HL Deb 07 July 1988 vol 499 cc402-12

3.48 p.m.

Lord Denham

My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Education Reform Bill, has consented to place her prerogative and interests so far as they are affected by the Bill at the disposal of Parliament for the purposes of the Bill.

On behalf of my noble friend I beg to move that this Bill be now read a third time.

Moved, That the Bill be now read a third time (Lord Denham.)

On Question, Motion agreed to; Bill read a third time.

Clause 1 (Duties with respect to the curriculum):

Lord Morton of Shuna moved Amendment No. 1: Page I. line 18, after ("Curriculum") insert ("and by Chapter III with respect to local financial management and staffing").

The noble Lord said: My Lords, it may be for the convenience of the House if, in moving this amendment, I speak also to Amendments Nos. 27, 106, 107, 109 and 118. These amendments raise a central issue of uncertainty left in the Bill as it is at the moment. They relate to the likely changes in employment law which the Government expect to be made after Royal Assent under the broad powers in Clause 220. Throughout the passage of the Bill your Lordships have heard only the briefest details of how the Government intend to use that power.

The amendments which we propose are designed to introduce a proper process for the use of that power to enable Parliament to be properly informed as to the likely extent of the use of the powers. The amendments have the following effects. First, any order made after Royal Assent to change the provisions of employment law under local financial management would need to be made by affirmative resolution. Secondly, any order made under Clause 220 would need to be made within three months of Royal Assent and would contain the adjustments to employment law known by the Government at the date of Royal Assent to be necessary to correct the Bill. The amendment would not prevent the making of an order under Clause 220 or affect the extent of the power. It would merely impose a process and prevent a wide-ranging power from being held by ministers for an indefinite period.

Noble Lords may recall from earlier debates on employment provisions that concern was expressed about two issues. The first of those was the continuing split between employer and management roles in schools. The governing bodies of schools and further education colleges will be given extensive power to hire, fire and discipline staff. However, they will not be the employer and will not bear responsibility for their decisions. For example, if a person is unfairly dismissed by a school governing body, the local education authority will, according to the Bill, be liable to pay any compensation awarded by an industrial tribunal without having taken any part in the decision to dismiss.

The Bill, in Clause 220, gives the Secretary of State wide-ranging powers to amend employment law when he considers it necessary or expedient as a result of local financial management. That gives him an extraordinary degree of discretion in a very complicated and controversial area of the law. At earlier stages of the Bill we gradually obtained some impression of what the Government intend in that matter. They apparently accept that the Bill creates a problem in giving governing bodies powers in relation to employment without giving them the responsibility for paying for them. The Government propose to correct that anomaly by one or more orders under Clause 220.

The key point is that the Government have failed to acknowledge the known consequences on the face of the Bill. They propose to deal with them by orders which are subject to the negative resolution procedure only. We must assume that the Government, because of their own policies, are unwilling to place on the face of the Bill the major responsibilities which will now be placed on governing bodies. Schools and their budgets could potentially become liable for compensation and other penalties under employment law. Surely the Government owe it to the governing bodies, which are to take the major new role under the Bill, to make clear that they are not receiving power without responsibility—something for nothing—under the legislation.

The Government have acknowledged the case for increased training for governors to enable them to manage budgets and meet their new responsibilities. In that context, nothing has been said of the Government's apparent intention to make governing bodies of even small primary schools as liable as any employer to the penalties and pitfalls of employment legislation. Quite apart from the dangers to employees' individual rights, the potential effect on a governing body which strayed by accident into a case before an industrial tribunal could be very serious. Depending on the precise terms of the order, the governors could be liable to pay compensation from the school's budget. The cost of a punitive award could be disastrous to the level of educational provision in the school in the succeeding financial year.

The Government have issued a draft consultative document which says that orders will be made and that it will be appropriate for a governing body to appear before an industrial tribunal to defend its action if a dismissed member of the staff complains of unfair dismissal. However, it does not state clearly that it is the governing body which will pay or how it will obtain the money to pay. I suggest that the House should attempt to clarify the position, as these amendments do, and restore some form of certainty to governing bodies.

