. This is a complicated matter. I had difficulty in understanding it myself, and I hope that I have been able to assist your Lordships in understanding it. I assure your Lordships that it would do no harm to the Bill to have the amendments included. It would certainly ensure that no anomalies such as those that I mentioned occur after the passing of the Bill. I hope that the Secretary of State will accept them. I assure him that we are trying to be helpful. I beg to move.

5 p.m.

Lord Young of Graffham

My Lords, the noble Lord has explained that the amendment put down in his name and in the name of the noble Lord, Lord Wedderburn of Charlton, is intended primarily to provide a dispensation in the Bill to make it easier for the clothing industry to adapt its well-established, voluntary bargaining arrangements to the new timescale introduced by the Bill for bringing in wages orders.

However, I fear that we are not persuaded that the difficulties which might be occasioned to the clothing industry by the new procedures proposed by the Bill—and we accept that there might be some difficulties—are insurmountable or that they provide sufficient reason for amending the Bill overall, even as a transitional measure. We have given firm undertakings to introduce these particular reforms, which have been sought by a number of employers in other industries who have had good reason to complain about the insufficient amount of time for representations about pay proposals or the effect on their businesses of retrospective pay awards.

I have been asked to assure the noble Lord—and I hope that he will accept this in the spirit that it is offered—that if there are any administrative measures which would assist the clothing industry to smooth the transition from the old procedures to the new, the Office of Wages Councils will gladly put them in hand. I therefore ask your Lordships to resist these amendments.

Lord Stoddart of Swindon

My Lords, I am sorry that the noble Lord could not accept the amendments. That would probably have been the safest and most satisfactory way out. The industries that I have mentioned, and others, would then have had statutory force behind them and may have felt far more confident. However, I think the noble Lord has tried to be helpful. He has heard what I said. There have been representations from the clothing industry in particu- lar. It would be churlish of me not to accept his assurances that if and when anomalies occur, the Government will be prepared to take administrative action to assist in overcoming them. I think that that is a fair assurance. In those circumstances I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 33 [Short title, commencement and extent]:

[Amendments Nos. 23 to 25 not moved.]

Schedule 2 [Constitution etc. of wages councils]:

Lord Wedderburn of Charlton moved Amendment No. 26:

Page 36, line 26, leave out ("not more than 5")

The noble Lord said: My Lords, with the leave of the House, I shall speak also to Amendment No. 27. This amendment concerns the make-up of a wages council. I see that the noble Lord, Lord Trefgarne, has momentarily replaced the Secretary of State. I hope that he will take the same view as his noble friend did on a previous amendment; namely, that that which has been done in wages councils for a long time should continue.

The amendment goes to a rather curious change that the Government intend to make. A wages council is made up of two sides representing the employers and the unions and the workers; it then has a third side, which is very important to its operation and which needs careful consideration—the independents. For as long as there have been wages councils, I believe that it is right to say that the number of independents has normally been three, although I believe in some cases it has been one. But for a certain number of years three has been the norm.

The Government changed the period of tenure in another place, but left the rest as it stood. Then suddenly—and I say "suddenly" advisedly, because my noble friend Lord McCarthy and others protested about the lack of notice—in Committee the Government introduced an amendment saying that there should be not three but five independents. That radical change was made without consultation with the CBI, the TUC, ACAS and so on. That has been said, and to my knowledge it has never been denied. The grounds upon which the change is being made have not been made fully clear, and we feel quite justified in trying to clarify the position at the last moment, before we lose the Bill from the consideration of this House.

In Committee (at col. 454 of the Official Report) the noble Lord, Lord Trefgarne, said that the inspiration for the change came from employers in the retail trade, with, he understood, the support of the workers side of the council. By the Report stage my noble friend Lord McCarthy had discovered that that was not the understanding at least of the union. That misunderstanding remains, and so that cannot be the basis of the change.

Secondly, there was talk both in another place and here, but mainly here, about the difficulty of securing a reasonable attendance of independent members on wages councils. The noble Lord, Lord Trefgarne, (at col. 451) and the noble Lord, Lord Young, (at col. 224) on Report said that appointing more independent members would make it easier to achieve a fuller presence at meetings. The noble Lord, Lord Young, then went on to say that the terms of appointment now were in his hands and the current terms allowed him to replace any member who failed to attend half the meetings in 12 months. Therefore that does not seem a strong reason to change the fundamental structure of a wages council.

The amendments would avoid the disadvantage which the Secretary of State appears to be putting himself under; namely, of appointing, if he did, two more independents to each of the 26 wages councils. According to the noble Lord and to his honourable friend, Mr. Trippier, these are people who are difficult to find, and it would mean appointing 52 more people to the 26 wages councils. Our amendments would say that there would be not more than five independents; the number would normally be three; but it would be five if the wages council asked the Secretary of State. We put in the third provision because we believe that the wages council is likely to know more about the problem into which it is falling than the Secretary of State.

That provision also deals with some of the problems that have arisen in people's minds. For example, at the Report stage my noble friend Lord McCarthy asked (at col. 222) what would happen to the change in the term of office of independent members who were already there. The noble Lord, Lord Young, has not really replied to that.