The issue that remains to be resolved is what responsibilities will pass from the local education authorities to the governing bodies. For example, will governing bodies have questions of unfair dismissal of teaching and non-teaching staff to deal with? Will they have questions of redundancy, including the criteria for selection for redundancy, to deal with? Will they have to deal with wrongful dismissals, claims under contract for use of inappropriate procedure and questions arising under the race relations and sex discrimination legislation? Will they have to deal with questions of time off for recognised activities such as acting as a justice of the peace? Will they have to deal with appointment procedures and health and safety at work procedures, taking the employer's role under the legislation? Will they have to deal with the maternity provisions contained in legislation?

Are those areas of activity which governing bodies will take on? If so, the governors will require quite a bit of training. Where will that training come from and where do we see in the Bill that that is what the Government intend? Are the Government telling the people who will become governors that they are taking on those responsibilities? To what extent do the Government propose to make the governors fully liable for the consequences of their decisions? Will they have to pay damages which may be awarded or do they simply have to appear at industrial tribunals, leaving it to the local education authority to pick up the bill?

After orders are made under Clause 220, where do the Government believe that people with contracts of employment in either teaching or non-teaching positions in schools will look for their employer? I suggest that it is contrary to employment law to split the role of employer and to say: "This is the person you must look to for that but somebody else bears the responsibility". That is what appears on the face of the Bill. Our amendments attempt to make the matter clear. They are designed to get the Government to come clean, so to speak, and give the House, by making affirmative procedure necessary, a chance to debate the matter. We are in no sense opposed to the principle of financial delegation. We are merely questioning how the principle will work. I beg to move.

4 p.m.

Lord Rochester

My Lords, I am glad to support the amendments. The case for them has been so well presented by the noble Lord, Lord Morton of Shuna, that I propose to make only a few remarks concerning general points about the operation of Clause 220. When the subject of employees' rights was discussed on Report, I said that it was regrettable that the Government had not, by that time, tabled their promised amendment under which they were to ensure that there would be consultation with relevant interests before any order was made to modify employment law during financial delegation.

In Committee it had earlier been made plain that, because of the operation of what is now Clause 220, in the case of unfair dismissal a governing body would have to answer for its actions before an industrial tribunal, as the noble Lord, Lord Morton, has already reminded us. However, since the Government had proved unwilling to specify in the Bill precisely what were the items of employment legislation that governing bodies would have to implement, I asked the noble Baroness, Lady Hooper, to tell us what rights other than those pertaining to unfair dismissal the Secretary of State had in mind.

In reply, the noble Baroness said, among other things, that the Government intended to use the power given to the Secretary of State so that governors were subject to the provisions of the Equal Pay Act and other provisions of employment legislation. She did not spell out what those other provisions were. Similarly, the Department of Education and Science, in stating its intentions regarding the clause in its consultation paper, has given only examples of the responsibilities which will in practice be exercised by governing bodies under financial delegation.

The government amendment to which I have referred was subsequently tabled but in substance proved to be even less communicative about their thinking. I must therefore ask why the Government are so cagey about this? Are they fearful of disclosing to Parliament the full extent of the new responsibilities that are to be placed on governing bodies? Do they think that to do that would deter prospective governors from coming forward? They must have given a great deal of thought to this subject. I suggest that the House is entitled to know what their intentions are in this regard.

Against that background, the extent to which these amendments seek to limit the Secretary of State's powers seems to me to be the very least that the House should now require. First, in my view it is essential that the modifications in employment law which the Secretary of State seeks to make by order should be specified within the limited period of three months following Royal Assent and confined to those he considers necessary or expedient at the time the Act is passed. That would at least ensure that neither the present Secretary of State nor any of his successors could without further primary legislation for an indefinite period effect more legislative changes of which none of us is now aware.

Secondly, I am convinced it is right that in place of the present proposal that the Secretary of State's powers can be challenged only by negative resolution, the Minister should be obliged to obtain the agreement of both Houses to his proposal. That would ensure that they are adequately debated and have positive parliamentary approval before they are implemented.