The problem has arisen as to whether the change may amount to a claim for further patronage. I say that not in criticism of the Secretary of State, but it has arisen in some people's minds. On Report (at col. 224) the noble Lord, Lord Young, was very firm about any such matter. He said there was no intention on the part of the Government to pack the ranks of independent members with their supporters. Therefore that is not the reason for the change.

In Committee the noble Lord, Lord Trefgarne (at col. 451) said that the Secretary of State would not necessarily immediately appoint all the independent members. What is it all about? What is the problem? It does not seem to be attendance. People who are bad attenders can already be got rid of and the terms of appointment can be altered. It does not seem to be the sort of people. It does not seem to be for the reasons that the Minister's honourable friends and others in the Conservative Party generally were making such a fuss about, as my noble friend Lord McCarthy commented in Committee (at col. 452). He said that if one reads the documents, one sees that all sorts of nasty things are said about the mixture of lawyers, academics, businessmen and the occasional trade unionist who turn up as independents. The problem does not seem to be that. It does not seem to be related to a real need to have them because they may not appoint them all, and people are hard to find.

The Government have given no explanation for this provision. My noble friend Lord McCarthy ended by saying: It all looks very suspicious".—[Official Report, 8/7/86; col. 225.]

Although there may be some who say that I am a suspicious man, he is not. What is it all about? The Government must come clean for once. If they do not like the approach to the market economy taken by some independents such as Sir John Wood or other distinguished independent members of wages councils, they had better say so. If it is not that, and it is not the general attendance and structure of wages councils—because they may not appoint the members—I fail to find any justification for this new matter introduced at a late stage in this House. As far as I can find, it was never hinted at by Government spokesmen in the other place. I shall be interested to hear whether I am wrong.

We move the amendment in a genuine spirit of a Third Reading amendment which meets all the Government's arguments such as they are. The possibility of five independent members is introduced, but the normality of three is retained. The case must be made (in our amendment the wages council makes the case) for the Secretary of State to appoint new members. No doubt he could discuss the matter with the wages councils in the interim if he felt that that was needed.

Surely that is a rather better structure and would clear the mind of any suspicious persons. It gives the Secretary of State the power, but it makes the wages council a counterbalancing element. It brings things out into the open, at least in wages councils discussions, rather than leave the matter to the private patronage of the Secretary of State to put two more people, for unknown reasons, upon wages councils.

On these Benches we feel strongly on this matter, having read the lack of explanation from the Government. We shall listen attentively to the Government. We hope that they can put forward some kind of explanation, which so far they have not done. We hope that the Government too will take this matter seriously. I beg to move.

Lord Rochester

My Lords, when this matter was discussed on Report, I said, speaking on behalf of my noble friend Lord Sainsbury and myself, that I thought that the Government needed to give the House a good deal more information than they had as to why they had increased the number of independent members on wages councils to a maximum of five.

We received a little more information from the Secretary of State at the time, but there was one point I made to which I received no response. I asked the noble Lord, Lord Young, whether he would find it possible to say that if two more independent people were to be appointed as members of wages councils, at least one of them should have practical experience of industry. I asked that in that case due regard be paid to the fact that in the industries covered by wages councils there is a rather higher proportion of small businesses than in industry generally.

I hope that on this occasion the noble Lord, Lord Trefgarne, can make some response to that point. If he cannot give me a categorical assurance on the matter, I hope that he will at least express some sympathy with the point that I have made.

5.15 p.m.

Lord Trefgarne

My Lords, as your Lordships will by now be well aware, an amendment to increase the maximum number of independent members on a wages council from three to five was adopted by your Lordships in Committee. Criticism was then made by noble Lords opposite, both in Committee and on Report, on the grounds of lack of prior consultation. Allegations were made that the real purpose of the amendment was to "pack" the ranks of independent members with our supporters.

An amendment put down in the names of one or two noble Lords opposite and the noble Baroness, Lady Turner, to change the number back to three was subsequently withdrawn. The amendments seek to make the additional two appointments of independent members conditional upon a request being made by the council in question. The practical effect of that would be that if the two sides of the council could not agree on whether they should ask the Secretary of State for an increase, the decision would lie with the independent members who have the casting vote in such an event. I am sure that noble Lords would see that as unacceptable.

As my noble friend explained during the debate on Report, it is inevitable that there will be difficulties in finding a date and time convenient for the large number of people involved in the operation of a major council—up to 30 people on each side in the larger councils, not counting the independent members. There will also be occasions when members cannot attend through sickness or other matters beyond their control. Increasing the number of independent members who can be drawn on will make it easier to achieve a fuller presence at meetings which have to decide questions of considerable importance to the industries concerned.

Once again I wish to assure your Lordships that we are not seeking to influence councils' decisions by filling the independent members' posts with our friends. Had we wanted to do that, three friends would have been just as effective as five. Our aim is merely to avoid criticisms made in the past, particularly by the retail industry, that important questions had to be decided with the assistance of only one or two independent members. We do not intend that the Secretary of State will proceed to appoint five independent members of each council. Three members are likely to continue to be adequate for many councils, particularly the smaller ones.