In this Bill there are many instances of the executive assuming powers that we on these Benches consider damaging to the democratic process. But the power that the Secretary of State proposes to take in this instance is perhaps the most harmful of all. That is because, in the long run, it could take from employees rights that they have acquired over many years and have been hard won. I therefore urge the House, by means of these amendments, to make sure that that power is constrained.

Earl Baldwin of Bewdley

My Lords, this is the infamous clause which gives the Secretary of State powers far beyond anything that he might need to achieve the results on which, on the whole, we are all agreed. We have hunted it through its various name changes—from Clause 186, to 189, to 220—and we are still on the scent.

I am genuinely surprised—and that is not a mere rhetorical phrase—that the Government are still unaware of the effects of such widely drawn powers. Under those powers the Secretary of State can still make any changes he wants in the application of any laws relating to employment under local financial management, provided only that he considers it expedient or necessary and that he consults about them.

Let each Member of the House envisage those powers in the hands of his or her least favourite politician of the opposite party. As the clock ticks metaphorically towards midnight, the Government can still calm our legitimate fears by accepting this restriction on timing and method even if they will not do so in respect of the scope of the powers concerned.

Lord Trefgarne

My Lords, the House will, I know, be grateful to the noble Lord, Lord Morton, for agreeing to group the amendments in the way that he has. I shall deal with them in the order in which they appear on the Marshalled List, 1 hope that that will be in accordance with your Lordships' wishes.

Amendment No. 1 seeks to write a reference to local financial management into Clause I of the Bill. That is the clause that sets out the responsibilities of the Secretary of State, local education authorities, school governing bodies and head teachers with regard to the curriculum in maintained schools.

Although this amendment is supportive of measures to which we are fully committed, I I think that it is unnecessary. The sentence in Clause 1 to which it would be added lays upon those various parties the duty "to exercise their functions" in such a way that the curriculum in maintained schools conforms to the general requirements laid down later in the clause. The reference to the various parties' "functions" includes everything that Chapter III has to say on local financial management and to spell it out would, I believe, be unnecessary.

The proposed insertion would also be unhelpful because it would confuse the structure of the Bill. Chapter 1, in which the insertion would occur, is concerned with the curriculum. Its opening clauses of course function as a preamble to the entire Bill, since everything else that may be said or done about schools must focus upon the central issues of this chapter, the nature of the curriculum and of its delivery to pupils. But this does not mean that everything that occurs in this legislation should be recited in these opening pages.

Its influence upon areas of the Bill that are not immediately concerned with the curriculum is indirect. That is why the existing explicit reference to the specific questions of religious education and the national curriculum is appropriate at that point; but to make reference forward to provisions for local financial management in schools would not be.

The proposed amendment would clutter the opening of the Bill with matter not necessary at that stage, doing no service to the issue of local financial management, downgrading by implication those issues that are not mentioned there, and obscuring the question of the curriculum, which is the opening chapter's central concern. For these reasons, I hope that that amendment will not be pressed.

Turning now to Amendment No. 27, I am grateful to the noble Lord for explaining the intention behind this point. I must say however that we were in a little degree of difficulty because I think that there is a misprint in the way that the amendment appears on the Marshalled List. Nonetheless, I think that I understand what it means, and I must say that I think that this amendment likewise is unnecessary.

Before any order can be made under Clause 220 my right honourable friend the Secretary of State must consult all those bodies listed in Clause 220. Inserting a reference to that clause in Clause 42(3) will not make that consultation any wider. Therefore I can assure the noble Lord that there are no circumstances in which an order under Clause 220 could give further powers or duties to governors without consultation. I hope that that assurance will be of value to the noble Lord.

Turning now to Amendments Nos. 106, 107, 109 and 118, those amendments alter the clause in two key ways. First, Amendment No. 118, the intention of which is reflected in Amendments Nos. 106 and 109, would make orders under the clause subject to the affirmative resolution procedure, a point which has been referred to by every noble Lord who has spoken. Secondly, Amendment No. 106 would provide for the order-making power to elapse after a period of three months after Royal Assent. That idea of a time-limit on the operation of the clause is then supplemented by Amendment No. 107, which would limit the modifications to be made to those modifications which the Secretary of State considered at the time of Royal Assent were necessary.