The noble Lord, Lord McCarthy, made great play in debate of the fact that we have said that it is difficult to find people to sit as independent members, and that is surely one other reason why we would not do what he claims we intend to do.

I hope that I can dispel from the minds of noble Lords the thought that there is some dark and sinister plot in these proposals. There is no such thing. We merely propose this modest measure to make the operation of the councils rather smoother when inevitably one or two of the existing independent members cannot be present.

I hope that the noble Lord will feel that his fears have been assuaged and that he will now seek leave to withdraw the amendment.

Lord Rochester

My Lords, with the leave of the House, may I ask the noble Lord, Lord Trefgarne, whether he will respond to the point of substance that I made?

Lord Trefgarne

My Lords, if I have your Lordships' permission, may I apologise to the noble Lord, Lord Rochester, for not dealing with that point? I have complete sympathy with the point that he made. Perhaps I may take some advice on how we could give effect to that sympathy and write to him.

Lord Wedderburn of Charlton

My Lords, this is a much more difficult matter than the noble Lord suggests. I have tried as carefully as I could to note the points that he made. There are not many that are new. Most of them fall within my compass. He said about our amendment—this seems to be the only point of substance, and it is a new point because it is a new amendment—that two additions to the wages councils would be made by the Secretary of State on the proposal of, or at the request of, the wages council. That is true.

The noble Lord then posits the case that where the two sides were tied the independent members would have the casting vote on the matter. Inferentially, he seems to suggest that they would keep themselves in power and prevent further independent members being appointed. If that scenario arose, the Secretary of State would have an easy remedy in his hands through the terms of appointment of independent members. It would clearly be improper in all sorts of ways.

I do not believe that I can do other than turn on the Government the argument that they have so often turned against us when we have moved amendments, slightly better drafted than theirs; namely, that in practice it would not be a problem. It is clearly not the root of the problem. It is clearly not the reason why they want five. Five could gang up, equally improperly, although not involving the same machinery. The fact that there are 30 people on each side and that it is difficult to make a date in the diary is not very compelling.

The noble Lord refers to sickness. If he will guarantee to me that four of the five will not go down with influenza more often than two of the three, we will take it. But that is surely not the reason. They do not want to pack the wages councils with their friends. I am not sure that I have read that anyone has ever said that. Nor is it a dark and sinister plot. Quite frankly, we do not expect many dark and sinister plots from the Government. What one gets are clumsy manoeuvres that come out in the open. This one came into the open rather late. I do not know that the noble Lord, or even the Secretary of State, is the author. But somewhere, somehow, there is a reason for this that has not been properly debated. That is our belief. We feel, therefore, that this is a matter, if noble Lords will think of the balance of the arguments, on which, even at this late stage, opinion should be tested.

5.21 p.m.

On Question, Whether the said amendment (No. 26) shall be agreed to?

Their Lordships divided: Contents, 60; Not-Contents, 135.

Ardwick, L. Kirkhill, L.
Barnett, L. Listowel, E.
Birk, B. Llewelyn-Davies of Hastoe, B.
Blease, L. Lovell-Davies, L.
Blyton, L. McIntosh of Haringey, L.
Boston of Faversham, L. Milner of Leeds, L.
Bottomley, L. Mulley, L.
Brockway, L. Nicol, B.
Caradon, L. Northfield, L.
Cledwyn of Penrhos, L. Parry, L.
David, B. Phillips, B.
Davies of Penrhys, L. Pitt of Hampstead, L.
Dowding, L. Ponsonby of Shulbrede, L.
Elwyn-Jones, L. [Teller.]
Ennals, L. Prys-Davies, L.
Ewart-Biggs, B. Rhodes, L.
Fisher of Rednal, B. Serota, B.
Gallacher, L. Shackleton, L.
Glenamara, L. Shepherd, L.
Graham of Edmonton, L. Silkin of Dulwich, L.
[Teller.] Stoddart of Swindon, L.
Hatch of Lusby, L. Strabolgi, L.
Heycock, L. Taylor of Blackburn, L.
Houghton of Sowerby, L. Taylor of Mansfield, L.
Hughes, L. Underhill, L.
Irving of Dartford, L. Wallace of Coslany, L.
Jacques, L. Wedderburn of Charlton, L.
Jenkins of Putney, L. Wells-Pestell, L.
John-Mackie, L. White, B.
Kearton, L. Willis, L.
Kilbracken, L. Ypres, E.
Aldington, L. Drumalbyn, L.
Alexander of Tunis, E. Elles, B.
Ampthill, L. Elliot of Harwood, B.
Arran, E. Elliott of Morpeth, L.
Auckland, L. Elton, L.
Bauer, L. Faithfull, B.
Belhaven and Stenton, L. Fanshawe of Richmond, L.
Beloff, L. Ferrers, E.
Belstead, L. Forbes, L.
Bessborough, E. Fortescue, E.
Birdwood, L. Fraser of Kilmorack, L.
Blake, L. Gainford, L.
Blyth, L. Gardner of Parkes, B.
Boardman, L. Geddes, L.
Boyd-Carpenter, L. Glanusk, L.
Brabazon of Tara, L. Glenarthur, L.
Brougham and Vaux, L. Gray of Contin, L.
Broxbourne, L. Gridley, L.
Butterworth, L. Hailsham of Saint
Buxton of Alsa, L. Marylebone, L.
Caccia, L. Halsbury, E.
Caithness, E. Harmar-Nicholls, L.
Cameron of Lochbroom, L. Harvington, L.
Campbell of Alloway, L. Henderson of Brompton, L.
Campbell of Croy, L. Hives, L.
Carnegy of Lour, B. Holderness, L.
Carnock, L. Home of the Hirsel, L.
Cathcart, E. Hood V.
Clinton, L. Hooper, B.
Colwyn, L. Hunter of Newington, L.
Constantine of Stanmore, L. Hylton-Foster, B.
Cork and Orrery, E. Inglewood, L.
Cowley, E. Kimball, L.
Cullen of Ashbourne, L. Knollys, V.
Davidson, V. Lane-Fox, B.
De Le Warr, E. Lawrence, L.
Denham, L. [Teller.] Layton, L.
Derwent, L. Long, V.
Dilhorne, V. Lothian, M.
Lucas of Chilworth, L. St. Davids, V.
Lyell, L. Saltoun of Abernethy, Ly.
Macleod of Borve, B. Sanderson of Bowden, L.
Mancroft, L. Sandford, L.
Margadale, L. Sandys, L.
Maude of Stratford-upon- Selkirk, E.
Avon, L. Sempill, Ly.
Merrivale, L. Shannon, E.
Mersey, V. Skelmersdale, L.
Middleton, L. Somers, L.
Milverton, L. Stanley of Alderley, L.
Montgomery of Alamein, V. Stodart of Leaston, L.
Mottistone, L. Strathcona and Mount Royal,
Munster, E. L.
Murton of Lindisfarne, L. Sudeley, L.
Newall, L. Swinton, E. [Teller.]
Norfolk, D. Terrington, L.
Nugent of Guildford, L. Thomas of Swynnerton, L.
Onslow, E. Todd, L.
Orr-Ewing, L. Tranmire, L.
Peyton of Yeovil, L. Trefgarne, L.
Portland, D. Trumpington, B.
Portsmouth, E. Vaux of Harrowden, L.
Radnor, E. Vickers, B.
Rankeillour, L. Vivian, L.
Renton, L. Westbury, L.
Rochdale, V. Whitelaw, V.
Romney, E. Wise, L.
Rugby, L. Young, B.
St. Aldwyn, E. Zouche of Haryngworth, L.

On Question, amendment agreed to.

5.30 p.m.

[Amendment No. 27 not moved].

Schedule 6 [Transitional provisions and savings]:

Lord Trefgarne moved Amendment No. 28:

Page 43, leave out lines 11 to 19 and insert— ("4.—(1) Where at any time during the period of two years ending with the date of an offence under section 16(3) of this Act an order under section 14 of the 1979 Act applied to the worker in relation to whom the offence was committed, or to any other worker employed by that worker's employer, section 16 of this act shall have effect in relation to any such time as if—

  1. (a) in subsections (4) and (7), any reference to any other failure on the part of the employer to pay an amount of remuner-ation equal to, or exceeding, the statutory minimum remuneration provided for a worker by an order under section 14 of this Act were a reference to any failure on the part of the employer to pay an amount of remuneration equal to, or exceeding, the remuneration for the time being fixed in relation to a worker by an order under section 14 of the 1979 Act or by a permit under section 16(1) of that Act;
  2. (b) in subsection (5), the reference to the statutory minimum remuneration so provided were a reference to the remuner-ation so fixed; and
  3. (c) subsection (6) were omitted.
(2) For the purposes of subsections (4) and (5) of section 16 of this Act, as they have effect in accordance with sub-paragraph (1), the following matters, namely—
  1. (a) the question whether an employer has failed to pay an amount of remuneration equal to, or exceeding, that fixed by any such order or permit under the 1979 Act as is mentioned in that sub-paragraph, and
  2. (b) the amount referred to in subsection (5)(6), shall be determined in accordance with sections 17 and 18 of the 1979 Act, and not in accordance with sections 17 and 18 of this Act.").

The noble Lord said: My Lords, this amendment— and I should like, with your Lordships' permission, to speak at the same time to Amendment No. 30—omits the transitional provision dealing with the position where the two-year period during which arrears may be claimed on a prosecution for failure to pay the statutory minimum straddles a period when the 1979 Act applied and a period when the Bill applied and replaces it with an improved version. I beg to move.

[Amendment No. 29 not moved.]

Lord Trefgarne moved Amendment No. 30:

Page 43, line 23, leave out from beginning to ("and") in line 24 and insert ("an amount of remuneration less than that fixed by any such order or permit under the 1979 Act as is mentioned in paragraph 4(1)").

The noble Lord said: My Lords, this amendment follows the one to which I have just spoken. I beg to move.