Turning to Amendment No. 118, we do not accept that there is a need for orders made under Clause 220 to be subject to the affirmative resolution procedure. We have explained at length that this clause is a technical provision designed to allow the Secretary of State to modify employment law so that the operation of that law is not in any way hindered or made difficult by the operation of financial delegation. There is no question of this or any other Government being able to use this clause to make drastic changes to employment law in a low-key way without public scrutiny. The amendment that we introduced which requires statutory consultation before an order is made will ensure that the process of making an order is fully public at all times. It will then be open to any Member of either House of Parliament to pray against the order. In our view this is sufficient protection so far as concerns this clause. There is no need to go further and require the approval of orders by resolution of each House.

I turn to Amendment No. 106. I have to say that we cannot accept that there should be a time-limit on the use of the power given by the clause to the Secretary of State. On previous occasions we have made clear that we may need to modify the law in the light of problems which the experience of financial delegation in practice may throw up. Amendment No. 106 would not allow us to do that. If a problem arose a little time after a school had a delegated budget there might be nothing that we could do about it. Indeed, there would be nothing that we could do about it if this amendment were to be agreed. Your Lordships cannot believe that that would be a desirable state of affairs. Amendment No. 107 is therefore unacceptable for the same reason.

We are of course now considering what modifications it may be appropriate to make under the clause after the Act has been passed, but we must retain the power to make further changes if that proves necessary in the light of experience. We cannot possibly foresee every eventuality now. Furthermore, we need to consult carefully before we make any order. The Government had always intended to do that. It is only right that those parties concerned and those who have experience in the areas of the law in question should have an opportunity to comment on any proposals for orders.

We introduced an amendment at Report stage requiring statutory consultation with several parties, including the local authority associations, teachers' associations and representatives of the governors of voluntary schools. That consultation will take a little time. We are unlikely to have reached final decisions by the time that this Bill receives Royal Assent.

At this point I should like to draw your Lordships' attention to two points concerning this clause and the power that it gives to the Secretary of State. First, I draw attention to the word "modifications" in the first line. That is an important word with a precise meaning. It does not mean any change that the Secretary of State cares to make. Repealing a provision or drastically altering its effect for certain employees would not constitute a modification of that provision. A change cannot be described as a modification if it does not preserve the essential purpose of the provision. This is an important constraint on what can be done under this clause.

Secondly, the power is not in any way unprecedented. As we have pointed out on previous occasions, the Labour Government included in the 1978 Employment Protection (Consolidation) Act a provision enabing the Secretary of State to modify sections of that Act.

To conclude, let me repeat that Amendments Nos. 106 and 107 would severely restrict the Government's ability to modify employment law in ways which may be necessary in the light of experience. I think that we should be irresponsible to accept them. In our view Amendment No. 118 and its consequential amendment, Amendment No. 109, are simply unnecessary. There is no need for the affirmative resolution procedure to apply to orders under this clause and I hope that the House will reject all those amendments.

The noble Lords, Lord Morton of Shuna and Lord Rochester, and the noble Earl who also spoke referred to various points. For example, the noble Lord, Lord Rochester, expressed concern about employers' responsibilities and the possibility of somebody else taking them on. However, this type of provision is not new. In aided schools, under existing law LEAs are required to appear before an industrial tribunal where they require the governors of a voluntary aided school to dismiss a teacher though the governors are that teacher's employers. Again, this ensures that those who take the decisions are answerable for them.

I think that a similar point was in the mind of the noble Lord. Lord Morton, when he wondered who would pay the compensation if such a case went against the LEA or the school concerned. The answer is that the LEA can charge the cost of dismissals to governors if it has good reason to do so, but it is not obliged to do so if it does not see any good reason. There is therefore a degree of flexibility in that situation which I hope the noble Lord will find helpful. I hope that I have dealt with the concerns in the minds of noble Lords about these matters and that the amendments will not be pressed.

Lord Murray of Epping Forest

My Lords, I think it is impossible to understand the concern felt by the staffs of our schools without realising the apprehensions that have been aroused by this Government's removal of their negotiating machinery. Above all, it is that which worries them.