Lord Trefgarne moved Amendments Nos. 31 to 34:

Page 44, line 2, after ("affect") insert— ("(a)")

Page 44, line 3, after ("(1)") insert (", or (b) any right of a worker to any annual holidays or to any holiday remuneration in respect of those holidays,").

Page 44, line 10, after second ("of) insert (", or in connection with,").

Page 44, line 14, at end insert— ("() Without prejudice to the generality of sub-paragraph (1), an order under this paragraph may make provision in connection with preserving the effect of rights to which paragraph 5(4)(b) above applies.")

The noble Lord said: My Lords with your Lordships' permission I should like to move Amendments Nos. 31 to 34 en bloc. This group of amendments relates to the accrued rights of workers to holidays and holiday pay at the date a wages order ceases to apply to them. Wages council workers are not entitled to paid holidays in their first year of service. The rights they accrue in each year are based on length of service and are allowed in the following year. Schedule 6, as at present drafted, enables the Secretary of State to make an order preserving such accrued rights as at the date a wages order ceases to apply to a worker. As it would have been impossible to make such an order on the date of Royal Assent and for it to take effect from that date, provision was made for it to have retrospective effect. However, as workers under the age of 21 are to be excluded from the system from Royal Assent, problems are likely to arise in safeguarding their rights through an order made at some future date.

The amendments therefore preserve the accrued holiday entitlement for under 21s as at the date of Royal Assent and for other workers as, at the date that the relevant wages order ceases to apply to them. The existing provision enabling the Secretary of State to make an order has been retained as a safeguard should it prove necessary at some future date to clarify the preserved rights provision.

Amendments Nos. 31 to 34 further secure workers' accrued rights to holidays and holiday pay in the cirumstances I have described. I ask your Lordships to agree to them. I beg to move.

Lord Wedderburn of Charlton

My Lords, we welcome these amendments. We are grateful to the Minister for explaining them so clearly. They are of some complexity, but it shows that complexity is sometimes worthwhile. These amendments, in preserving the accrued rights of the workers concerned, and especially of holiday rights, and the rights of workers under 21, are a crumb or a morsel for which we are grateful and are an improvement to the Bill.

Lord Trefgarne

My Lords, I beg to move that this Bill do now pass.

We have had a number of interesting debates. If I may say so, I think that your Lordships have considerably benefited from the expertise of the noble Lords, Lord Wedderburn and Lord McCarthy, and the noble Baroness, Lady Turner, not to mention a number of other noble Lords who have spoken on this Bill. I am bound to say that some of the matters which we have discussed are matters with which I myself, at the outset at least, was not familiar. I too am now better informed on these matters. I am grateful to all those noble Lords who have helped at least in my education process. I am also grateful for the construc-tive way in which amendments have been proposed from all quarters of the House. I beg to move.

Moved, That the Bill do now pass.—(Lord Trefgarne.)

Lord Wedderburn of Charlton

My Lords, it would be churlish not to thank the noble Lord for his kind words and to say that there have been moments when some of the complexities and difficulties of the Bill have made us feel that we wish to join him in search of small ships, wide ships, fat ships and thin ships. It has sometimes been a difficult Bill. However, we cannot change our view that it is a Bill which is for low wages and for the removal of protections from vulnerable workers. The Bill differs from much of the Government's previous employment legislation. It is a Bill which is primarily about workers who are either not strongly organised in trade unions, or whose collective bargaining machinery does not function in the way which protects them as well as many other sectors of the workforce.

First, there are the workers who have deductions made from their wages. Even today we have regretted the Government's inability to retain a modicum of that protection which we have seen in our law, albeit imperfectly drafted and circumscribed in the law of 1896. Need of improvement was clear. Yet the Government were unable to retain any part of the protection of reasonableness that the law has put forward for so many years. There are the garage attendants whose money is stopped for shortages for which there is no responsibility in anyone's moral code but simply because their contracts say so—and when their employer likes to do it. There is the case of the 18-year-old Anthony Barratt in the High Court, and other cases. There are instances from the Low Pay Unit, such as that of the young petrol attendent who worked seven days a week, took home £48 a week, and was constantly being charged "shorts"—as it is known in the trade. In the Citizens' Advice Bureaux cases there is the evidence that workers in these sectors of the labour market have to take such jobs as they can find on any conditions of employment. I have had sent to me many cases from law centres since the beginning of our debates in this House.

This situation has a moral side as well as a straight-forward employment, economic and social aspect. It seems to us to be quite immoral to remove from workers in this position the legal protection of reasonableness unless there is a very strong reason. The Government admit that there is a problem. Although they have never used these words, they must have said to themselves, "Yes, in the retail trade the position is so bad that, in spite of those employers who try to persuade us otherwise, there must be a limit of deductions to 10 per cent. per week, except where the employer dismisses." We have heard again today that the situation where the employer dismisses can include a case where the employer dismisses unlawfully and without any proof that the shortage exists.

There are many who have pressed upon me that this Bill is a positive incentive to employers to dismiss in these sectors of employment. Until recently I had thought that perhaps that went too far. However, I am now persuaded that there will be many situations in which the threat of dismissal will be a consequence of this Bill. An employer—who no doubt would not come within the concept of any of us of a good employer—who has one of these clauses in the contract of employment of a workers says, "I shall stop 80 per cent. of your wages this week for cash shortages." The worker, who has been to hear a debate in the House of Lords, says, "You cannot do that. I am a retail worker with a 10 per cent. limit. I am protected." The employer says, "You talk to me like that and you will get the sack. If you get the sack, I can deduct the lot. Which would you rather have?"

If the noble Lord thinks that that is an impossible scenario, let him try working in a shop occasionally. Noble Lords will find that the odd employer will do that—perhaps more than the occasional one. Indeed, if the employee is then sacked, we say (just as in the case of complaining about a wages council) that that must be an unfair dismissal. The Government say, "Not a bit. That will be extending the right of unfair dismissal unduly wide." Yet this is supposed to be a Bill to protect the workers. Of course it is nothing of the kind.

The facility of cashless pay by repeal of the Truck Acts and 10 other statutes, or parts of statutes, on which almost no word has been said, has no justification. The repeal of those provisions amounted to no more than a fit of blind deregulation. On 6th June (at col. 1207 of the Official Report) the Secretary of State gloried in the fact that this one enactment replaced 13 whole Acts, more than 20 orders and parts of other legal instruments.

It is a curious belief that to get rid of legal regulation will have a beneficial effect. What is the beneficial effect? We also come to that in Part II. It is the same beneficial effect which Part II is said to have and with which I shall deal in a moment: that since 1909 2¾ million workers on low pay have been protected by wages councils; four-fifths of them have been women; two-thirds have been part-timers; one-fifth of all young people in full-time employment entering employment in these industries. The rates are £63 to £72 a week for 1985—because I am giving the Government's own figures from the consultative documents; earnings are at or near £1 million.

In clothing manufacture today the 1986 statutory minimum rate is £70. The vast majority of countries in Western Europe pay their minimum adult wage to workers aged 18 and over. The only country which the Government quoted in their consultative document in relation to the payment of the adult rate is Holland, where the rate is paid at the age of 23. That says something about the Government's attitude to evidence, to which I want to return. The Government never put forward the evidence, and when the evidence is put forward to them, they ignore it. Under this Bill workers under the age of 21 are to be withdrawn in this sector and thrown on to a labour market without any protection of wages councils' orders. So strongly did the Government feel about this that they denounced the ILO convention, especially in regard to young workers, who as the ILO study on minimum wage fixing said in 1984: are more vulnerable to possible exploitation due to their inexperience and perhaps because of their very desire to earn a living by finding a first job". Of course these industries are above average statistics in being the first jobs of young workers.

What is the explanation for this extraordinary behaviour on the part of the Government? The only justification worth debating has been that, to put it in the words of the noble Lord, Lord Trefgarne, who put it most succinctly on 26th June (at col. 433 of the Official Report): A central purpose of … the Bill is to promote employment". At col. 1207 on 6th June the Secretary of State said: this is a Bill to promote employment. It will do so by easing regulation of the labour market and removing burdens on employers. This will make it easier for them to get on with the job of creating wealth and employment". The first thing to notice about this claim—and it is this with which I wish to encapsulate our objection to the Government's approach to this matter in the Bill—is that it is not new. On 17th December 1979, the Secretary of State, when talking about one of the first measures to cut down employment protection rights, said that these clauses: have the purpose of reducing the burden imposed on employers, especially small employers. This burden, perceived and real, has been a deterrent to the employment of more people".—[Official Report, Commons, 17/12/79; col. 64.] The noble Earl, Lord Gowrie, on 28th May 1980 (at col. 474 of the Official Report), said: several clauses in the Bill seek to reduce the burden which the last Government's employment protection legislation imposed on employers", and the noble Earl went on to speak of the "Employment Destruction Act". The only explanation for the Bill as a whole, not merely as regards wages councils, is that the Government are putting forward the repeal of the Truck Acts' protections for workers on deductions and the emasculation of the wages councils as a way of creating jobs.

Yet again and again this has been refuted in the sense of the evidence that has been put to the Government again and again that this is not, in the case of some research anyway and in the case of a lot of research, more than a very vestigial way of increasing employment—certainly not on any basis is it a major way.

My noble friend Lord McCarthy put forward the various major studies on 8th July at col. 326 of the Official Report, and I shall not repeat them now. I shall not do so because, when my noble friend detailed them and spent more time than I can allow on them, the only reply he received from the Secretary of State was the noble Lord thanking him for his annual Dimbleby lecture on all the research on wages councils. We have not heard a better reply than that.