Lord Belstead

My Lords, perhaps the noble Lord will forgive me for interrupting, but the Companion says that on Third Reading after the Minister has spoken noble Lords should not intervene. All the speeches ought to come before the Minister rises, and he then replies. Then of course there is the right to reply of the noble Lord who originally spoke. On this occasion, as this is my first intervention this afternoon, perhaps the noble Lord would like just to make his remarks, drawing them swiftly to a conclusion, and we could then stick to that point.

Lord Murray of Epping Forest

My Lords, I apologise to the House for my rather intemperate contribution. I think I made the essential point in my first sentence. I am grateful to the Leader of the House for his mercy and I thank your Lordships for listening to me.

Lord Morton of Shuna

My Lords, I am very grateful for the support that I have received from the noble Lord, Lord Rochester, the noble Earl, Lord Baldwin, and my noble friend Lord Murray of Epping Forest. I must say to the Minister that he has not moved anywhere on this issue which we have already discussed on Second Reading, through Committee stage and at Report stage. Noble Lords have all been telling him that there is a very big problem about this issue but the Government appear to have shut their eyes to it and only reached the stage of issuing a consultative document.

According to the Minister, these powers would constrain the ability of the Government. I wonder whether he is aware of the Government's amendment, Amendment No. 116, tabled in the name of his noble friend Lady Hooper. Do the Government intend to press that amendment later this evening? It gives a fairly wide power to do all sorts of things. However, perhaps that would not be applied in this instance. It may be that he considers that amendment not in point. However, it does not really matter.

In our view, it is essential that drastic changes which may be made in employment law should be made by affirmative order and not by negative resolution. The Government must know the basic framework of the changes they intend to make in employment law for governing bodies to deal with this problem, so they should at least come out and say so. They have had this Bill for some considerable time. They know that they will have to make orders but they cannot tell us what will be in those orders. It is for that reason that I must press the amendment.

4.20 p.m.

On Question, whether the said amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 104; Not-Contents, 146.

DIVISION NO. 1
CONTENTS
Airedale, L. Gladwyn, L.
Alport, L. Glenamara, L.
Amherst, E. Goodman, L.
Ardwick, L. Graham of Edmonton, L.
Attlee, E. Gregson, L.
Aylestone, L. Grey, E.
Baldwin of Bewdley, E. Grimond, L.
Banks, L. Hampton, L.
Bonham-Carter, L. Hanworth, V.
Bottomley, L. Harris of Greenwich, L.
Bruce of Donington, L. Hatch of Lusby, L.
Campbell of Eskan, L. Hayter, L.
Carmichael of Kelvingrove, L. Houghton of Sowerby, L.
Carter, L. Hughes, L.
Cledwyn of Penrhos, L. Hunt, L.
Cocks of Hartcliffe, L. Hylton, L.
Cudlipp, L. Jacques, L.
Dean of Beswick, L. Jay, L.
Diamond, L. Jeger, B.
Donaldson of Kingsbridge, L. Jenkins of Hillhead, L.
Dormand of Easington, L. Jenkins of Putney, L.
Elwyn-Jones, L. Kagan, L.
Ennals, L. Kilbracken, L.
Ewart-Biggs, B. Kirkhill, L.
Falkland, V. Leatherland, L.
Fisher of Rednal, B. Listowel. E.
Flowers, L. Llewelyn-Davies of Hastoe, B.
Gallacher, L. Lloyd of Hampstead, L.
Galpern, L. Lockwood, B.
Longford, E. Rugby, L.
Lovell-Davis, L. Russell, E.
McIntosh of Haringey, L. Russell of Liverpool, L.
McNair, L. [Teller.] Sefton of Garston, L.
Mais, L. Serota, B.
Mayhew, L. Shackleton, L.
Milner of Leeds, L. Stallard, L.
Mishcon, L. Stedman, B.
Molloy, L. Stewart of Fulham, L.
Morton of Shuna, L. Stoddart of Swindon, L.
Mulley, L. Strabolgi, L.
Murray of Epping Forest, L. Taylor of Blackburn, L.
Nicol, B. Tordoff, L.
Northfield, L. Underhill, L.
O'Neill of the Maine, L. Wallace of Coslany, L.
Oram, L. Wedderburn of Charlton, L.
Parry, L. Wells-Pestell, L.
Peston, L. White, B.
Ponsonby of Shulbrede, L. [Teller.] Williams of Elvel, L.
Willis, L.
Rathcreedan, L. Wilson of Rievaulx, L.
Rea, L. Winstanley, L.
Ritchie of Dundee, L. Winterbottom, L.
Rochester, L.
NOT-CONTENTS
Alexander of Tunis, E. Halsbury, E.
Ampthill, L. Hardinge of Penshurst, L.
Annan, L. Harmar-Nicholls, L.
Arran, E. Havers, L.
Auckland, L. Hesketh, L.
Beaverbrook, L. Hives, L.
Belhaven and Stenton, L. Home of the Hirsel, L.
Bellwin, L. Hood, V.
Beloff, L. Hooper, B.
Belstead, L. Hylton-Foster, B.
Bessborough, E. Ilchester, E.
Blatch, B. Ironside, L.
Blyth, L. Johnston of Rockport, L.
Bolton, L. Kaberry of Adel, L.
Borthwick, L. Keyes, L.
Boyd-Carpenter, L. Killearn, L.
Brabazon of Tara, L. Kimball, L.
Braye, B. Kinnaird, L.
Brougham and Vaux, L. Knutsford, V.
Broxbourne, L. Lauderdale, E.
Butterworth, L. Layton, L.
Caithness, E. Lindsay, E.
Cameron of Lochbroom, L. Lindsey and Abingdon, E.
Campbell of Alloway, L. London, Bp.
Campbell of Croy, L. Long, V.
Carnegy of Lour, B. Lytton, E.
Carnock, L. Mackay of Clashfern, L.
Cathcart, E. Macleod of Borve, B.
Coleraine, L. Mancroft, L.
Colnbrook, L. Margadale, L.
Constantine of Stanmore, L. Marley, L.
Cornwallis, L. Massereene and Ferrard, V.
Cowley, E. Merrivale, L.
Cox, B. Mersey, V.
Cullen of Ashbourne, L. Milverton, L.
Davidson, V. [Teller.] Morris, L.
De Freyne, L. Mottistone, L.
Denham, L. [Teller.] Mowbray and Stourton, L.
Dundee, E. Moyne, L.
Eccles, V. Munster, E.
Eden of Winton, L. Murton of Lindisfarne, L.
Elibank, L. Napier of Magdâla, L.
Ellenborough, L. Nelson, E.
Elliot of Harwood, B. Norfolk, D.
Elliott of Morpeth, L. Norrie, L.
Elton, L. Nugent of Guildford, L.
Ferrers, E. O'Brien of Lothbury, L.
Fortescue, E. Orkney, E.
Gainford, L. Orr-Ewing, L.
Gardner of Parkes, B. Oxfuird, V.
Glenarthur, L. Pender, L.
Goold, L. Pennock, L.
Grantchester, L. Penrhyn, L.
Gray of Contin, L. Plummer of St. Marylebone, L.
Greenway, L.
Porritt, L. Swansea, L.
Pym, L. Swinfen, L.
Rankeillour, L. Swinton, E.
Renton, L. Terrington, L.
Renwick, L. Teviot, L.
Rippon of Hexham, L. Thomas of Gwydir, L.
Rodney, L. Thomas of Swynnerton, L.
Romney, E. Thorneycroft, L.
St. Davids, V. Trafford, L.
St. Germans, E. Trefgarne, L.
St. John of Fawsley, L. Trumpington, B.
Saint Levan, L. Vaux of Harrowden, L.
Saint Oswald, L. Windlesham, L.
Savile, L. Wolfson, L.
Seebohm, L. Wyatt of Weeford, L.
Skelmersdale, L. Wynford, L.
Somers, L. Young, B.
Strange, B. Young of Graffham, L.
Sudeley, L.

Resolved in the negative, and amendment disagreed to accordingly.