However, there is another point. The old government line used to include the other half of the truth. When he began, the noble Earl, Lord Gowrie (who used to speak of these matters perhaps a little more con brio) said not merely that getting rid of employment protection would increase employment or would encourage recruitment; but on 25th July 1979 he also said (col. 1942 of the Official Report): In the words of the old song: 'Something's got to give". This has become a famous passage in labour legislation.The noble Earl was speaking about unfair dismissal and its restriction, and said: and in our case it is the ability of our economy to sustain, without the raging inflation which has the same job destroying effects in the end, the levels of employment to which we have become accustomed". The Government were quite clear from the beginning that they were no longer attached, that they no longer identified themselves with that thrust of policy which has been present in virtually all governments since the war—namely, the desperate need to retain the Beveridge concept of pursuing and the White Paper concept of pursuing full employment. The Government knew that that would change; the Government said at the beginning that that would change. It is only recently that the Government have gone on destroying employment protection legislation without mentioning the second half of the proposition. Yet as they have continued to destroy employment protection legislation, unemployment has risen, is still sticking and possibly will increase in toto, although we know that the noble Lord the Secretary of State has his eye on the statistics well enough to be able to say that by Christmas long-term unemployment may have dropped a little.

The removal of this legislation makes this Bill quite logical because if anyone is to suffer in the crisis—and there is a continuing crisis—it will be the poor more than the rich. It is always the poor more than the rich. It has been the poor more than the rich in all budgets since 1979. It has been the poor more than the rich in terms of social security. It will be the poor more than the rich when they can get their new controls over single payments for those on supplementary benefits; and the people whose wages are deducted under the new powers, the people whose wages council rate will go down, and the young workers under 21 who will have no protection of a wages council minimum will meet those who the Government are now about to prevent from having a single payment for a teapot or a blanket.

The only extraordinary thing about this Bill is the redundancy rebate provision in Part III. It is perhaps there that in a way one can acquit the Government of any dark plot, because who could have believed that, having decided that £200 million should be saved on redundancy rebates (it is understandable that a certain amount should still be paid out) this small sum which is to be paid out should be paid by a criterion which is measured by the presence or absence of 10 employees in an enterprise. If it were not so serious it would be almost a joke. We do not have a perfect solution to that problem, but we suggested to the Government that perhaps we could think along the lines of giving rebates to employers who were promoting policies of training, employment, and so on. Good heavens, no, that would be far too great a positive government intervention in the labour market!

Once again, even in regard to Part III the Government believe that if they can deregulate, if they can strip bare, especially the legal protections for working people, in the long-run—and I am sure that they are honest about this—employment and prospects will improve. We do not believe that long-run guess is right. We do not think the medium-term tactic has any merit, and we certainly do not think that the short-term measure in stripping those who are already vulnerable and in many cases exploited has political sense or any common decency or morality. This is a bad Bill and it will be a shame to see it enacted.

Lord Rochester

My Lords, your Lordships may be pleased to know that at this stage of our proceedings I do not intend to make a long speech; but there are a few things that I should like to say.

As the Bill progressed through its various stages in this House, my noble friends and I—for I think I may speak for them, too—have come to feel that it is a bad Bill. Its main purpose has been to prevent wages councils from exercising any functions for people aged under 21. The justification for this has been said by the Government to be that it will create more employment opportunities for young people; but as the noble Lord, Lord Wedderburn of Charlton, has just said, no conclusive evidence has been brought forward that it will produce anything more than a marginal increase in jobs largely at the expense of adults.

I have consistently supported the view that a limit should be placed on the percentage of the adult rate payable to young people. But that is not to say that they should be left, as they will be under the Bill, altogether without protection. We continue to feel there is a strong case for graduated scales of payment to be made for people aged under 21. One beneficial effect of this would be that it would make it less likely that someone in that age group, to use the Government's phraseology, having got his or her foot on the first rung of the employment ladder would be unceremoniously thrown off the ladder and be replaced, on reaching the age of 21, by someone younger at a much lower rate of pay.

We are no more pleased that in future wages councils will be empowered only to fix a single minimum rate and a single overtime rate. I recognise—and I have had some experience of this on the ground—that in the past wages council orders have often proved too detailed and there has been duplication and discrepancy as between one set of wages council orders and another. Our feeling is that provision should still be made for certain premium payments—for example, for work done on Sundays. We also feel it should be possible for wages councils to fix a minimum period for annual holidays.

When that subject was debated, the Government said it was a matter which should be left for agreement between employers and employees. But as my noble friend Lady Seear pointed out at that time, negotiation to be fair must be between parties which have equal weight. Negotiation which takes place between employers who have all the strength and employees who are altogether without protection is a very different thing.

In our view it has been the same in the matter of wages inspectors. The Government have been determined not to provide an adequate number to enforce what few wages orders will remain once this Bill is enacted. For many people, wages inspectors provide the only protection they have in the absence of collective bargaining through trade unions. Yet the Government have even opposed the concept that when a worker is dismissed because he has made a complaint to the wages inspectorate, that dismissal should be regarded as unfair. No wonder that on this side of the House many of us have reached the conclusion that this Bill is not really intended, as it purports, to be a measure for the reform of wages councils; rather is it the first stage in a process of allowing them to wither away altogether.

As regards Part I of the Bill—and here I must differ from the noble Lord, Lord Wedderburn of Charlton—we welcome the repeal of the Truck Acts, particularly because the extension of cashless pay will eliminate one of those differences between the employment conditions of manual workers on the one hand and white collar staff on the other, which are based on social distinctions which have long since become out of date.

Having said that, we are depressed by the unwilling-ness of the Government to accept any amendment aimed to ensure that deductions from wages should be fair and reasonable and equally we do not see why protection against excessive deductions from wages should not be extended to all employees rather than confined as now to workers selling directly to the public.

We remain dissatisfied that under Part III the payment of redundancy rebates should be restricted to firms employing fewer than 10 people. We think it wrong in principle to deny employers who have paid contributions into the redundancy fund the right to draw from that fund when faced with the very conditions for which the fund was created. Like the noble Lord, Lord Wedderburn of Charlton, we do not see why the criterion for determining whether or not redundancy rebate should be made should be dependent solely on size. There is no reason to suppose that firms employing a relatively small number of people are necessarily worse off financially than others.

In short, my Lords, we feel that this Bill is largely ill-conceived. On the main issue which it raises we remain firm in our belief that more jobs will not be created by entrusting the power of determining wages solely to employers. More employment opportunities will come about only when government employers and trade unions recognise their responsibilities and when there is a more general awareness that increases in pay on the part of all who are in employment must be matched by corresponding increases or improve-ments in productivity.

Despite our differences, my last word must be one of thanks to the noble Lord, Lord Trefgarne, and to the Secretary of State for Employment. We wish that perhaps we could have seen more of him than we have since this Bill has had so much to do with the element of deregulation which, as he so often tells us, is to be seen as the cure-all for our employment problems. But this is a moment for goodwill. He is a busy man. On behalf of my noble friends, I should like to thank both the noble Lord, Lord Trefgarne, and the Secretary of State for the courtesy with which they have enabled our exchanges on this Bill to be conducted.

6 p.m.

Lord Boyd-Carpenter

My Lords, at this the final stage of the Bill I should like to say a brief word of welcome to it. I always enjoy listening to the noble Lord, Lord Wedderburn of Charlton, because he always succeeds in putting with great clarity and force views with which I wholly disagree. Indeed, I often feel that he resembles Socrates because, as your Lordships may recall, Socrates was ultimately charged and condemned to death because of his habit of making the worse appear the better case. I sincerely hope that that resemblance will not cause me to have to administer a glass of hemlock and soda to the noble Lord, Lord Wedderburn of Charlton, in the Guest Room.

I disagree so fundamentally with his approach. What seems to me one of the good features of the Bill is one that he denounced. That is that it sweeps away a mass of legislation and of regulation. In general principle it surely must, in particular at a time of high unemployment, be a good thing to simplfy the legal background to the whole employment situation. A mass of complicated legislation, no doubt easily understood by great companies with high-grade professional advisers, is very difficult to follow for the small employer, whom it is the object of the Government very properly to encourage. It is very difficult for them to understand, and it is confusing. It is a good thing to sweep away a mass of legislation which, however good in its time, has served its term.

We are not in the situation in which we were when much of this legislation was enacted. On the contrary, we are in an era, alas, of high unemployment, and an era of, on the whole, high wages. In that totally different situation much of the legislation that this Bill will remove is positively harmful and damaging.

I am only sorry that it does not go further in respect of wages councils. I am inclined to think that in the present situation wages councils have fully served their term, and that there would be an advantage in removing them altogether. The Bill does, however, reduce their scope in a number of ways, as the noble Lord, Lord Wedderburn of Charlton, pointed out. I would point out that Clause 13(1) gives the Secretary of State power by order to abolish any further wages council that he desires to abolish. I say to my noble friend on the Front Bench that I hope that his noble friend will not be slow in exercising that power.

I know that the wages council system is dear to the industrial relations establishment, but it has little to do with the situation we are in today in which the great majority of the population are on high levels of remuneration, and indeed when much economic thought believes that a great many of our troubles, including the degree of unemployment, are directly related to the high level of wages and to the increases still taking place.

When we have at the same time heavy unemployment involving many people, including the young to whom the noble Lord opposite referred, who would far rather be employed at a modest wage than unemployed, wages councils seem to be a real obstruction in the way of the developments that we want to see. Therefore, I am glad to see that though the Bill does not go so far in this respect as I should like, and as I have advocated in this House before today, it gives my noble friend the power to deal with more of these councils, and I hope that he will not be hesitant in exercising it.

Finally, I would agree very much with the noble Lord, Lord Rochester, in expressing appreciation of the way in which this Bill has been handled from Government Front Bench. I think that my noble friend Lord Trefgarne will probably find it almost easier to go back to the fascinating question of the shape of a frigate.

Lord Trefgarne

My Lords, I am grateful to every noble Lord for their kind words to me personally. When we set out on the passage of this Bill I never really thought that I would be able to persuade the noble Lord, Lord Wedderburn, to agree with my views on the matter. The only risk was that I would be persuaded to agree with his. Happily I have avoided that fate, and happily most of your Lordships did not agree with the noble Lord either because the Bill has passed through your Lordships' House unscathed, and for that at least I am grateful. I beg to move.

On Question, Bill passed, and returned to the Commons with amendments.